Archive for the ‘City Council - Budget’ Category

Loveland City Manager’s Land Speculation Deal; Safety Hazard For Residents

Sunday, June 6th, 2010

Last month a father and son died during a house fire on Boxelder Drive in Loveland. While some residents began calling 911 between 11:10 to 11:15 pm, the emergency response team wasn’t dispatched until 11:27 and nobody arrived on scene until 6 minutes later at 11:33 pm. It was too late.

The fire on Boxelder Drive has reignited a debate within Loveland’s city hall as to whether the city’s 5 minute emergency response requirement anywhere in the city is feasible given the dramatic growth Loveland has experienced during the past decade and the failure of the former city council to properly invest in the fire services commensurate with that growth in population. While the Boxelder fire was only 3 minutes from a fire station, the “Incident Investigation Report” failed to flag it as a concern.

City Manager Don Williams has long been an advocate of lowering resident expectations for emergency services by promoting the removal of the 5 minute rule, advocating greater spacing between fire stations and by postponing building another fire station in Centerra. The Boxelder fire is a reminder that such actions can cost lives in an emergency (crews cannot cover larger areas without reducing their response time to residences closer to their station at the same time).

In November of 2007, Williams talked a lame duck council into spending $6 million on land speculation to buy 97 acres along the I-25 next to Johnstown while paying for half of it with funds he took from the money collected through Fire CEF’s (Capital Expansion Fees) to help our fire services keep pace with population growth.

In one breath Williams says no money is available for new stations or equipment replacement (June 2009) while in the other he supports a council waiver of McWhinney’s obligation to pay CEF’s.

Investing nearly $3 million in Fire CEF’s into property along I-25 near Johnstown was a terrible mistake as the property has plummeted in value and the city’s emergency services capital expansion money is stranded in the bad investment. Whether that money can be recouped as commercial land values recover still remains to be seen.

In the meantime, the tragic deaths of two residents from smoke inhalation should not be ignored and residents need to respond. Local government’s primary function is to protect the Health, Welfare and Safety of its citizens. Until Loveland’s Fire Department can promise every resident a response within 5 minutes to a house fire, the CEF’s were collected in vein and Lovelanders’ quality of life has suffered.

The city council needs to replace the $3 million stranded in the failed property speculation (97 acres near Johnstown) plus the funds which McWhinney didn’t pay due to their special tax holiday waiver last year.

Read our story about the fire and diversion of critical resources needed to expand the fire services.

Posted in City Council - Budget, City Council - General Issues, City Manager, Fire Chief Resignation, Uncategorized | 7 Comments »

Investing Loveland City Reserves In Brazil?

Wednesday, April 14th, 2010

On April 6, Loveland’s Executive Financial Adviser Alan Krcmarik told the city council that something the city needs to take a look at is investing in German and Brazilian government bonds. see story

Cities typically invest in U.S. Treasury Bonds as they have a AAA rating and represent the safest (although historically lower returns) than corporate bonds or other types of investments which cities also buy. However, recent news that the U.S. Government may lose that AAA rating has sent an alert to fund managers of municipalities and state governments whose investment policies require they keep some percentage of the portfolio in AAA bonds.

Unlike private investing, local governments cannot accept much risk to principle in exchange for higher returns. Local and state governments investment goals are quite modest when compared to individual investors and private entities but current economic forecasts may change the notion of what constitutes a risk. Krcmarik, who served previously as the city’s Finance Director, is concerned both about the potential for the U.S. Treasury rating to drop and the specter of future inflation that could substantially erode the value of city reserves if they are invested in low-yielding long-term bonds.

The excerpt from Bloomberg below describes what Krcmarik was alluding to when addressing the city council last week;

While Treasuries backed by the full faith and credit of the government typically yield less than corporate debt, the relationship has flipped as Moody’s Investors Service predicts the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K. America will use about 7 percent of taxes for debt payments in 2010 and almost 11 percent in 2013, moving “substantially” closer to losing its AAA rating, Moody’s said last week.

Whether Loveland’s Citizen Finance Advisory Committee (CFAC) will be consulted on any future decisions regarding a change in Loveland’s portfolio to include foreign debt remains to be seen. It is an odd circumstance in this country when municipalities don’t trust the backing of the U.S. Treasury as the safest place to invest public funds. When both the value of the dollar and credit worthiness of the U.S. Government are in potential jeopardy looking overseas may seem like a prudent step.

If you were advising the City of Loveland would you suggest placing some of the $191 million (mostly restricted) city reserves into German or Brazilian government bonds instead of U.S. Treasuries?

Any thoughts?

Posted in City Budget, City Council - Budget, City Council - General Issues | 12 Comments »

Klassen’s 2010 Agenda – Muzzle Taxpayer’s & Raise Taxes

Sunday, January 10th, 2010

Memory can fade at 75 years of age but we don’t believe Councilman Daryle Klassen’s recent assault on city taxpayers in contradiction to his campaign rhetoric was due to any memory loss.

Four of the five agenda items he submitted for the city council’s annual retreat (scheduled for Jan. 15 & 16) involve either raising taxes on Loveland residents or muzzling their voices. Read the story

His first goal for 2010, taxing internet purchases on residents in Loveland also received support from newly elected Councilman Hugh McKean at first who has already earned the reputation of appearing to enjoy the sound of his own voice. Unable to make a coherent statement either for or against the proposal but unwilling to be silent, McKean announced he was in favor but also half against the internet sales tax idea during a December council meeting.

Only Councilman Kent Solt stated he was not in favor of the new tax proposal during the meeting.

Klassen’s agenda items eerily reflects the McWhinneycrat agenda for a stripmall developing retailer driven Loveland government and mimick the anti-resident rhetoric emanating from Loveland’s coin operated Chamber of Commerce. This is the same Chamber of Commerce that claims to be privately funded while operating out of a building erected from taxpayer subsidies and whose manicured lawns are maintained by Loveland taxpayers under the farce the chamber grounds are a “public park.”

Here are four of Klassen’s five contributions for Loveland in 2010;

1. Create a sales tax on internet purchases by any resident of Loveland
2. Restrict public comments at study sessions while allowing only special interests to speak
3. Shift property tax burdens from commercial to residential property owners
4. Direct staff to ignore “complainers” when they feel the issue was already decided (does that need council direction?)

Klassen, a self-described “conservative Republican,” has not proposed any budget cuts, tax cuts for residents, relaxing any regulation on business or greater access or transparency for citizens to the governmental process. In a nutshell, Klassen’s retreat agenda is the antithesis of everything he campaigned on and demonstrates a genuine mistrust not for government but instead his constituents.

Klassen’s December 12, 2009 email to his colleagues is the “let them eat cake” revelation of just how out of touch some local Republicans can become after being elected.

We believe the current McWhinneycrat candidate for Ward 1, Donna Rice (aka Donna McCrea), represents the same dishonest bait and switch back room political tactics of riding on a Republican label while only representing a narrow special interest. These insincere candidates terribly degrade the public’s trust in their elected officials and contribute to the apathy that allows them to get away with such brazen acts of voter betrayal.

What is your opinion?

Posted in City Budget, City Council - Budget | 15 Comments »

VNet Failure Reveals Poor Governance By Council

Monday, September 28th, 2009

It is ironic to hear local candidates assail national politicians for lack of accountability while they themselves have explaining to do. All but one incumbent councilman now running for Mayor foolishly voted down a proposal to allow the subsidy to vNet but require the company or its owner to return ALL the funds if they failed to meet their obligations under the agreement.

In retrospect, the vote was a foolish partisan move to not support Councilman Kent Solt and instead follow the flawed advice of Loveland City Manager Don Williams. Read the LovelandPolitics.com story. For the record, LovelandPolitics does not support corporate welfare especially when it goes to friends and contributors of members of the council. Being “pro-business” should mean removing government barriers to free enterprise and creating the best value for government services instead of choosing winners and losers by gifting tax dollars to private entities.

Like so many other issues that come before Loveland’s City Council, the $900,000 subsidy approved for vNet was a done deal and the public meeting a charade. The seven McWhinneycrats on Loveland’s council did in early March of 2008 what they have become accustomed to doing so often on other issues – not fully read their packet of information before the meeting but instead follow the city manager’s advice.

Unprepared for a debate on the merits of a proposal they appeared not to fully understand the council made a terrible error. The seven McWhinneycrats (Pielin, Klassen, Johnson, Skowron, Rousey, Heckle and Clark) voted for who they knew instead of WHAT they knew.

Despite warnings by Councilman Kent Solt that vNet CEO and majority owner, William Beierwaltes, failed previously and didn’t have the history of unprecedented success being represented to council – they voted down Solt’s amendment to make Beierwaltes and his company accountable to the full amount of the subsidy instead of just part of it. Solt’s independent research was ignored in favor of city staff advice.

This time their inability to understand what they were voting against and act in the city’s best interest may cost taxpayers $500,000. At a time when employees are being let go, parks closed early and routine maintenance to city facilities deferred for lack of funds this ineptitude is unpardonable.

Caution must be taken when candidates like Bob Snyder, now looking to fill a seat on the council, represent themselves as “pro-business” yet appear to understand little or nothing about the actual incentives the city has handed out. What Loveland needs are people willing to be good custodians of taxpayer dollars that show an interest in the details of what they vote on instead of blindly following Don Williams.

The difference we see in the 7-2 vote on this matter was not one of philosophy but instead sophistication. Walt Skowron, often a detractor himself from the majority, made it clear he was voting to give the city subsidy to a friend which should have been a red flag. The only other possible explanation for the others not making vNet fully accountable is they met in advance with Beierwaltes and had already agreed to vote for the subsidy as proposed by staff.

Loveland’s City Council wants to act like venture capitalists with other people’s money but are unwilling to perform the necessary due diligence before investing. City Manager Don Williams lacks even the minimum educational qualifications to be a city manager in any other city in Colorado let alone be an investment adviser. We know this website has been attacked for being too rough on locally elected officials. Sometimes it appears we were not rough enough in describing their absolute negligence that has lead to this debacle and potential loss of half a million dollars of Loveland taxpayer’s money to a failed business venture.

Can anyone explain what their possible defense might be for such a costly blunder as the campaign goes on?

Posted in 2009 Elections, City Council - Budget, City Council - General Issues | 49 Comments »

Council Approves CEF’s (Capital Expansion Fees) Waiver

Wednesday, July 22nd, 2009

The Loveland City Council voted 6-2 to approve a modified CEF reduction of 61% on police, fire, park, open space, library and general government services to accommodate a McWhinney request.

Developers in Loveland have paid CEF’s to the city for over 25 years but McWhinney’s decision to build an apartment complex was used as the catalyst to put these fees on trial as excessive or unnecessary but just long enough for McWhinney to get permits for their apartment complex and reapply the same fees again for future developments.

As a result of public input and discussion by the council the proposal was modified to increase the scope by including duplexes and increasing the time the waiver will be generally available to all developers. Mayor Pro Tem Clark pointed to the fact no other developer would be likely capable of building within the next 5 months but expanding it another year means others can realistically take advantage of the waiver.

McWhinney advocates on council tried to sell the waiver for McWhinney’s development as a “stimulus” for building in the community (a popular concept) even though the very narrow time window proposed meant only McWhinney’s currently proposed 303 unit apartment building development would likely qualify. The council directed changes that were passed certainly expanded the benefit beyond only McWhinney but also created more questions about its impact on city services.

Councilman Walt Skowron, who is now running for Mayor, asked City Manager Don Williams what impact the waiver will have on Loveland’s 10 year capital improvements plan. Williams responded it would certainly impact it but couldn’t provide details until the issue is studied.

The law requires the city to provide a “rational nexus” between the fees charged for new development and the one-time costs to the city for expanding services to accommodate the growth in population. Loveland, as required by law, maintains the monies collected for CEF’s in separate accounts dedicated exclusively for the capital costs of expanding those services for which the money was collected.

While the city staff is going to prepare a review of the fees for council later this year, McWhinney claimed they needed the fees reduced immediately as they are submitting a letter of intent on their project to HUD (Housing and Urban Development) to obtain government subsidized loan guarantees to finance their project. McWhinney also induced their now routine threat that if they had to pay the normal taxes the project could not go forward.

The Mayor at first attempted to skip any public comment after McWhinney was allowed to address the council for 30 minutes in a give and take of questions and answers. He finally acquiesced and allowed public comment after it was pointed out to him that McWhinney is not the applicant and legally should have no extra-ordinary rights than any other residents impacted to address the council.

Posted in City Council - Budget, City Council - General Issues, McWhinney | 4 Comments »

Downtown Takes First Hit / Lodging Tax Likely To Be On Ballot

Wednesday, June 24th, 2009

Loveland’s city staff was looking for direction Tuesday night (June 23, 2009) at the council study session. The staff presented a list of projects from the Capital Program which is funded by CEF’s (Capital Expansion Fees), Council Reserve, General Funds and other sources.

Funded capital improvement projects create a problem as the flat general fund cannot absorb the additional annual expenses a finished project will create without cutting the budget somewhere else. The staff also presented a list of planned capital improvement projects totaling $45 million that are not yet funded.

Here is what the staff presented;

It is also important to note that as the Transportation Program adds lane miles to the City’s street system, over time the Street Rehabilitation Program will need increased resources to maintain these additions if we are to maintain service levels at current standards.

Based on the revenue projections in the Financial Plan that reflect a flattening revenue stream over the ten-year period, there will be difficult decisions to make in the General Fund. Limited resources will require setting priorities for adding new services, adding new facilities and maintaining current service levels.

The reality that the city may be unable to support the infrastructure it needs to keep pace with growth already built created a somber mood. The only part of the capital program that was identified for future delays or cancellation are the improvements scheduled for the downtown area. This is awkward since Carol Johnson and other McWhinney cheerleaders on council have always sought support from downtown merchants claiming the city’s commitment to McWhinney could only help downtown. Now the cost of providing services is rising while tax revenue it not.

The downtown parking garage, the pedestrian path where Mr. Neat’s was once located along with other general improvements are now in jeopardy for lack of funding. Among the items draining current revenue is “repayment of the inter-fund loan for land purchase on State Highway 402.” That was money taken from the CEF’s (Capital Expansion Fees) to expand a current fire station and build another that City Manager Don Williams raided for land speculation on highway 402. The city now has the vacant land but no new or improved fire stations and an inter-fund debt that needs to be repaid with money that could have been used elsewhere.

Staff left frustrated at the lack of clear direction. It appeared council is not yet prepared to tell the community or staff exactly which capital programs will be indefinitely delayed in the coming years. It appears they prefer to leave the projects in the capital improvements schedule while knowing the money will not be to maintain them once they are built.

On another topic, the council concluded that a lodging tax should be placed on the ballot for November of this year. While they couldn’t agree on where the money from a lodging tax should be spent they agreed to work with public input to make that determination. The City of Loveland failed in 2000 and again in 2001 to get voter approval for the imposition of a lodging tax in Loveland.

Posted in City Council - Budget | 8 Comments »

Budget Projections Show A Train Wreck Coming

Friday, January 9th, 2009

The Loveland City Council off-site for today and tomorrow will consider the financial future of the city. The overall budget is being presented in three different scenarios; best, nominal and worst case.

Unfortunately, every scenario relies on revenue from Grand Station even though it wasn’t built which means every scenario contains long-term projections that are at the very least optimistic and hardly worst case. At the same time, the capital improvement budget fails to fund a fire station in East Loveland which will be required if Grand Station is really built someday. This is what some people call “having your cake and eating it too.”

Money available in the past two years for land speculation along the I-25, grease payments for annexation agreements to compete with Johnstown and other multi-million dollar unplanned spending have created a pinch in the finances of the city. City Manager Williams is telling council that if they want to support even the necessary utility improvements downtown they will need to raise property taxes across Loveland or cripple the Urban Renewal Authority with more debt. This should make for an interesting discussion.

What is conspicuously absent from the budget memos and discussion is the money borrowed from CEF’s (Capital Expansion Funds) for emergency fire protection and parks and recreation. Maybe this is because most residents would be shocked to learn that money was taken by council to fund the acquisition of speculative property ventures along I-25 from the CEF’s.

It appears that Williams intends to retire in 2009 as he has set the city on a collision course beginning in 2010. Deficit spending will range between $16 million to $50 million for the city by 2015 even if you believe growth in sales tax revenue will continue.

One solution being proposed by staff is the elimination of certain services for the residents of the community. Of course, limiting services to residents while increasing their taxes is a staff generated option. A meeting in late spring to identify those services the residents don’t need is being planned – stay tuned.

A number of the City Council members read this blog and would likely appreciate your thoughts on how to fix the city’s looming financial train wreck.

Posted in City Council - Budget | 8 Comments »

Aug. 5, 2008 Loveland City Council Meeting

Wednesday, August 6th, 2008

The Loveland City Council voted to waive the confidentiality requirements they imposed on themselves and members of the Open Lands Advisory Commission regarding two closed meeting held to discuss the possible acquisition of Staples Farm. The action was precipitated by requests from the commission members and councilors to discuss openly what was decided (or not) in private. City Manager Don Williams had informed the local press the City Council did not make any decision to buy Staples Farm. A number of commissioners and councilors felt this statement did not accurately reflect what was decided in the two private meetings and thus wanted permission to speak freely.

Four Council members also requested the “Golden Nest Egg” plan of employee health benefits for some employees be brought back to the council on August 19, 2008.

Assistant City Attorney Rene Wheeler committed a “crash and burn” in front of the City Council when they convened as the board of LURA (Loveland Renewal Authority). The Annual Report presented to council claimed the TIF (tax increment financing) was performing “as expected” despite poor performance. A number of councilors took issue with the conclusion and other comments throughout the report which they refused to endorse or accept. The report also contained a number of factual errors like which wards councilors represent and other factual or typographical errors.

Councilman Darryl Klassen deserves the kudos this week for standing-up for fiscal conservatism and not accepting inferior work or false conclusions by city staff. His tireless efforts to read AND UNDERSTAND what is before him is commendable.

Any comments by those who watched the meeting?

Posted in City Budget, City Council - Budget, City Council - General Issues | 9 Comments »