Why I Vote "No" on the Bond question

Carlton Bowen

AF City Council

No to higher taxes! 
No to more debt!

Vote NO on the Bond!

Hi.  My name is Carlton Bowen.  I'm a candidate for American Fork City Council.  We live in a great city, and I want to keep American Fork City great.  I believe the things the city should do, such as water, roads, police, fire, parks, etc., the city should do well, and I envision a city with good roads and well maintained facilities.  I also envision a city with low taxes and eventually no debt.

When I first filed to run for City Council, I didn't know there was a plan to borrow 20 million dollars more and to raise property taxes through a bond issue.  When I learned of the bond, I wondered how much the city already owed.  I discovered the city already owes over 56 million dollars!  This is a lot of debt for a city the size of American Fork.  If the bond is approved, that will add 20 million dollars more debt, a 35% increase in the debt burden on our tax payers. 

Next, I wondered if the bond included a tax increase.  I was saddened to discover there was indeed a property tax increase associated with the bond.  Our utility rates have already increased substantially, and I know that to many families in our city, $100 or more in additional property taxes per year is another significant increase.

• Our City is already 56 million in debt 
• Our utility rates have already sky rocketed
• Property taxes will go up too if the bond passes

I'm concerned by the direction our city is going.  More than half of our current city debt was accumulated in just the last few years, and 20 million more debt now is a lot.  The higher rates and fees, combined with potentially higher property taxes now, is a disturbing trend.  Massive debt and high taxes is the wrong direction for our city to go!

Those who support the bond want you to think the only way to fund our road needs is to raise taxes and borrow millions, but that is simply not true.  The reason many of our roads are in horrible shape is because the city budget has neglected roads year after year.  We only budget about 1 million dollars a year for 100+ miles of roads, out of a 52 million dollar a year budget!  That's extremely low, and I propose adjusting the budget to make road maintenance a higher priority. 

Some argue there is no room in the budget for any higher road funding, but that's a cop out.  The reason we have an annual budget process is to set city priorities.  Is there really no room in a 52 million dollar budget to target even a little bit more for roads?  Allocating just a few percent more of the budget to roads would cover all the proposed bond projects, in just a few years, without raising taxes, and without increasing the city debt on taxpayers. 

• More debt and higher taxes is the wrong direction for our city to go! 
• The city budget hasn't adequately funded roads. 
• Making roads a higher priority in the budget is the right solution!

That small budget adjustment would also address the road problem long term, something the current short term bond proposal doesn't do.  Many residents may not realize the proposed 20 million dollar bond covers less than 15% of the roads the city says need to be urgently repaired.  What is the plan for the other 65% of the roads that also need urgent attention?  Do Bond supporters plan to just keep borrowing even more and raising taxes even more, every few years?  That is not a realistic or sustainable solution.  Increasing the percent of the budget spent on roads, by just a few percent, is a realistic and sustainable solution.  Also, the budget solution addresses the problem both in the short term and in the long term. 

I will work to make road maintenance a higher budget priority, without raising taxes and without borrowing.  Higher taxes and massive debt borrowing is the wrong direction for our city to go!  We need to decide now that we want a fiscally strong city, not a city burdened with heavy debt.  We need to decide now that we want a low tax environment, not a city with high taxes.  I want to keep our city great, by being fiscally responsible. 

•   The bond proposal covers less than 15% of identified road needs 
•   Always relying on more debt and higher taxes isn't sustainable long term 
•   Making roads a higher budget priority is the right solution

I wanted you to know why I, like many other American Fork City residents, vote "no" on the bond.

Sincerely,

Carlton Bowen

American Fork City Council candidate

P.S.  Some want you to believe there is just no room anywhere in the budget for more money for roads. They want you to believe higher taxes and even more debt are the only options.  But the obvious way to fund road needs, both now and in the future, is the way voters expect roads to be paid for-- through the regular budget process.

Bond supporters argue it will cost more in the future for roads if we don't borrow a ton now.  But that assumes nothing other than the bond can be done to address our road needs, which isn't true.  We can address our road needs both now and in the future, by increasing the amount of the budget that goes to roads, by just a few percent of our 52 million dollar budget. 

•   I oppose higher taxes 
•   I oppose more debt
•   I support adequately funding our roads by reprioritizing  existing budget funds

How do we decide which roads to fix?

In the October 8, 2013 City Council meeting, I asked what process is used to determine which roads are fixed first. 

I then proposed the following outline for an objective process to determine which roads are fixed first.

1.  Consider how heavily traveled the road is.  The roads used by the most people should have some priority associated with them for maintenance.  Roads that service businesses should also be considered a priority, since we want to keep businesses in our city!

2.  Consider the current condition of the road.  Is it the worst road in the city, in fair shape, or just recently repaved?  We need to be careful about not wasting the money we have for roads.

3.  Consider when the road was last maintained.  Was it 30 years ago?  50 years ago?  We should maintain a list, with the date of last repairs, and what those repairs were, for every road segment in the city.  The city does use a program that lists every road segment in the city, but it currently doesn't contain historical information about the date of last repairs for those road segments.  It does list the current condition of those segments, based on analysis by university engineering students.

Then it's just a matter of making a prioritized list, and addressing the highest priorities first.  There should be a formula weighting the above 3 criteria, so that the most urgent needs are addressed first.  We may also want to take the oldest road segment (the one that hasn't been repaired longer than any other road), and address that road.  Doing that once a year, or even once a quarter, would get to some of the literally crumbling roads in some of our older subdivisions, that otherwise might never be addressed. 

By having a prioritized list of every road segment in the city, decisions can be objectively made about where to apply road funds as they become available in the budget.


Carlton Bowen
American Fork City Council candidate


Vote No on the Bond!

Below are the comments I made in today's American Fork City Bond Hearing as public input:

Why the Bond is a Bad Idea

Fellow Citizens, Mayor, City Council, Staff, "Only a dead fish goes with the flow."

Those who argue for the bond say we must continue borrowing, and continue raising taxes now, or raise taxes even more in the future.  I would like to point out that over the last five years, this city has borrowed 38 million of the 56 million currently owed, more than half, in a short period of time.  During this same period, utility rates have skyrocketed.  Now the city is seeking to borrow even more, 20 million dollars more, and increase taxes yet again.   Higher taxes and massive new borrowing is the wrong direction for our city to go and is not a viable solution.

No one disputes the need for road improvements.  The question is how road improvements will be paid for.  Those who argue for the bond want you to think the only answers are more debt and higher taxes.  But more debt and higher taxes are not the only answer!  There is another way, a harder way, but a better way.  It's called, living within our means. 

Let me give you an example of how this would work.  There was $500,000 dollars more in June of 2013 from Sales Tax revenue, than the city had originally planned on.  There was 2.7 million dollars more revenue than originally planned on, from our high utility fees.  American Fork City recently paid off the internet bond.  The money that had been spent on that, can now be spent on roads.  Combined, that's more than 4 million dollars, and that's without digging.  That's just looking at the surface.  That 4 million is 40% of the 10 million the city wants to borrow next year. 

I would like to point out that no matter what the interest rate is, money borrowed via a bond will not be paid back for 20 years.  That's a long time.  And even with low interest rates, there is still interest due, in this case more than a million dollars (corrected to $400,000) a year in interest.  We can save that money by simply not borrowing, living within our means, and using our existing means to fund our priorities.

What  will our city do, if a true emergency comes up in the future?  Having already maxed out our card, so to speak?  The city will be in an even more difficult position, being highly leveraged with debt.  This bond pays for less than 15% of the urgent road needs identified.  Does the city plan to borrow a bunch more two years down the road, and raise taxes again?  This is the wrong direction for our city to go. 

Some arguing for the bond will say that it will cost more on down the road, if we don't borrow now.  But that assumes that we are not addressing the road issue now, and that's not what I'm advocating.  I'm saying, we can address our road needs now, without massive new borrowing, and without higher taxes.  I know it's not as easy to live within our means.  It's much easier to just whip out the credit card.  But anyone who has done that knows that it hurts later on, when the bill, including extra money for interest, has to be paid. 

I urge this community to not saddle our future generations with our bad spending habits now.  We can effectively address this current need now, with our existing means.  It is not the easy solution, but it is the right solution.   It's the best solution to help keep our great city great. 

We cannot continue this devastating path of borrow borrow borrow, tax tax tax.  It will ruin our city.  Higher taxes and more debt are not the solution, and is the wrong direction for our city to go.  Being fiscally responsible, living within our means and keeping taxes low is the right direction.  I, like many, vote No on the bond.

I became overly defensive in the August 15, 2013 American Fork City Council session, when some of my facts were challenged by some City Council members, and even mocked by one member.  While I stand by my facts, which have since been proven sound, and by my policy position against higher taxes and more public debt, I did feel badly about the contentious atmosphere of the meeting.  I thought about what went wrong and about what I could have done better.  I therefore made the following apology as public input during the August 27, 2013 American Fork City Council meeting:

"City Council members, Mayor, citizens of our great city and state, I believe in treating all people fairly and with respect.  While I was taken aback in the last city council session, where the bond proposal was being considered, when some members of the City Council challenged my assertion that the city was deeply in debt and had a tax surplus, clearly the City Council didn't realize that I was referring to the June 2013 Fiscal Year End Budget Amendment, where the size of the budget was increased from 45 million to 53 million dollars. This budget amendment lists additional revenue sources for the amount of the budget increase, totaling 7.6 million dollars, and this is what I was referring to as a "tax surplus".

I want to apologize though to the City Council, Mayor, and to any in the public and staff, who may have been offended by the contentious atmosphere of the last City Council session. While we may disagree from time to time on the best path forward for the city, I recognize that as individuals each one of you care deeply about what is best for our city, as do I. I recognize that as a council body you have put much consideration and effort into trying to do what is best for our city. I think we can all agree that there is a serious need for road and capital improvements, even if we may disagree on the best way to fund that need. I want the City Council members, Mayor, the public and staff to know that whatever the disagreement on policy, we can and should interact with dignity, respect and decorum towards one another. I didn't do a very good job with that last City Council meeting, and I apologize to you for that."

Sincerely,


Carlton Bowen

Thanks to everyone who took the time and effort to attend last night's City Council meeting regarding the Bond Issue!  A special thank you also to those brave souls who were willing to speak out publicly on this issue!!!

Below are my comments delivered during the public input portion of the meeting:

"Citizens, Mayor, City Council, my name is Carlton Bowen and I am a resident of American Fork City.  I rise today to speak in opposition to the proposed resolution.  This resolution seeks to significantly increase city debt and increases property taxes.  According to the June 2013 budget, our city is already 54 million dollars in debt, a significant amount of debt for a city our size.  This resolution seeks to add 20 million dollars more debt, a massive 40% increase in the debt burden on American Fork City taxpayers.  American Fork City property taxes are already some of the highest in our area, according to analysis of 10 surrounding cities done by the Daily Herald newspaper.  American Fork City residents, businesses, and taxpayers don't expect the City Council to significantly increase the cities debt burden and raise taxes.  We expect the city to live within its means.  And the city does have means.  In June of 2013, less than two months ago, the city had an unexpected tax surplus of 7.5 million dollars.  If roads are truly a priority to the city, this money could have been allocated to pay for the roads.  This surplus would have paid for 75% of the first 10 million dollars the city wants to borrow next year, without raising taxes, and without more debt!  I want to keep American Fork City great through fiscal responsibility.  I urge the City Council to abandon and vote against this resolution, which adds massive new debt and raises property taxes.  Thank you."

Several others spoke also; all spoke in opposition to the bond except for one.

Unfortunately, the City Council still voted to proceed with the massive additional borrowing and property tax increase.

Mayor Hadfield confirmed near the end of the meeting that the city did owe not just 54 million dollars, but actually just over 56 million dollars!

There was also a question about the tax revenue surplus.  I thought the City Council was aware of this since the amended budget dealing with this was passed so recently, but there was some confusion among Council on this issue.  The actual tax surplus according to the June 2013 amended budget is 7.6 million, but it wasn't all "sales" tax surplus.  The tax surplus was from several different city "revenue" funds, including a $500,000 surplus from sales tax.  The combined surplus from the various revenue funds totaled 7.6 million dollars.  My source for this is a document that I had to request from the city, because they didn't have it up on their web site.  The document title is "2013-06-10R City Budget Adjustments for 2012-2013.pdf".  Refer to page 6, under the "Revenues" section, which lists line by line where the additional revenues came from.  Note specifically the total of "45,497,800" for the column "approved budget 6/30/2012", and then compare that to the total of "53,122,700" for the column "Amended Budget 6/30/2013".  Remember, this is the revenue section, i.e. the money coming into the city.  The difference between the original approved budget's revenue and the amended budgets revenue is "7,624,900".  This is the additional budget revenue, or "tax surplus", that I'm talking about!

**Tax Surplus source:  "2013-06-10R City Budget Adjustments for 2012-2013.pdf", page 6, Revenues.**


By the way, one question I had meant to ask during the meeting but didn't was "what will the fees be for underwriting the bond?"  I was able to ask the "bonding agent" that question though, after the meeting.  (He didn't like me asking... part of that fee is probably his paycheck!)  I did get an answer, sort of.  The bonding agent said the fee is typically $2 to $8 per $1000 borrowed.  So let's see, on a 20 million dollar bond... 20 million divided by 1000 equals 20,000, times $2 at the low end equals $40,000, or times $8 at the high end equals $160,000.  Wow!  The city will have to pay bonding fees of 40K to 160k to borrow this money!   (That's on top of the 1 million in yearly interest!)

Dear fellow concerned citizen of American Fork City, 

Tonight (August 15, 2015) at 7:30 p.m. in a special session of the City Council, the city intends to increase our debt by 40% and our taxes by 7%.  There will be a public comment period at this meeting.  Will you join me in attending this meeting in the historic American Fork City Hall building (31 N. Church Street) and in speaking out to let our City Council and Mayor know that the citizens are opposed to this massive new borrowing and tax increase?  

What you can expect:

Expect the city to sugar coat this massive new borrowing and tax increase.  DON'T BE FOOLED!  

• The city will point out the roads that will be repaired and how much the repairs are needed. 
• The city will say it will take too long to repair the roads without massive borrowing.
• The city will say interest rates are low so now is a good time to borrow.
• The city will say there has been inflation so we need to raise taxes.
• The city will say the dollar amount of the tax increase isn't that much per citizen, so it's ok.
• The city may say other things that they think will fool you into supporting them on raising your  taxes and increasing the cities already high debt load by 40% more!

What you need to know:

• The city is already 54 million dollars in debt.  This is a very high debt burden for a city the size of American Fork City.
• The new borrowing of 20 million is a 40% increase in the cities debt load!
• The new borrowing comes with a property tax increase of 7%.
• Property values are near record lows, so as property values are assessed higher and higher in the future, the cities proposed tax rate hike will automatically cost us taxpayers even more and more in the dollar amount.
• The new borrowing will cost over 1 million dollars per year, just for interest.
• The city (us, the taxpayers) will owe this money for 20 years.
• The roads will be worn out and need to be repaired again long before we've paid off the debt.
• This is an Obama style increase in our debt - massive borrowing in a short period of time, with the current politicians spending all the money and future generations straddled with the debt burden for decades.
• Perhaps most crazy of all, the city had a 7.5 million dollar tax surplus (unexpected additional revenue) in June 2013, just two months ago!  That money, if spent on roads, would have covered 75% of the first 10 million they want to borrow in 2014! 
• The city currently sets aside money for road and capital improvement projects, AND COMPLETES THESE PROJECTS WITHOUT BORROWING!

There are better solutions:

1.  Use the money that would be spent on principle and interest to pay back the debt and instead increase the road and capital improvement funds (Pay as you go with the money you would have spent paying debt.)  

2.  Use unexpected tax surpluses, such as the recent 7.5 million dollars in June (which the city has now already blown) to fund road and capital improvement projects.

3.  Re-prioritize existing spending, if necessary, to increase the road and capital improvement fund.

The bottom line is, the city needs to live within it's means.  Our city is already straddled with significant debt, and massive new borrowing only makes it harder for our city to remain fiscally stable.  We can keep American Fork City a great place to live, but only if we require our public servants to be wise and frugal with our resources, including surplus resources, they already have available.  If enough people show up tonight and voice their dissent over proposed higher taxes and borrowing, perhaps we can stop this now, before it goes on the ballot in November. 

I urge you to join me tonight at the City Council meeting to send a strong message to our elected officials about fiscal restraint and responsibility.  

Sincerely, 

Carlton Bowen

801.770.3154

P.S.  Remember, the meeting is tonight, August 15, 2013, at 7:30 p.m. (be early), at 31 N. Church Street (just down the street from the AF City offices) in downtown American Fork City.

P.S.S.  Feel free to let other concerned citizens know about this meeting.

        Say NO to higher taxes and massive new borrowing.  Vote NO to the Bond issue!

Thanks to everyone who helped me make it through the primary!  Now on to the general election!!!

With your help, I received the 2nd highest number of votes, in unofficial results. (http://afcity.org/Portals/0/Unofficial%202013%20Primary%20Election%20Results.pdf).  There are two open City Council seats, so the top four candidates advance.

Let's continue to get the message out that the city is already 54 million dollars in debt and doesn't need to add 20 million more!

Vote NO on the bond issue in November.  No to higher property taxes.  No to massive new debt!