November 21, 2011 Staff Report on Weekly Meetings: Week of November 14, 2011
Wednesday, November 16 was the last interim day for 2011. While it is nice that the 2011 interims are finished, it means the 2012 legislature will soon be upon us! ULCT attended several committee hearings to track key legislation.
The Governmental Operations Interim Committee reviewed the local government referendum process, the Utah Procurement Code, and the use of municipal and county transfers of development rights.
In the 2011 session, the legislature enhanced the requirements for putting a local government referendum on the ballot regarding a “local obligation law” (issuance a bond, note, lease, finance agreement, etc.). The 2011 changes now require a person seeking to submit a local obligation law (or a “land use law”) to meet the following threshold: in a city of the first or second class, 20% of all votes cast in the city for president in the most recent presidential election; and in a city of a third, fourth, or fifth class or a town, then 35% of all the votes cast in the city/town in the most recent presidential election.
Senator Jenkins, however, opined that the higher threshold has made it excessively difficult for residents to use the referendum process on local obligation laws and instead has forced residents to sue the city. He cited the debate in North Ogden over the general obligation bond as an example. He is working on legislation to revert a “local obligation law” back to the lower standard threshold for referendums, ranging from 10% of all votes in the city in the last presidential election if the total number of votes exceeds 25,000 to 30% of all votes in the town in the last presidential election if the total number of votes does not exceed 250. (See Utah Code §20A-7-601(1) Senator Jenkins is also working on legislation to extend the number of days that citizens have to collect signatures to put a local government referendum on the ballot. Finally, Senator Jenkins’ legislation will also address the definitions of “binding” after a controversy regarding some attempted ballot petitions in Kaysville that were invalidated because of binding discrepancies. The committee bill passed unanimously.
Next, an outside consulting group (HayGroup) presented the results of a state compensation study that the Bangerter commission recommended in order to compare private industry in Utah to the public sector and surrounding states. The report determined that the average age of state workers is 44 which is much higher than the private sector. Total state compensation is generally lower than the private sector (on average 10.5%), and the consulting group recommended that the state increase the compensation before the legislature adopts a “pay-for-performance” model. For a “pay-for-performance” model, the consultants warned that it is difficult to develop a good performance evaluation program.
Senator Niederhauser then approached the committee with two bills. First, he will run a nearly 300 page bill revising the Utah Procurement Code. He warned that while the 2011 bill only focuses on the state process, he expected municipalities to review their own policies and he would later address municipal procurement.
Second, Senator Niederhauser and an Audit Supervisor from the Office of the Legislative Auditor General examined a state audit of transfers of development rights. The audit revealed several issues that must be addressed in statute, including the need for a local ordinance, public process, and transparency of where the density credits originated and to where they were transferred. Senator Niederhauser emphasized that he was working with ULCT and other stakeholders, and that he didn’t want to bind local governments into doing TDRs in one specific way. He does, however, want to ensure that the TDR process is open, defined, and transparent. The TDR legislation was not distributed to the interim committee but it will be ready for the 2012 session.
Judiciary Interim Committee:
The upcoming sweepstakes bill should resolve problems created by a previous bill that may have inadvertently legalized gambling. Cyber cafes claiming that they operate as a legal sweepstakes (comparable to the McDonald’s “Monopoly” promotion) have sprouted in many Utah cities so ULCT and many city attorneys’ offices have cooperated in drafting legislation to eliminate the perceived loophole and halt the spread of cyber cafes. The legislature agreed to resolve the problem and passed the ULCT-supported bill unanimously.
Public Services Interim Committee:
Spencer Jenkins from ARGC gave a quick report on what they are doing and what they have done with mapping in the state. The Broadband side was the more important one for cities. They have provided a map of 48 providers and the broadband they are providing throughout the state.
Revenue and Taxation:
The big story of Rev and Tax is what did not happen there. The two issues of most concern to our cities were either removed from the agenda or the committee chose not to address it. First, the on-line travel taxation issue was removed from the agenda shortly before the meeting. Sen. Bramble stated this action was taken because of new information that he had received regarding on-line travel companies’ reporting of taxes. He indicated that these matters needed to be clarified before he would proceed with any legislation. The second issue was a discussion of the sales tax distribution formula. Although not originally included, the agenda was later modified to include a discussion of this item. However, given the length of the meeting, ultimately the committee chose not to deal with the issue. Lastly, the committee did approve legislation that would grant a $25,000 business personal property tax exemption (the current exemption is $3800). The legislation would not result in revenue loss to taxing entities but would result in a tax shift from business personal property to all real property (approximately $7 on a $200,000 home). This legislation will be the subject of considerable discussion during the session.
Salt Lake Valley Conference of Mayors:
ULCT joined the “big dogs” of COM on Thursday at the West Valley City/Taylorsville Animal Shelter. Governor Herbert addressed COM about the growing economy, praised the enthusiasm and enterprise of Utahns, and said that Utah’s economy and quality of life is the envy of fellow states. Sandy Mayor Tom Dolan and Governor Herbert discussed current legislative attempts to change the sales tax distribution formula and the Governor expressed interest to discussing how to improve the efficiency of the municipal tax structure with mayors, ULCT, UAC, and other parties. After the governor departed, the mayors raised concerns with the UDOT administration of federal grants to cities and ULCT will follow up with UDOT. Finally, the mayors discussed the vision of wall-to-wall services and governance for all Salt Lake County residents.
Billboards Task Force:
The Billboards Task Force convened in the Senate Caucus Room during interims on Wednesday under the watchful supervision of Senators Urquhart and Stevenson. In an unusual turn of events, municipal representatives were actually outnumbered by industry representatives (by quite a margin). Not to be overshadowed, the Home Team presented its perspective on conversion of billboards from traditional media to electronic media. Stunned by our pragmatic approach, and unable to unleash epithets about our outrageous behavior, the outdoor advertising industry countered with a self-deprecating request to repeal certain reciprocity provisions with on premises advertising that the industry had lobbied for last year. No contest from the Home Team.
The industry also raised what appears to be a readily resolvable concern about cities that have adopted a practice to directly compete with the Outdoor Advertising industry by opening inexpensive, public forum banner space for off premises commercial advertising. Finally, the industry (well, Reagan Outdoor Advertising) appeared to suggest that it would like to use the process developed in the Ombudsman’s office to resolve valuation issues in cases of eminent domain. The devil is in the details. However, we have had generally favorable results with the Ombudsman process in the past and are open to discussing ways for all parties to reduce transaction costs (i.e. litigation costs) in determining the value of a particular billboard.
The only true confrontation came from a single member of the Outdoor Advertising industry who expressed hesitancy to accept a win-win solution before the session has even begun. As such, the meeting concluded with an additional wish list of legislation directed squarely at a single dispute that is currently in litigation with Salt Lake City. With any luck, this dispute can be resolved on its merits, away from the legislative process.