ISSUE # 42 .... Ever VigilANT in Aspen

"One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors."       --- Plato

 

CITY HALL: A TARGET-RICH ENVIRONMENT

The Red Ant endeavors to bring you several future issues that cover critical, high-profile and often spendy projects and programs that affect our lives in Aspen.  The research and interviews are well underway.  But Aspen's city hall has an uncanny knack for interrupting these efforts with discussions and decisions that are often not to be believed, and as such, warrant coverage in interim issues.  These guys put the "fun" in dysfunctional!

CONSTRUCTION IN ASPEN: MAKE IT DIFFICULT AT ALL COSTS?

Nearly one year ago, The Red Ant learned of a unique building permit promotion that the City of Denver had successfully enacted.  In short, between June 1 and July 15, 2009, the city offered free building permits (valid for 180 days) that were issued on the spot to citizens or their contractors.  Mayor John Hickenlooper stated the objective of the promotion as "an effort to stimulate the local economy by offering an incentive for residents to make improvements to their property."  Common improvements to single-family homes and duplexes included basic interior remodels, basement remodels, roof repairs/replacements, central heating/A-C installation, solar panels and stucco/siding.

The results were impressive.  Denver pulled 1,234 free building permits for $6.2 million worth of construction during the 7-week promotion.  This was a savings to citizens of $85,000 in permit fees.  The average daily volume for qualifying permits increased 3-fold. 

I immediately presented this information to council during the public comment period.  Surely it would have been a signal of good faith from city leadership, not to mention a boon to local plumbers, carpenters, dry-wallers, electricians and roofers, for Aspen to jump on a similar free permit bandwagon to kick-start some construction activity and keep people working.  Council immediately waived it off to "staff" for evaluation .... And it went away.  Maybe it was the messenger.  But maybe they just don't care.  You can just imagine the glazed eyes at the council table!  Support construction?  These guys? Are you kidding?

The Red Ant certainly laments the missed opportunity of imitating such a potentially economically beneficial idea, but never as much as upon learning last week that city council has passed tougher rules and regulations for construction in Aspen.  Apparently noise from "on-site manufacturing" (such as stone-cutting) recently upset the residents of an affordable housing complex (where Mayor Mick lives, incidentally).  Now, such "on-site manufacturing" must be done with a special permit and decibel monitoring.  More layers, more controls.

In its ongoing efforts to continually thwart building and development, and in doing so, drive away construction jobs, city council has clearly lost all sight of the important economic contributions of the construction industry to this town. 

SUBSIDIZED TRASH CANS?

Where does it end?  Aspen subsidizes housing, transportation, recreation... and now trash cans?  When council approved an ordinance in March that requires residents to buy bear-proof trash cans by June 1, they asked the Aspen Police Department to come up with ways for the city to help defray the costs of the purchase.  Last week, the APD came back to council with the message that the government should stay out of the trash can business.  (Ya think?) The police found that most residents are already on board with the new law and felt that rewarding trash can hold-outs is not the way to achieve full compliance.  As you can imagine, Mayor Mick lost it.  Without being in a position to give select people free stuff, how will he effectively maintain his punish/reward governance reputation?!

Now, the trash can scholarship decisions rest with city manager Steve Barwick.  He will determine which trash can scofflaws get taxpayer-funded handouts. It seems that councilman Torre hopes to provide trash cans to several "long time locals" who've contacted him with their complaints. Ridiculous, of course, but at least now we will learn that elusive answer to "what makes a local?"  (See Issue # 35, "The L Word.")  Council has long differentiated "locals" from others, and now The Red Ant is beginning to recognize that being a "local" in council's eyes means that the rules are different for you!

Free "trash" from Mick is nothing new, but the steps the guy will take to tilt the playing field and perpetuate class warfare in Aspen never ceases to amaze The Red Ant.  And, given it's been shown that the city knows how each of you voted in the May 5, 2009, municipal election (and likely most elections prior to that too), The Red Ant bets Mick will reward his ardent supporters..... with trash cans.  You can't make this stuff up!

FYI - if you don't have your bear-proof trash can yet, call ACE Hardware at 925-3031.  They offer 3 sizes:  95 gal ($260), 64 gal ($230) and 32 gal ($180), and are taking orders now.  Plus, ACE delivers.

ELECTRIFYING.  OR NOT.

A mere 4 weeks after citing increased electrical bills as one of the key reasons for commercial rent increases in Aspen (see Issue # 40 "VacANT"), The Red Ant is pleased to report that the city will now "assess" whether their tiered electrical rate structure, based on consumption (biggest users pay the highest rates), is working as envisioned and/or if there are any "unintended consequences."  The bad (but not surprising) news is that the city has re-hired the same outside consultant who originally recommended the program to evaluate it now.  (Hmmm... sounds just like city clerk Kathryn Koch auditing her own election!) 

Reporting to city public works director Phil Overeynder, the Phoenix-based consultant, who was paid $43,270 in 2008-09 to design the plan, will now evaluate it in two phases ... at the cost of $16,120 to start and another $17,390 later.  This is how the city puts your tax dollars to work. 

B.Y.A. (BECAUSE YOU ASKED) -- PENSIVE ABOUT PENSIONS?

The Red Ant has heard from several of you recently, inquiring about the status of the city of Aspen's "pension plan" for its employees.  Given the alarming status of public employee pension funds throughout the US, this was certainly an issue worthy of examination, especially in the current economic environment and the tight local 2010 budget.

In California, for example, according to a Stanford University study commissioned by Gov. Arnold Schwarzenegger, the state is in far greater financial trouble than anyone knew, now that it has been reported that the state's three public employee pension funds (CalPERS, CalSTRS and UCRS) "lost $109.7 billion in portfolio value in one year (June '08 to June '09) and are currently in a shortfall of more than half a trillion dollars."  By law, taxpayers are required to pay the pension shortfalls since, unlike the federal government, local governments cannot print money to cover budget deficits. 

What does this mean locally?  Back to Aspen's City Hall ... Where do we stand?  What is the status of our "liability" as taxpayers?  How are things being run over there?  At first inquiry, The Red Ant heard back from the city clerk who wrote, "There are no pension funds as the city does not have a pension fund.  We have a defined contribution plan.  The taxpayers are not required to pay shortfalls as there is no pension fund."  Good news, right?  Well, not so fast...  The good news is that we have a defined contribution plan.  But contributions are a compensation obligation of the city and are part of the payroll budget.  Have these contributions been made?

The Red Ant's follow-up inquiry was addressed by city finance director Don Taylor, who outlined the city's retirement plans.  For a change, some good news from city hall:

• Thankfully, Aspen DOES NOT have a defined benefit plan, which is based on ending compensation and the number of years worked.
• In its defined contribution plan, the City of Aspen offers a deferred compensation (457) retirement plan, a Roth IRA and a 401(a) retirement plan. 
• The city contributes 5% of the employee's gross salary to the 401(a) retirement plan.  This increases to 6% at five years and 7% at 10 years. 
• From a budget perspective, there is a proportionate roll-up: as city employee salaries increase, the city's compensation obligation (the "contribution") increases.
• The city's contributions are current and managed professionally by external managers the International City Management Association Retirement Corp (ICMARC) and Nationwide, which handles legacy contributions for the longest-term Aspen employees.
• Notably, in Aspen there is no vesting period.  This is unusual.  The majority of municipalities have vesting periods before employees can receive the full benefit of the contributions.  This makes Aspen's plan slightly more expensive, and provides no incentive for employees to remain in their jobs.
• In 2009, the city contributed $1.2 million (2.39% of operating expenses), and $1.3 million is budgeted for 2010 (2.63% of operating appropriations).  NOTE:  While the City's operating budget* decreased year-to-year (by nearly $1 million --- $50.3M to $49.4M), so did the number of employees due to lay-offs.  And contributions still increased... in real dollars and as a percentage of the budget.
• The Roth IRA is available to employees who wish to put away after-tax dollars in order to accumulate earnings that will not be taxed later upon withdrawal.   
• Employee contributions to the deferred compensation 457 plan are optional; the 457 functions similarly to a traditional IRA.  Public employees may contribute pre-tax dollars from their salaries and pay applicable taxes on the principal and earnings upon withdrawal.
• With a deferred compensation plan, the city (and thus the taxpayer) does not have to make up any losses that are incurred due to market forces and/or management losses.  However, if the payroll budget does not cover the compensation obligation (the "contribution"), these funds will have to come from elsewhere in the city budget.
• (For Aspen police officers, it's a little different.  They opted out of social security, but are required to contribute 9% of their gross monthly salary to the 401(a) plan.  The city matches this 1:1, and the contribution is fully vested after 5 years of employment.  After 5 years, while the required employee contribution does not change, the city will contribute 10%, and after 10 years, 11%.) 

In short, compared to other states and municipalities, Aspen, because it is not invested in statewide retirement programs, is not subject to the nightmare earnings issues and unfunded scenarios that we keep hearing about.  With our defined contribution plan, we have no future liability. But remember, the city's compensation obligation to its employees is indeed a payroll budget line item, so Aspen taxpayers are indeed stakeholders in the collection and payment of these funds.  Taylor summed it up by stating, "It's one of the few things the city gets right."  Keep up the good work, Don!

(*Beginning in 2009, the city ceased budgeting separately for operating appropriations.  These percentages are based on fund levels that were part of the city's operating budget prior to this change.)

CALLING ALL "COUNTY ASSESSOR" CANDIDATES

After the recent property tax hikes, is this the year that Pitkin County residents want County Assessor Tom Isaac to run for re-election unopposed?  The deadline for filing is June 4.  This position pays $85,000/year.  If you or someone you know is interested, go quickly to www.PitkinVotes.org for more information.  And please spread the word!

AN "ANT BYTE" IN THE DAILY NEWS

This letter to the editor (click here) was printed in today's Aspen Daily News.  The nonsense never stops!

THE RED ANT SUGGESTS:

Get ready to vote!  Pitkin County has a primary election on August 10.  Unlike many other places, in Pitkin County EVERYONE (Republicans, Democrats, Libertarians AND Unaffiliated voters) can vote for county elected offices.  And we have several critical races:  2 Board of County Commissioner seats and Sheriff, among others.

Friends of The Red Ant who live in Pitkin County (yes, all of you on Red Mountain, Mountain Valley, Snowmass, Woody Creek, etc) who have been frustrated by so many local issues decided in city elections, this is YOUR opportunity to make a difference.  Please join the effort.

• To register to vote, click here.
• To request a mail-in absentee ballot, click here.  (Do this sooner vs later.  Your ballot must be received by the county clerk by 7p on August 10.)
• For early voting, mark your calendars now for the week of August 2-6, in the county clerk's office, 530 E. Main Street, Suite 101, 8:30a - 4:30p

The Red Ant will continue to remind you of this important primary, and will of course weigh in once all the races are determined next week.  In each race, the top two vote-getters (regardless of party) will be on the November ballot.  THIS PRIMARY IS CRITICAL FOR PITKIN COUNTY'S FUTURE.