Is Netflix A Sin

Or is it just a guilty pleasure? No matter, some local governments in Georgia want to treat it, and tax it, like a sin. Now the Georgia Municipal Association, a shaker and mover behind all things "tax" would tell you it is just another franchise fee which they claim isn't a tax, it is just "rent." As if the god in their heaven endowed them with the unalienable right to rent out other folks property. 

But there are some real problems in this nightmare on main street. First, what the hell happened to all that local control? Was that just the stinking bucket of political manure some thought it was? And why is it that the governments that tax residents seven ways to Sunday have no problem handing out multi-million dollar tax abatements to developers who are already making enormous profits? And keep in mind those same advocates of taxing us for Netflix justify it by saying that Netflix is very profitable. First, clamping down on market success is not a sound intellectual argument, else we'd expect to see taxes on restaurants based on their success. Or how about this: a tax on developers based on how profitable they are. Never. Going. To. Happen.

So what should happen? Well, let's take a page from the antifa/BLM movements, Silence Equals Consent and any elected official who remains silent, who refuses to stand up and speak out against these punitive taxes should be removed from office and replaced with representatives who will make the bureaucratic changes necessary to fulfill the promise of "local control." 

Lies And Damn Liars

They say that nothing lies like a statistic. Well, actually...the most profound liars are to be found among government bureaucrats. The AJC dutifully reports that the Brookhaven Bozos have bowed up at the prospect of 5G for the people with the mayor PO-ed that the FCC told him "how much our dirt is worth" with the city manager walking that back with the claim it "is more about the prospect of multiple ugly poles in a single block of a residential neighborhood."

Wow.

When a city bureaucrat, a hired gun in this case, claims "it isn't about the money" you can bet your life that is exactly what it is about. And so it is. This is all because the FCC has set an upper limit on taxation and federal law says that lokel yokels cannot charge a higher toll for folks to use their own property. Though you'd never know it if you lend your ear to these fools, local governments do not actually own these poles, what sits on them or the dirt they stand on. How can you tell? Because if they did own it, these services would cost ten times what they do and most of the time it wouldn't even work. The truth is they simply do not own it. They just tax it. And guess who really pays those taxes. Not the utility companies, they just pass the cost along. To you. That's right. These governments are pissed they cannot gouge you for services they know you are going to demand.

And the funny part? For cities like Brookhaven (and Dunwoody) the vast majority of these infrastructure investments were made well before they came in and stole it from the prior bunch of parasites.

Franchise Fees: With Interest

Probably the most enduring post on TOD is Franchise Fees 101 and it is generally assumed this is due to folks trying to figure out how much the plunge into the deep end of the citihood pool is going to cost. It must be noted that other diatribes on these taxes (What Do Franchise Fees Buy? and Franchise Fees: What Are They Good For?) see little or no traffic.

Perhaps when the reader figures out that it is just another tax from just another taxing authority they give up. They may not even go so far as to learn that even the cable companies are now on a statewide franchise whilst the local yokels keep dragging in the money. So you pay and you pay and you cannot even go down to City Hall to raise a stink over that cable that has been lying across your yard for the last four months. Not their problem, take it up with the State. Oh, and good luck with that.

Or maybe they just total up the cost of Franchise Fees and shrug "this is chump change." It is. In comparison to the other costs (think of FARA writing Home Alarm Registration city ordinances) foisted on you by your newly minted and inexperienced (incompetent?) City Council that would indeed be the case. The fact of the matter is that Franchise Fees are the least of your worries if you're being driven like cattle into the slaughterhouse of Citihood.

Do not let Franchise Fees distract from more dangerous problems. A quick survey can be found in Shout Out To Frederick County, MD. It is incomplete but it is a good start.

You might also look to the track record of nearby upstart Cities, particularly Dunwoody and Brookhaven if you're forming your new circle of governmental hell in DeKalb County. Dunwoody has recently employed the sneaky back-door tax increase by keeping the same millage rate but refusing to craft a revenue neutral (lower millage) tax. This allows politicians to say "we did not raise the tax rate." Legal but deceptive and exactly what they've complained about for decades when the county does it. Then there's Brookhaven. Riding in on their moralistic white horse to joust with the strip clubs only to come out of the engagement muddy and bloody but with saddlebags overflowing with lucre. We'll not go into how quickly Lysol can stain a reputation.

We'll blast past it. 

The real canary in these mine shafts is the City Attorney. If not directly involved in founding these cities they are at least well connected to the powers behind them. And that both Dunwoody's and Brookhaven's CAs have gone down in flames leaving a dark trail of ethical smoke should give anyone even pondering a vote FOR another city like these (and they're all like these) considerable pause. Who are these people? Consigliere? And who the hell are they beholden to, our local version of a political Mafia?

Now you're catching on.

These cities are based on a particularly nasty foundation of greed and a lust for power because to a large degree this is a zero sum game. In their scratching and clawing to get "their share" they will set aside the truth in favour of convincing prevarications, what little integrity they  have will disappear and any transparency will be thru their distorting prism.

Though the citihood outcome is unavoidable there is a way out. Push for an amendment to allow these cities to form their own schools. Now these schools won't be any better (probably worse) but there are enough lemmings out there who will race to the cliff of "local control" that your home value will see a significant bump. Remember the end of busing (aka M to M)? Same thing, only more so. Once the bump kicks in and before the fools realize City Schools are same song second stanza, you cash out. Just get the hell out of Crazy Towne.

Franchise Fees : What Are They Good For?

Mayor Kasim Reed seems to have bladder control issues as he just cannot seem to avoid pissin' contests with damn near everyone he comes in contact with. The latest is AT&T and is over the costs incurred by AT&T to relocated equipment and infrastructure so that Kasim's toy train could be set out in time for Christmas. Didn't quite make Christmas unless you're Eastern Orthodox but that was the plan. So AT&T finds themselves in a $5.8 million hole and they'd like the city to cover the costs. Now given the realities of big business, AT&T isn't on the hook as much as their customers since AT&T consistently turns a profit. It should come as no surprise that the mayor who wants to steal millions from school children for his ring-around-the-rosies playground isn't going to pay up for collateral damage caused by his train set. That's where franchise fees come into play.

Now there are a few ways to look at franchise fees. One is they are just another tax, but with a label making them acceptable to Republicans who go into anaphylactic shock whenever they hear, let alone speak, the word "tax." Reed, being a Democrat, has no problem with the word but sees it pretty much like he sees everything else: any money he can get his hands on is his money. Fee, tax, who cares? It's just revenue.

Another view, one that came up in the Georgia Senate decades ago is that franchise fees are rent paid by utilities for access to public rights of way. Some considered this to cover any costs the franchising government might incur should the utility cause secondary damages to the rights of way when maintaining or upgrading their equipment or infrastructure. But since none of the franchising governments set aside any of the franchise fee revenue for that purpose one can only conclude that they don't see it that way.

A third view (though not the legal argument being used by AT&T) speaks to a more collaborative arrangement between the franchising government and the utility. This  PoV is based on the previous "fees to cover incurred costs" and expands it to include costs incurred by the utility should the franchising organization make changes in the rights of way that impact the utility. One could argue this is the case with AT&T and the train set.

Where it gets personal is when you view these large utilities, especially those with near or full monopolies, as a pass-thru billing service for the franchising government. In other words, we're paying these fees no matter how you view them and some are asking what we get for them. If the mayor wins (and his position is likely to be supported by every other mayor in Georgia) we, the taxpayers and ratepayers, will pay twice: first with franchise fees which get us nothing and then with higher rates necessary for AT&T to cover the costs caused by the city.

Brookhaven: Smarter Than We Think They Are

Google Analytics indicates that the fine folk of Brookhaven will not go blindly into a forced-upon-them city. They have shown particular interest in a couple of points that warrant comment.

The first is franchise fees:

1. A tax by any other name. All monies go into the general fund and not into an account set aside exclusively for the stated purpose of the levy.
2. Taking franchise fees as a whole, and comparing to combined property tax  with HOST property tax subsidy, franchise fees are the second largest income item. It is just another way to spell greed.
3. It is the "best kind of tax" as it is largely paid by folks without a vote, particularly businesses and to some degree folks in unincorporated areas. Screw them, eh?
4. By and large the county didn't receive these fees, yet the infrastructure these fees are allegedly required for are in place and doing quite nicely.  How can that be?
5. Franchise fee revenue makes any comparison stating the city will provide same or better services for "less taxes" morally and intellectually bankrupt.

Slimy politicians are pretty sure voters will tax themselves a dime to get a dollar from other folks, but to the extent that these citizen-voters are customers of local business, the voters are simply paying a pass-along tax. To mystify the reality city proponents are using the "Starbucks" tactic: this will cost you less per (month/week/day) than a latte at Starbucks. That they even have to address it at all is a credit to the soon-to-be good citizens of Brookhaven.

The second hot topic appears to be privatization of government services. This too is over-hyped by those hell-bent on yet another city in DeKalb.

1. It has it's place. If you have a janitor, auto mechanic or copier repair-woman on what will inevitably be a payroll characterized by gold-plated benefits then you are a fool.
2. Much like the city itself, the finances of wholesale outsourcing do not pass the smell test. The outsourcing company may offer economies of scale, but have no doubt, just as you will pay for new city bureaucrats, you will also pay for the profits and bonuses of these private outsourcing companies. How can this possibly be more cost effective?
3. You can re-bid often if you don't like the services or costs, but you will soon find you've exhausted all your options. Fact is there are not that many companies to turn to for turn key operation.
4. When you outsource services, you outsource quality, you outsource accountability and you outsource transparency. Any part of a city operation where you might, just maybe, want to make an open records request is not something you want these politicians hiding behind an impenetrable wall of "corporate trade secrets".

Privatization had been all the rage, but now, eh, not so much. Even in Sandy Springs, the poster child for Three Pee Uh Oh, the enthusiasm has waned, the costs have skyrocket and the loss of control has been deemed intolerable. If Dunwoody can show Brookhaven how to do anything it would probably be where to draw the line between in-house services and those contracted out.

You will be told a lot of stories that do not align with this view of reality. But you will listen because these pandering political prevaricators will become your new city leadership. At least you are starting early and you are asking some smart questions. Keep up the good work.

Brookhaven: Learn from Dunwoody

Brookhaven is well along in fulfilling its destiny as the next city to incorporate in DeKalb and there is much to be learned from its slightly older sister to the north.

First, it is inevitable, don't fight it. You don't have to blindly embrace it, but fighting will be like swimming in quicksand, but with a peanut gallery rooting for the sand. In the end you're going down and all you will succeed in accomplishing is adding your name to the list that includes "Shrill Jill" and "Farmer Bob". But again, you don't have to just sit in the corner, eat your cookies and drink your milk. You can think. You can analyze. And...if you are very careful, you can criticize.

Your CVI study is complete. In terms of content this is relatively insignificant, but as a milestone it means that the dominant power structure is in place. Just check out the assumptions underpinning the foregone conclusion that "shows Brookhaven would be viable". Then pull that string. Who insisted on these assumptions? Is it the same group that paid for the study? Just who are these people--not a group--real, flesh and blood, money makin', power-hungry people? Who the hell are they? They need to be outed. Early.

These are the folks who will run your city for the first few to several years. And they will run it to their benefit, not the benefit of the Citizens of Brookhaven (see, now doesn't that just sound right?). They will be pulling the strings of council and mayor, but even before, it is these, the few, the empowered, that will draft your ordinances, set the rules that dominate your life, and unlike the benign neglect of DeKalb, these folks will see to it that you toe the line. Or else. If you're in a HOA and hate it, think of this as a HOA on steroids, with the power to tax, condemn, and compel with an armed force. If you're in a HOA and just love it, then you're probably one of the assholes that will be running the city anyway.

When it comes time to vote, not for the referendum--that will be rigged, but for mayor and council, you might want to pretend it is the second or third election, not the first. By the time you get to the third election you will have become thoroughly disillusioned with all the pompous asses that promote themselves as having been some kind of great contributor to the cityhood movement or who played patty-fingers with other power-hungry frat boys in one of the unavoidable string of "non-profits" that foisted this city upon you. Those are the people you'll certainly vote against then. Cut to the chase. Vote against them now.

And you might just want to look at the financials. See, the proponents of cityhood are gonna tell you how "we can have the same or better services for even less money". Maybe. And they love to point out the elimination of the bifurcated "Special Services Tax District" which covers two of the much ballyhooed "3-P's" of new DeKalb Cities: Police and Parks. Fact is, these have to be paid for, and you will have your own overhead to cover down at the newly minted city hall. Expect "parks bonds" to be floated within three years of incorporation. Expect a police force that is twice as large as you will be sold on pre-referendum and a never-ending stream of budget increases backed by little more than flag waving.

As you dig down into the revenue side you'll see a big chunk o' cash: franchise fees. Turns out the county gets virtually none of this money as it is not incorporated but your newly incorporated Brookhaven will, so any financial comparison that ignores this disparity is intellectually bankrupt. Now much of this money comes from folks in unincorporated areas of the state, including yourselves at this point, but it largely/only goes to cities. Some folks, often those in unincorporated areas, find this morally reprehensible. But, as has been pointed out by leaders in Dunwoody, this money is necessary to support the city, and in your case it helps eliminate that SSTD assessment. So it's OK, right? After all, you've been on the downside of this great moral divide and now it is your turn to reap the rewards. This is how "situation ethics" works. All you need to bring to the table is a very flexible moral spine and an equally firm sense of self righteousness.

But wait! There's more!

You're gonna start this city, so you're gonna need "City Services". One thing Dunwoody did right (really, you finally read it here) was to ignore the siren song of the "Shills for CH2M Hill" who were advocates of Whole Hog "P Three Uh Oh", otherwise known as "privatization". Clearly many services should not add head count to the city payroll with its generous benefit package--and yes, you will find one of the first things enacted will be generous benefits. If you have a janitor, electrician, HVAC tech, mechanic, or even an IT guy, on city payroll then you're an idiot. By the same token, you'll probably NOT want to contract for police services. But there is much grey in between. Fortunately there is a simple rule to follow in deciding whether to outsource or not: if you can envision requesting information under the Open Records Act, then you want that function in-house. Otherwise, you're screwed. Well, you're probably screwed anyway, but if they can throw up the "sorry, private business information" roadblock, then you're screwed, glued and tattooed.

And finally, don't let your guard down. You're gonna have yet another set of politicians that require constant watching and frequent changing. Buck up. You gotta do both every chance you get.

A Momentus Day

December 1st marks the end of the 2008 Hurricane Season. It offers a time to reflect on the pre-season predictions and assess the accuracy of the experts. As sometimes happens, the predictions didn't quite meet with reality.

But December 1st is also the first day in the existence of the City of Dunwoody. This also offers the opportunity to reflect on where we are and how we got here, the end of our first season of Dunwoody.

Given that Dunwoody doesn't even officially start until Monday December 1st this might seem difficult, but...Dunwoody's Mayor and City Council have been in operation since being sworn in and prior to that operated under the auspices of the Governor's office and prior to that these very same folks who comprise the fledging government of Dunwoody operated the wholly political and quasi-governmental Citizens for Dunwoody and Dunwoody Yes! organizations. And as Dr. Phil likes to say "the best predictor of future behavior is past behavior". This gives a significant body of work to evaluate.

To make the job more manageable, let's look at some key metrics: No Taxation without Representation, Service Value, Integrity, and Transparency.

Taxation: D. This covers not only the taxation of various businesses operating within Dunwoody which likely have little say in city operations, but also the imposition of the Franchise Fee Tax which negatively affects everyone who lives in and uses utilities in Dunwoody, but more importantly represents a tax levied by Dunwoody on Georgians who live outside Dunwoody. Remember the primal scream of cityhood? No Taxation Without Representation!

Service Value: C. This is one political hot potato. On the plus side: a city hall not in the city because it is cheaper; and dodging the CH2M bullet, but on the minus side: tacit acknowledgment that the CVI study was bogus; serious, allegedly surprising, startup cash flow problems; insufficient funds for promised police staffing; and no immediate prospects for park or road improvements.

Integrity: F. There is just no other way to say it: the citizens of Dunwoody have been lied to from the beginning. A now suspect Carl Vinson Study produced under the direction of cityhood proponents. Task Force reports withheld until after the referendum. The Citizens for Dunwoody and Dunwoody Yes! operating outside public view and review as was their legal right, but since they were influencing events affecting us all there was a moral imperative to operate openly. A moral imperative they diligently ignored.

Transparency: F. You probably cannot have integrity without transparency, at least in government, and when the first official meeting of the City Council results in the first official open records request, you get a pretty good idea how committed the Mayor and Council will be to their pledges of transparent and open government. One might accept them as technological novices but for the fact that someone associated with CfD and DY! demonstrated an amazing ability to put up (and tear down) websites and post Shrill Jill videos when it suited their purpose.

So there you have it. On the issues that matter most to most of us, Taxes, Services, Integrity and Transparency, this city earned a first term grade of D-, far short of their original promises. Maybe next year there will be a hurricane Dunwoody that meets predictions.

TOD

It's Official: Dunwoody's For Sale

Well, maybe not or maybe it's just our integrity on the block, but it is increasingly clear that it is all about money:

1. While our likker laws do keep out undesirables, more than anything else they generate revenue. Lot's of revenue. And by golly, that's what governance is all about--spending other people's money.
2. And these likker laws are just a part of the business ordinances (IE: taxation) that the City, shall we say, derived from the existing county ordinances. Now remind us--those of us in The Other Dunwoody--wasn't this new city supposed to be better than DeKalb. Increasingly it looks more like a governmental mini-me.
3. Now that we have a City Hall on the cheap, some questions have been raised regarding its location in Sandy Springs, to which members of the council have responded: you can't beat the price. Well, actually if Quixote and his faithful side-kick, Pancho, hadn't gone jousting at windmills, we'd still be in unincorporated DeKalb and as events are about to prove, that would be cheaper. So, do we really want cheaper? No. We want what we want, we just don't want to pay for it.
4. And, the ever-popular Franchise Fee Tax has been officially revealed as just another tax increase. It's not clear how those outside The Other Dunwoody view it, except that the Chair of the Dunwoody Fan Club, Dick Williams, says: "Franchise fees, like 'em or not, have been part of the Dunwoody budget from Day One. Can't do it without them." Well thanks for the clarification Dick--this end justifies any means.

You might be surprised at all this late-in-the-day grubbing for money, shocked at feigned surprise regarding the delay of Franchise Fee/Tax receipts and the allegedly unexpectedly large police requirements. Yet, you know they squandered the extra year donated by Fran Millar, failing to put in place a startup plan, a one and five year plan, a comprehensive land use plan, and the financial models and budgets that demonstrate feasibility.

You might even be getting the idea this is more like a bunch of overgrown children trying to spell "god" with all the wrong blocks than a well-planned civic endeavor.

You might be catching on.

TOD

What Do Franchise Fees Buy?

We can learn quite a bit from our neighboring cities on this topic. It appears that Chamblee, which also levies the Franchise Fee Tax, is considering a lawsuit against Georgia Power concerning the location of a substation. Why is this puzzling?

Well, the Georgia Municipal Association, an organization representing the interests of cities (though not necessarily their citizens) claims "franchise fees are not taxes, but are rent paid for the use of city public property by a utility". But if that were really the case, then Chamblee would buy, and own, the property for the proposed substation and would then lease it back to Georgia Power. The reality is that Georgia Power is buying the property they have (unilaterally, as is their right) chosen for the substation and furthermore were that property not for sale, they retain their powers of imminent domain and could force the sale.

Clearly, cities are not maintaining, expanding or controlling the property within their own city limits used by utilities. Once again, it is revealed that Franchise Fees are no more than appropriation of paid for assets and a new and never-ending tax by cities, including Dunwoody.

TOD

Fool me once...

...shame on me. Fool me twice...

Perhaps that isn't going to happen. The backlash against Citizens for Dunwoody is beginning and let's hope it isn't too little, too late.

The Peach Pundit has taken notice of our impending financial woes. While that is mostly outsider gloat, there are some inside the city who are less than pleased. One commentator on Heneghan's Dunwoody Blog was surprised at the announcement of a budget shortfall. Another interprets recent events as the beginning of good old boy politics in Dunwoody.

Citizens of Dunwoody are beginning to feel duped. Because they were.

The referendum was rushed with the vote held before task force reports were available. Decide for yourself if that was intentional, but it is becoming increasingly clear voter ignorance was on the side of cityhood. Everything is on an accelerated schedule except full disclosure. That can wait. The nonprofit lobbying organization, Dunwoody Yes, even failed to file required disclosure reports on time.

Yet there was time to issue an RFP. From an organization with a top ranking official who has close ties to CH2M. Interestingly, CH2M was the only qualified bidder. You connect the dots.

The Carl Vinson Institute was given direction that resulted in a fairy-tale scenario supporting financial feasibility. Self-appointed leaders have acknowledged ignorance on significant revenue sources including the ever-popular backdoor tax known as franchise fees. Now we find out they had no firm grasp of cash flow--they didn't know that certain business taxes wouldn't be available until the end of 2009, or...perhaps they did.

This fiasco was created by The Few, The Self-Appointed, The Self-Righteous, but not without our help. Sadly, many of these same people intend to and probably will run our new city. Only a fool would expect them to do better after these elections than they have so far.

Let's hope we don't have a city of fools.

TOD

Franchise Fees 101

What are franchise fees?

Well it depends on whom you ask.

If you ask Ga Power, they consider it a "local tax imposed on utilities for the privilege of providing a service within city limits". Georgia Power, like everyone else, recognizes that each individual customer does not, and many cannot, pay the full cost of delivering electricity to their individual home or business. That is why these fees had been rolled into the rate structure and hidden from the rate payers.

But if you ask the Georgia Municipal Association they consider franchise fees " rent paid for the use of city public property by a utility ". They will assert this 'rental' costs the utility less than free market acquisition of rights of way or condemnation. This conveniently ignores the facts:

• this 'rent' is paid in perpetuity, and always increases
• however, an outright purchase is a one-time cost amortized over the same period
• the municipality provides no service for this 'rent'
• most municipal easements have been in place for a long time
• new cities are taking over existing assets without compensation

The bottom line is that utility franchise fees levied by municipalities are little more than a tax on the revenue earned by a utility within that municipality.

But how do they work?

Georgia Power pays municipalities a sum of 4% of the power sold within that municipality. Georgia Power, like all successful businesses, does not pay taxes, they collect taxes, so they pass this cost along to their customers. In total Georgia Power collects and pays municipal taxes totalling over $100 million annually which no one sees on their power bill. In the past the statewide municipal franchise fees were simply rolled into the rate structure, appearing nowhere on any customer's power bill.

That has recently changed: siding, at least to some degree, with the "it's a tax" point of view, the Georgia Public Service Commission ruled in 2006 that Georgia Power should get one half of these municipal fees exclusively from rate payers in those municipalities with the rest remaining hidden in the rate structure. This resulted in municipal customers paying approximately 2.9% of their usage while unincorporated customers (or those living in cities forgoing the franchise fee) pay only 1.1%.

Needless to say the Georgia Municipal Association took the issue to court and after losing the case (and more of our tax dollars) the ruling took effect in January of 2008.

But all is not lost. City-folk are still getting a free ride on the backs of other rate payers, and not just those in unincorporated areas. All municipal customers pay the 2.9% tax including commercial and industrial users. And they pay proportionally more than residential users because they use proportionally more electricity. Since they don't get a vote in city elections it is politically expedient to institute taxes that hit the business community harder than residential users. That is already being leveraged by candidates and elected officials in recently formed Georgia cities.

Now this is just for electricity, which is by far the largest. However, franchise fees apply to gas, cable and telephone as well, but these are just other verses of the same song. All these bills are going up on December 1.

What does this have to do with Dunwoody?

Georgia Power franchise fees appear in the Carl Vinson study under 'other' franchise fees despite it being second only property taxes and representing over 13% of the budget. Given statements from the Citizens for Dunwoody that they directed the CVIG to include $1.5 million to cover potentially lost HOST funds, it seems likely this deceptive categoriziation was also at their direction.

Dunwoody is new. At the time of this writing, the city is not even in operation. All those power poles, transmission lines and substations pre-date the city, and presumably Georgia Power already owns the property and easements. Yet this new city proposes to charge them rent (which we will pay) for assets Georgia Power already owns.

We, the citizens of Dunwoody, have already paid for these assets through our past power bills, cable bills and phone bills. It was on the county's watch that our water lines were punctured installing fiber. But now, because of reckless city financial planning, we will be forced to pay for these again, and again, and again.

But what can we do?

Contact the Georgia Public Service Commission demanding that they complete the job they started in 2006. Ask them to:

• require that new cities compensate utilities for properties and easements that they intend to 'rent' back via franchise fees.
• change the franchise fee structure so that 100% of municipal fees are paid by rate payers in that municipality.

Vote for city councilmen who support not assessing these fees. But be very skeptical: they have 2.4 million reasons to lie.

TOD