What Is Going On In The Financial Markets?

What is going on with the federal bail outs and banks all over the world participating in the bail outs of United States financial institutions? The short answer is preservation of access to capital for world markets.

The world economy is predicated on fast and reasonably easy access to capital markets. Without it we are in the same boat as a third world country with lots of natural resources but no money.

Examples abound in South American and African countries. Peasant farmers and merchants may own their land or business but their lack of recorded deeds and business instruments makes their claim on assets undefined and of little or no value with respect to getting any loans or access to capital to expand their operations. They have no proof of ownership, eventhough the assets may have been in their families for generations. Recorded deeds and solid proof of ownership are not the norm in third world countries.

Right now we have a "frozen credit market" with banks unwilling to loan any money to anyone for any reason for fear they will have a run on their capital reserves. Banks can loan out many times the amounts of money they have on deposit in savings and demand deposits (aka checking accounts). The multiple is dictated by the Federal Reserve. It gets a lot more complicated than what I have presented here but cash, currency and coins in the economy represent a small fraction of the actual "money" flying around the world markets. It is for the most part debt secured by an equity position in some type of asset.

Financial markets are by defintion predicated on the belief that lender's will get repaid and borrower's will perform on the debts they have taken from the system. When the belief in the system gets toxic and debtors can't repay all hell breaks loose. Investments in non-liquid assets creates "technical insolvency". Fire sales of companies and their assets create a feeding frenzy in the economy.

With defaults in the housing market and other commercial paper assets, equity positions of those seeking credit is suspect to lenders. Financial markets granting credit have tightened requirements for loans and access to credit. Without access to capital via credit the economy comes to a grinding halt. Jobs, and demand for consumer products come to a screeching halt. Faith in the ability of creditors to pay back loans becomes suspect by lenders. Assets instead of appreciating in value, declining in value. Banks are not confident in loan to value ratios.

This may end up as the GREAT DEPRESSION of the modern era. However, the allways suspect government has acted quickly to stop the bleeding. Banks may have the toxic assets off their balance sheets but they still lack money and reserves. It will take some time for them to restore themselves to a position where credit is easily obtainable. Money market certificates may be a great investment after the election.

This is why the Western World Banks have come to the rescue of the United States Financial System. If we go down the tube the world economy falls with us. It will be interesting to see how long it takes for the credit market to un-freeze. Meantime, a lot of stocks and bonds are at fire sale prices and those with cash are going to make a lot of money out of all this misery.

This is a basic outline of the problem and time will tell if the fixes have resolved the issues with access to capital.

War Failures: Cancer and Drugs

THE GUARDIAN ran across some interesting statistics this past week and wanted to share them with you.

In the early 1970's two wars were declared: The War on Cancer and The War on Drugs. President Nixon was confident of victory in our time with these two high profile and high tax dollar funded war efforts. Here we are headed toward the fourth decade of these two wars and the statistics are pretty dismal.

If a war were killing 565,000 Americans each year, you would have heard a lot of noise about cancer death rates at the Democratic and Republican Conventions this past summer. Not a peep was heard about The War on Cancer. Reason, the cancer war has been raging and cancer is winning. Cancer is a disease(s) that destroys families and costs our economy $200 Billion Dollars annually in lost productivity. The facts are most cancers remain incurable. If you live long enough cancer will be the odds on health malady to take you out. We spend about $4,500 per year, per person in this country on health care and are about 41st in the world for longevity for all this expense.

Next, we have The War on Drugs. The cost of this war is about $40 Billion a year. Costs of drug related incarceration amount to $30 Billion with $10 Billion for enforcement and prosecution efforts. The war on drugs has been nothing less than a complete failure. As we head toward the fourth decade of this war, we have more availability of a wider variety of drugs with higher strength than ever before. Deaths from drugs are more than twice as high per capita in this country as they are in places like the Netherlands where drugs are openly sold (and taxed). Makes you wonder what would happen if we simply declared victory in this war and made them legal and taxed them like all other "sin taxed" commodities.

You can pull up the statistics on these two wars with little effort via the Internet. The numbers are sobering and depressing at the same time.

Pioneer Irrigation District Can't Get Along With Anyone for Any Reason

The "can't we all just get along" award goes to Pioneer Irrigation District. The good people at Pioneer Irrigation and their attorney Scott Campbell have squared off on the issue run off from Caldwell city streets and subdivisions and where it should go.

Your property rights for drainage are at stake with this lawsuit. The outcome will be felt statewide if PID wins.

The short version of the argument goes something like this. PID is worried about contaminants from city streets and private property ending up in irrigation canals. PID has not defined where or what the "contaminants" are coming from but want it to cease immediately. The city maintains runoff has been allowed to go into the PID canals forever and reflects decades of "past practices". Mr. Scott Campbell, the attorney for PID, successfully ran the meter with Settler's Irrigation District to the tune of $650,000 dollars for their rate payers only to have this same issue tossed out of court this past May. Mr. Campbell is the only person that will benefit from all the legal slings and arrows about to fly. PID rate payers and city residents will get stuck paying legal the bills. You may have seen the news release on the PID increases to pay for this legal scam.

Contamination is the crux of the issue raised by PID. Forget about the fact that the stuff they use to control weeds along their canal and ditch banks creates exposure to the public of category III herbicides and pesticides labeled with a skull and crossbones. Oh, and let's not forget about the stuff routinely used by farmers that goes into the irrigation water as runoff from their fields. Toxicity of the stuff used to grow our food requires a license before you can buy or apply most of this stuff at the poison stores in the valley.

We are all charged with being good stewards of the land and environment. The city of Caldwell is doing is what has gone on for decades and continues to be practiced all over the State of Idaho uncontested. What needs to happen. You need to get involved with the next board election that will take place this fall at Pioneer Irrigation.

The only problem is that PID does not operate with a "one man, one vote" set of rules. It goes like this with PID, one acre, equals one vote. They stack the board and write the rules with a few sympathetic growers and us city folk can just fagedda bout it. Caldwell Finance Director, Eljay Waite tried to get on the board at PID and he simply did not have the "acreage votes" to make become a member of Club PID.

Editor note:
You can go to the PID website and they have all the goodies on this lawsuit posted. Including a couple of photos of the alledged contamination problem, news releases, and filings. Court records indicate Caldwell has filed a motion for a jury trial. Pioneer Irrigation has filed a motion to not permit a jury trial.

Judge Decides No New Jail Without Voter Approval

A District Court Judge in Sandpoint says no vote of the people means no new jail!
Everyone's constitutional rights up held with this action.

A district judge in Sandpoint killed plans to build a new Bonner County juvenile detention center and work release facility without tax payer approval.

The plan called for land at the sheriff's office complex in Sandpoint to be leased to Rocky Mountain Corrections, a private for profit business. The private company would then finance construction of a 34-bed juvenile detention facility and a 60-bed work release center.

The county would use taxpayer dollars to pay yearly lease payments of $782,000 and would own the two facilities after 30 years. The Bonner County Commishes worked out a financing scheme around a taxpayer vote by "saying" they would use inmate fees and payments for inmates from other jurisdictions. None the less it created a debt not approved by taxpayers according to the judge in this case

This past Friday, First District Judge Charles W. Hosack ruled the plan violates our Idaho Constitution. Specifically, Article 8 section 3, which requires a public vote and super majority on debts and liabilities that extend beyond one budget year.

The ruling made by Judge Hosack affirms a local citizen lawsuit that was made against the Canyon County Commishes on the Jerome property jail project and the issue of standing decided in that case when it ended up in the Idaho Supreme Court.

Our Commishes have yet another citizen lawsuit on their new jail project. We hope they tune into this case if for no other reason than to save Canyon County taxpayers more wasted money and embarrassment. Stay tuned this will have local implications.

Actions by city and county deciders to circumvent voter approvals of high dollar capital projects will more than likely take an intersting twist this year with the state legislature. They tried to get a sweetheart deal passed last year that would have given them a blank check book but it got defeated in the waning hours of the session.

Regional/Ubran Design Assistance Team (R/UDAT)

THE GUARDIAN got his hands on the 1991 R/UDAT study done for the city of Caldwell in 1991. Here we are in the year 2008, fully seventeen years later, and an additional $450,000 dollars worth of additional studies on what should happen in Caldwell. Progress has been pretty dismal looking backward from then until today.

The R/UDAT effort was put together by a group of civic minded concerned citizens of Caldwell and an ouside group of professional architects, planners and former elected officials brought into the community for a cold hard look at our community. The report is pretty blunt and to the point.

The time was ripe and the citizens left to implement the recommendations struck out with a great deal of gusto on number one on the list. Council-Manager form of government. It failed by 16 votes and the R/UDAT report hit the dust heap of Caldwell history.

Page six of the R/UDAT 1991 study recommendations are as valid today as they were when put together in 1991. To be fair, some of the things listed have been done but for the most part we continue to drift as a community without a plan for our future when it comes to using best practices for government, growth and development. Lack of political will, inability to see into the future or take a good look in the rear view mirror of hindsight are the chief faults of elected Caldwell City Government today and for the past seventeen years.

First on the list of recommendations presented to a group of about 450 excited residents hungry for change back in 1991 was to shift the city over to a council-manager form of government. Caldwell was the 113th city to take advantage of the process offered by conducting a R/UDAT study.

AIA architects, certified planners, former big city mayors and other professionals from outside the community shared their collective knowledge and wisdom on the opportunities for improving Caldwell. Best practices of the day went into the R/UDAT report effort.

Skimming over the list of what we needed to implement were strong development standards and to define what we wanted to be as a community. Even and consistent application of well defined community standards (design review) with respect to development and growth were also parts of the report. Reorganize city departments into not more than five city departments whose directors answer directly to a city manager was recommended. Strengthen land use regulations and code enforcement. Create consensus on a strong infill policy of existing undeveloped areas to relive strain on city infrastructure.

What has happened seventeen years later? We spent an additional $450,000 dollars on more studies, created urban sprawl, more demand for city services with haphazard development requiring more and more city water and sewer services miles and miles away from the city center. Allowed strip commercial development to go up in areas not consistent with what was wanted or needed. We paid for (and continue to pay)more and more city infrastructure on the backs of property tax payers and rate payers of the city via poorly executed exactments from developers and "hide the ball" use of a property tax driven urban renewal district to subsidize developers and their projects. Our elected officials quail at the threat of lawsuits if developers do not get their way. Standards and regulations are bent and or broken to accommodate developers at the expense of good planning practices.

THE GUARDIAN would encourage anyone interested in the future of Caldwell, Nampa or Canyon County to take a good look at the 1991 Caldwell R/UDAT study. There is a tremendous amount of 20/20 hindsight as well as forward thinking that went into this report. The City Clerk has it as a PDF and can send it to you via email on request.

Once all the "sweet spots" have been developed in any city in a haphazard unplanned manner it will be party over for the community. People left in the community will be scratching their heads wondering just what happened. Not many cities are in the position that Caldwell has right now with a "do over" for the downtown area and still time to get serious about planned growth within the impact area of our city.

City Manager government will bring a trained professional into the mix and will save us all a lot of money and prevent mistakes as we grow. It won't happen without a bottom up citizen demand for action.

If you don't see anything wrong with the photo in this post you miss the point and all is well.

Ugly Side of Caldwell and Nampa Urban Renewal (TANSTAAFL*)

THE GUARDIAN received this opinion and has posted it for your consideration. This is in response to the articles on Caldwell Urban Renewal and the OUR VIEW OPED pieces in the Sunday IPT.

Growth in Caldwell and Nampa has increased all taxable valuations which means there is more real estate at risk for fire, earthquakes,and other natural disasters. This means we will need more K-12 schools, police, fire protection, roads, water and sewer demands, and all the other city services supported by property taxes.

But Urban Renewal is preventing the cities of Caldwell, Nampa and Canyon County from receiving all property taxes levied that would ordianarily go to fund city and county services. The cities and county get only the taxable values of the properties on the books prior to the formation of urban renewal districts. Urban Renewal Boards get all incrementally increased taxes to spend as they see fit.

Who will pay for city and county services demanded by all this new growth? The obvious answer is poor families, the old lady on a fixed income, and the hard working middle class of Caldwell, Nampa and Canyon County. Taxes on all the appreciated values and improvements within the boundaries of the urban renewal district go directly to the Urban Renewal District.

Wouldn´t it be nice if Caldwell Nampa or Boise would give YOU the increased tax revenues on all the improvements to YOUR home (or neighborhood) simply because the taxable value has increased?

No argument about it; tax subsidized urban renewal projects increase all property values in a community, but all of it is on the backs of common folks.

Think of the house YOU could build if Caldwell and Nampa offered up land, water, sewer and street improvements and provided low cost financing etc. for a project you would like to do.

Urban Renewal stinks as it relates to average citizens and property taxpayers.

Also, most citizens don´t have the money and legal resources used by Caldwell, Nampa and Boise. They take your tax money to lobby the Idaho State Legislature and file¨"friend of the court" briefs like Boise CCDC did in Rexburg on a swimming pool project.

Where is the need for the city of Caldwell or the Urban Renewal District to be involved in providing a structure for TVCC solely at the expense of Caldwell property tax payers?

Lastly, there is the issue of conflict of interest on the TVCC project. It flies in the face of the voter approved College of Western Idaho.

*TANSTAAFL, "THERE AIN'T NO SUCH THING AS A FREE LUNCH" cited in most Econ. 101 classes.

Are Caldwell, Nampa and Canyon County Ready for City Manager Govt.

THE GUARDIAN has been asking himself how many of our elected officials at city and county levels would have their jobs if they had to go through a formal hiring process. Moreover, how many of these well meaning folks would you put in charge of a $50-100 million dollar company as CEO? The only requirement other than getting elected is to be a registered voter. This qualification set appears weak, at best, when you start scratching on the surface of the issues our communities face today.

In 2007, more than 3,500 (49 percent) of the 7,171 U.S.cities and towns with populations of 2,500 residents or more operated under the council-manager form of gevernment. This structure is also used by more than 370 counties. More than 92 million people in the U.S. live in communities that operate under this form with professionally trained and educated city/county managers. (taken from ICMA webiste)

City Manager form of government grew out of political reform movements to facilitate a system of local government which combines strong political leadership of elected officials with the strong managerial experience of a professional local government administrator.

The goal of the City Manager is to provide professional administrative assistance to the City Council in establishing policies, programs, and services offered to the community.

A City Manager is appointed by the City Council to serve as the Chief Administrative Officer of the organization. The City Manager coordinates fulfillment of policies and programs established by elected City Councils. The City Manager provides overall direction to departments that administer City programs and services; implements inter-departmental programs for human resources, strategic planning, and emergency preparedness; and coordinates intergovernmental relations, lobbying, economic development, and public information efforts. The City Manager also oversees projects such as property acquisitions, special studies, such as annexations and development impact fees.

City managers typically will hold at least a Masters Degree in Public Administration or Management with excellent skills in finance, accounting and knowledge of governmental affairs. Good ones typically have 15-20 years of education, training and experience. They save cities and counties money!

How do they do this...education,experience and training beyond just being a registered voter with a desire to do the right thing.

Currently, only three cities in Idaho have city manager government, Twin Falls, Lewiston, and McCall. It may be time to join the other 49% of cities in this great country by a vote for professionally managed government.

Does Idaho Need a Medical School

THE GUARDIAN attended a service club lunch this past week and the topic of the program was about the need for Docs in Idaho. We have one of the oldest average age levels for doctors at all levels of the medical field in Idaho. They will be hitting the rocking chairs in the very near future. The question is ...What to do and how soon? Think WAMI, Washington, Alaska, Montana, Idaho Medical School Program!

Our program speaker was Dr. Sam Summers and the point he made was the huge cost of funding a medical school in Idaho. It is a cost burden to all state taxpayers that most folks do not fully understand. The short answer is to fund more slots for Idaho student to attend the University of Washington and Utah via the WAMI Program . These two states have indicated that they are willing to accept more students from Idaho but want to be paid for the cost of the services.

The costs charged to Idaho would be the difference between in state and out of state tuition for students accepted into their programs. Students pay the in state tuition and the difference for the out of state tuition is paid by Idaho taxpayers. The cost today is about $50k per year for each student in the program. Idaho gets twenty slots every year at the University of Washinton. This arrangement sounds very reasonable to THE GUARDIAN. The State Legislature holds the votes to make things happen. All we need to do is fund more slots.

Currently, the president of Idaho State University is doing a full court press to get a medical school up and running at ISU. No matter what the cost is to the taxpayers. Cost benifit is not the issue here, it is a few people trying to do a noble thing but at a very high cost to the citizens of Idaho.

We have in past years had significant levels of "one time money" in the state budget surplus. How about putting this money into some kind of a foundation to fund slots for medical students from Idaho. Just a suggestion from a fertile mind..

Boise Weekly Features Guardian Editors

Boise Weekly features Guardian Editors, see "Cities in Disguise" article.

In a well written and fair piece about the cities of Idaho vs the citizens right to vote, Lora Volkert wrote about the perils of urban renewal in the current issue of BOISE WEEKLY.

The decision in Third District Court is still pending, so no comments here further than the court record reported by Volkert. www.boiseweekly.com

Canyon County Deciders Want Your Opinion

CALDWELL - The results of the public opinion ballot used to help educate the public about Canyon County's new ballot style, which was voted at the Canyon County Fair, are now available at www.canyonco.org. Rather than the familiar punch card, voters in the Nov. 4 General Election will use a pen to darken an oval corresponding to the selection of their choice. The public opinion ballots are in this new style.

The Elections Office has a number of ballots remaining and Canyon County residents who did not vote at the fair are invited to the Elections Office at 1102 E. Chicago in Caldwell, to express their opinion on a number of current Canyon County issues. The ballots will be available through Sept. 12.

This is a non-binding opinion ballot that will be reviewed by County Elected Officials and Department Heads. Interested residents may also call the Elections Office at 454-7562 to request a public opinion ballot be mailed to them. The voter must pay return postage.

It is important to note that for an official election such as the upcoming General Election, absentee ballots cannot be requested by phone. In an official election the requestor's signature must be compared against the signature on his or her registration form. In an actual election, voters may request an absentee ballot on plain paper, submit a completed absentee ballot request obtained from http://idahovotes.gov/, or request an Absentee Ballot Request from the county elections office by phone at 454-7562.

Requests for an absentee ballot in an official election may be submitted on plain paper but must include the voter's name, Canyon County residence, address the absentee ballot is to be mailed (if different from county residence) and signature. All unsigned requests, whether on plain paper or official request forms, will be returned unfulfilled.