Tulsa City Hall: October 2011 Archives

While Oklahoma voters have closed off most avenues for tax hikes without a vote, there remains one loophole: the sinking fund. As Tulsa County Assessor Ken Yazel explains in the news release below, each taxing entity (a city, for example) presents the county excise board an estimate of the property tax money it will need added to the sinking fund in the coming fiscal year to repay general obligation bonds and judgments against the taxing entity.

The excise board is supposed to analyze the request and determine its validity before approving it, but according to Yazel, the Tulsa County Excise Board has been rubber-stamping requests, resulting in a property tax increase for all Tulsa County property owners once again this year, without any vote of the people.

The property tax increase requested by the City of Tulsa includes money for the final payment of the Great Plains Airlines settlement, a settlement that was thrown out by the Oklahoma Supreme Court well before the Excise Board voted to approve Tulsa's request. Yazel called this to the Excise Board's attention at the meeting on October 19, 2011, but they rubber-stamped the request without any amendments. A motion by one board member, Ted Kachel (appointed by the district judges), to delay the decision until they could learn more about their prerogatives to review and amend requests from the taxing entities died for lack of a second.

Don Wyatt's Boondoggle Blog has a summary and audio of the Tulsa County Excise Board meeting. The apathy on the part of the board's majority (Oklahoma Tax Commission appointee Ruth B. Gaines and Tulsa County Commission appointee Warren G. Morris) is appalling. They don't want to exercise independent scrutiny and judgment to protect the taxpayer.

Wyatt makes an important point: Just because your property value declined doesn't mean that your tax will go down. If the decline in value reflects a general county-wide decline, the excise board will raise the millage rate to keep the same amount of revenue flowing in. It's as if an unelected body had the power to raise sales tax rates to compensate for economic slowdown and a decline in spending.

Here's Yazel's news release:

County Excise Board Raises Tax Rates in Spite of Concerns Expressed by Tulsa County Assessor

TULSA, OK.-- The Tulsa County Excise Board approved an increase in property taxes over concerns raised by Tulsa County Assessor Ken Yazel during its meeting held on October 19, 2011.

The county assessor's job is to appraise the fair market value of property in the county. It is the function of the county excise board to approve the amounts requested for property taxes that will be used in the calculation of the appropriate tax levies.

All of the entities receiving property taxes submit an estimate of needs for property taxes to the excise board each year. It is the board's responsibility to analyze those needs, approve the property tax requests, then apply the approved amounts to the certified property values furnished by the county assessor. It is from this process that the amount of taxes each property owner will pay is derived.

Yazel attempted to make the following points to the Excise Board on behalf of the taxpayers:

1. At its core, the county excise board has property tax oversight responsibility. The board has in fact historically voted on property tax rates with virtually no independent analysis of the various estimates of needs.

2. Instead of analyzing the requests as the statutes dictate, the board merely relies on a county employee to provide them with the millage rates. To properly exercise its oversight responsibility, the excise board needs its own independent analyst to help it fulfill this responsibility.

3. Statutes require the excise board to take into account (for all entities requesting property taxes) cash balances and revenues from all sources. The requirement is there so the excise board can determine whether the requesting entity actually "needs" what has been requested.

During the meeting, one excise board member characterized the board's activity over his eight year tenure as "rubber stamping" the millage rates presented to them. He expressed some regret for this and asked the assistant district attorney for a better understanding of the board's responsibilities. Another member stated bluntly that he is incapable of analyzing the requests.

Yazel's position is not that the excise board or the county employee are doing anything other than what has been the practice for years. Rather, he is trying to help the board understand that in an era where cumulative property values are going down and the demand for money and tax rates are increasing, they have broader obligations and authority to review and potentially modify these requests than they have been exercising.

"As an example, I attempted to point out the situation related to the City of Tulsa sinking fund and the Great Plains $7.1 million judgment," said Yazel. "The Oklahoma Supreme Court recently ruled that payment to be invalid. However, the City of Tulsa put the final portion of that payment into their current request for property taxes, having done so before the Supreme Court made its ruling. I was trying to get the board members to see that they were about to raise taxes on the citizens of the City of Tulsa for a payment that the Supreme Court had invalidated. In the end, they approved the request with no changes. This proves the point, that before raising taxes they need to be more deliberative and analytical and not merely accept what is put in front of them as accurate or complete."

Total property tax revenues collected in Tulsa County have risen over the past 10 years from $397 million to an estimated $621 million for the current year, even though in many communities the population and/or the cumulative property valuations are going down. An increasing number of residences are being converted to rentals, and there is some evidence that businesses are locating in neighboring counties because of the marked difference in tax rates.

"This is a trend that is unsustainable in the long run, and that is my concern on behalf of the taxpayers," Yazel said. "It is much easier for public officials to address it now. It will be exponentially more difficult to deal with in the future if this pattern continues."

Ken Yazel was elected Tulsa County Assessor in 2002 and was re-elected in 2006 and 2010. A retired Major, U.S. Marine Corps, Yazel was also a CPA for many years. During his time in county government he has continually fought to lower taxes and ensure that property values in Tulsa County are fair and equalized.

A couple of readers have emailed to express their concerns about the imminent introduction of chloramine into Tulsa's water supply. I am only beginning to study the issue, and it seems there may be reason to worry.

Rather than make you wait until I've thoroughly researched the matter, I've decided to present the concerns expressed by one of these readers, with her permission. I would be glad to post knowledgeable answers to her questions and other points of view on this issue.

Jeanine Kinney made the following remarks at the October 4, 2011, City Council committee meeting:

CHLORAMINE

The Health Department's, the Water Department's and The EPA (Environmental Protection Agency) are claiming that Chloramine is safe for all everyday uses, drinking, bathing & cooking et cetera. Yet, the EPA itself admits that it has no Respiratory, Digestive, Skin & Epidemiological studies on the Human Health effects of Chloraminated water. The limited Cancer studies on Chloraminated water are so few that they are considered inadequate for assessment. Even though these studies show some evidence that Chloramine itself is a carcinogen, NO determination can be made from those handful of studies. The fact is there are not enough scientific data to know if Chloraminated water is safe for any uses for Human Beings.

Thousands of people all over the country and even in other countries have reported severe and life threatening respiratory, digestive and skin symptoms whenever they are exposed to Chloraminted water. These people have proven by avoidance and re-exposure that the Chloraminted water is the culprit for their symptoms. They do not have these symptoms when they are NOT exposed to Choramine and as soon as they are re-exposed their symptoms return. These symptoms fall into exactly the "gaps" in the scientific data about Chloramine's safety and the Respiratory, Digestive and Skin studies that DO NOT exist.

In addition to the immediate health effects that people are reporting from Chloraminated water is the grave concern about the emerging science in the very little known Disinfection By Products (DBP's) of Chloramine. These DBP's are NOT yet regulated, but are turning out to be many magnitudes more toxic than those of Chlorine. (THM's & HAA's)

Finally, Chloramine is much more corrosive to plumbing, lead pipes, copper pipes with lead solder and brass plumbing fixtures, which contain lead. Lead is being leached into drinking water because of the corrosive effects of Chloramine on combinations of these metals. Sometimes the level of lead leached into the drinking water is extremely high. Children from Chloraminated water districts are showing high levels of lead in their blood. And for those of us concerned about our environment, Chloramine is much more toxic to fish, frogs, amphibians and to other aquatic life. Water main breaks with water disinfected with Chlorine rarely does any damage unless the level of Chlorine is extremely high. But with Chloramine, however, even small traces from breaks and leaks, as well as from people washing their cars or watering their lawns can wipe out fish, frogs and amphibians in nearby ponds, streams and lakes. WHY RISK OUR FRAGILE ENVIRONMENT IF THERE ARE BETTER ALTERNATIVES????? And there are alternatives that are safer like:

Enhanced Membrane Pre-Filtration OR

Combinations of Alternative Disinfectants & Disinfection Techniques OR

Mixing well water with surface water to dilute the DBP's (Disinfection By Products) OR

Air Stripping of the THM's (Trihalomethane's), to name a few!

In closing today, I really want to believe in my heart that each of you 9 City Councilors took your position on the City Council in order to help, protect and look out for the best interest of the people of Tulsa. I plead with you to help protect the health of Tulsa's water consumer's. Please oppose the use of Chloramine as it has not been studied for the very health effects that people all over the country and all over the world are reporting.

A week later, on October 11, 2011, Kinney was at another City Council committee meeting to attempt to get answers to her questions about chloramine:

There was a Tulsa City Council meeting, Tuesday, October 11, where discussion with the Deputy Director for the Public Works Department, Clayton Edwards, & City of Tulsa Ammonia (Chloramine) conversion project leader, Joan Arthur took place. There was not one member of the TUMA (Tulsa Metropolitan Utility Authority) Board present for discussion. The meeting was set regarding the postponing the implementation of using Chloramines in the Tulsa public water system. The following concerns were attempted at being discussed, however, the meeting was terminated after a couple were asked and still yet unanswered.

Numerous email's & phone calls have been received regarding input and interest in Tulsa's conversion to Chloramine. Chloramine is to be used as a secondary disinfectant for Tulsa water utility consumers and those in surrounding areas, who do and will, purchase water from the City of Tulsa.

You state that Tulsa thoroughly researched the potential impact of the Stage 2 D/DBP rules and the alternatives available to meet the new regulations, for the last ten years. I would like to know exactly what treatment processes were evaluated and why these processes's were ruled out?

You state that the byproducts in some parts of the city, are projected to exceed or be very close to Stage 2 DBP standards. What data are these projections based on? Which parts of Tulsa are "problem" areas and/or areas where the levels of byproducts are projected to exceed standard levels? By how much are these areas expected to exceed the standards?

You state that a small amount of ammonia will be added to the water. Yet, no one, not even the EPA, knows if even a small amount of ammonia is safe since there is NO data regarding how much ammonia is safe in drinking water.

You state Chloramine is less reactive in the distribution system. Yet chloramine, forms many disinfection by products that are much more toxic than the currently regulated, THMs and HAAs. Some examples include iodo acetic acid, NDMA'S and nitrogen containing DBPs, according to the journal AWWA, February 2001. (NDMA is a probable carcinogen)

Using chloramine as a residual does not "adequately" protect people from re-contamination due to water line breaks, road work, construction with water lines and home plumbing leaks. It is also a greater hazard to the environment. Water main breaches and run off into storm sewers, lakes or ponds, kills fish, frogs and other aquatic life.

Chloramine is much more toxic to aquatic life than an equal dose of Chlorine. The edition of even small amounts of Chloramine to aquariums or fish ponds quickly results in death for fish as well as frogs, amphibians and other organisms. This has never happened with Chlorine unless unusually high concentrations of Chlorine were present in the tap water.
You state that trihalomethanes are linked to bladder cancer. The data shows that it takes 70 years of chronic exposure to trihalomethanes, to see a 1.7% increase in the incidence of bladder cancer. Bladder cancer is the easiest type of cancer to treat and has the lowest mortality rate.

You state that the maximum residual disinfectant level (MRDL) of 4 mg/ L is approved by the EPA. However, the EPA based this MRDL on studies that are incomplete. The EPA simply substituted data for chlorine, to fill in the "gaps" in the studies on chloramine, since the studies on chloramine were never completed. The EPA has ASSUMED that chlorine and chloramine have similar health effects, but studies from OSHA and NIOSH, prove otherwise.

Chloramine is a much more potent respiratory and dermal irritant than chlorine. It has different chemical properties and reactivity than chlorine.

CHLORINE IS NOT LIKE CHLORAMINE.

You state that you will be monitoring the lead levels in the distribution system for one year. Will you test water samples in homes, apartments, office buildings, schools and other building's in and around Tulsa? And if so how many residences & building's will be tested? How frequently will they be tested & in what manner will they be tested? (When samples are collected, will you take a first draw? Or will your flush/run the water to clear out the pipes? Flushing can miss the lead that may be present in the water, due to chloramine's corrosive effects on plumbing that contains combinations of copper, lead and brass).

You state that chloraminated water is safe for all everyday uses. However, there are NO skin, respiratory or digestive studies nor is there any epidemiological data to prove that statement. It is in fact your opinion. You can verify that these studies DO NOT EXIST, by looking chloramine up in the IRIS, published by the EPA. The EPA DID NOT study the dermal, respiratory, ocular, and digestive effects of chlorimanated water. The limited cancer studies on chloraminated water are considered inadequate for assessment. There is some evidence that chloramine itself is a carcinogen but, we do not know for sure if it causes cancer, what type and at what levels.

The truth is, that there is not enough data to know if chloraminated water is safe for ANY uses, for human beings. Until those studies are done, NO ONE can say that chloraminated water is safe. No studies = WE DO NOT KNOW!

Finally,

You state that currently 30% of all municipal water treatment systems rely on chloramine disinfection and that chloramine has been used for over 90 years. Still, ONLY studies will prove if chloramine is harmful to human health!

You state that neighboring cities like Oklahoma City, Norman, Sand Springs, Lawton, Dallas, Fort Worth, Denver, and St. Louis have converted their water disinfection process over to Chloramine. That DOES NOT PROVE THAT CHLORAMINE IS SAFE!

There are numerous cases in Pennsylvania, California, Washington DC, North Carolina, Texas, Oklahoma, Dallas, Vermont, Massachusetts, Colorado, Maine, Arizona, Florida, Oregon, Colorado, in which citizens are reporting serious health effects as a direct result of using Chloraminated water for drinking, bathing, cooking and other everyday uses of their tap water.

Where is the data supporting the finding that the reported health effects from Chloramine are "isolated?" How do you know the similar symptoms have not occurred in any of the cities using Chloramine that Tulsa has contacted? Did you contact hospitals and clinics, to ask if there had been increased reports of skin, respiratory or digestive symptoms, since the addition of chloramine to their water? How many cities and how many consumer's and residents were contacted? Until you have that information, you DO NOT KNOW what effects Chloramine is having on those residents.

Please do not put Chloramine in our water at the expense of the health of Tulsan's. We are already going to be paying more for an unsafe disinfectant when we should be paying more for a safe alternative!

MORE:

The EPA collection of frequently asked questions about chloramine.

The website of Citizens Concerned About Chloramine (CCAC)

Wikipedia article on chloramine

UPDATED 2011/10/13 with links to further reaction and my interview with KRMG's Nicole Burgin. Just remember, though, BatesLine had the story first, thanks to an email from an alert reader.

This post is worthy of a flashing light, a flaming skull, and 72-point type. Tulsa's taxpayers get our $7 million back.

The Supreme Court of Oklahoma has thrown out the Great Plains Airlines settlement by a 5-4 vote with three of the four dissenters concurring in part. From the decision (emphasis added):

¶26 In the present matter, the settlement was not based on a contract, but rather under the equitable theory of unjust enrichment to the City of Tulsa. The City of Tulsa, at all times, presented the settlement issues to the District Court of Tulsa County. The Judgments Against Municipalities Act does not apply. Therefore, the sinking funds requirement also does not apply. However, since we find the unjust enrichment claim to be unviable and the Statute of Limitations would bar the unjust enrichment claim against the City, we remand the instant matter back to the District Court of Tulsa County to direct the repayment of the settlement funds from BOK back to the City of Tulsa.

See my July 2, 2008, column, The Great Plains Ripoff, for background.

The Supreme Court ruling, sadly, lets Kathy Taylor off the hook for triple damages payable to the taxpayers who brought the Qui Tam suit over the Great Plains settlement. I'd hope Taylor would feel ashamed of ripping off Tulsa's taxpayers as she did, but I don't expect any remorse. The taxpayers of the City of Tulsa weren't as important to Kathy Taylor as the legal and financial well-being of her cronies.

UPDATE: Here's a link to a more readable version of the Supreme Court decision. Thanks to UTW's Jennie Lloyd for the tip.

MORE REACTION (2011/10/13):

City Councilor John Eagleton called it back in 2008 and in 2010, he cited the Great Plains Settlement as one of eight instances demonstrating Deirdre Dexter's incompetence as City Attorney, in a letter urging Mayor Dewey Bartlett Jr to replace her.

News Talk Radio KRMG's Nicole Burgin spoke to me Wednesday afternoon about the Great Plains settlement. You can listen to the full interview via that link. I discuss what should happen with the money repaid by BOK to the City of Tulsa, what lessons should be learned, and speculate about why the Supreme Court's vote was so close.

(My radio chops are very rusty. Way too many ums and ahs. I probably should have asked for a few minutes to gather my thoughts and mentally shift gears from engineering back to politics before doing the interview.)

The KRMG story has a statement from the City of Tulsa:

"The City of Tulsa and the Tulsa Airports Improvement Trust are currently reviewing the Opinion from the Oklahoma Supreme Court setting aside the settlement between the Bank of Oklahoma and the City and TAIT, and considering their options. The City is pleased the Court recognized the City entered into the settlement in good faith, but the ruling by the Court was a mixed result for the City. The ruling obviously will cause BOK to return to the City the $7.1 million the City paid to BOK under the terms of the settlement. The ruling also makes it clear that the City has no liability to BOK arising out of the Great Plains transaction. However, the settlement the court set aside was global in that it included all of the claims BOK had against both the City and the airport. The result is that although the City has no liability to BOK, BOK can now pursue its previous claim against the airport."

KJRH reports that BOK will be resuming its lawsuit against the Tulsa Airports Improvements Trust:

BOK issued a statement to 2NEWS saying, "The Supreme Court's invalidation of the settlement with the City has freed Bank of Oklahoma to assert its $12.5 million claim against the Airport Trust for not fulfilling its obligation to the bank. While we'd hoped this issue would have been put to rest with the settlement back in 2008, the court's decision now requires that it continue."

Here's an idea: BOK should pursue repayment from the investors in Great Plains Airlines, who stood to profit if the airline had succeeded. Or from the vendors who were paid for goods and services with money GPA borrowed from BOK. Or from the individuals and companies that bought GPA's transferable state tax credits. Of the city officials who -- it is claimed -- promised BOK that city would cover any default. If all of the above had an attack of conscience and each paid a bit, they could raise that money very quickly, I imagine.

KOTV's report includes extensive comments from City Councilor Rick Westcott:

"This loan should never have been made. There's nobody that's on the hook for this," said Tulsa City Councilor Rick Westcott....

"What is important is the Supreme Court has ruled that the City of Tulsa has no liability to the Bank of Oklahoma. And the Bank of Oklahoma has to give taxpayers back $7.1 million."...

And don't start looking for a property tax rebate check in the mail anytime soon. The money will likely go into an account to guard against future lawsuits.

"The $7.1 million could be used to pay off judgments in the future and not have to levy citizen's property taxes to pay for those small judgments," Westcott said.

Fox 23 seems to get a key point wrong in their brief report. (It's quite understandable.) Kathy Taylor did not say the settlement "was illegal and unfair to taxpayers because it was paid with property taxes." She and the City of Tulsa asked the district court to affirm that the settlement to which she agreed was lawful. The court action that she filed included the complaining taxpayers as defendants. Taylor was pursuing this action to protect herself against liability for treble damages as a result of the taxpayers' claim; Taylor did NOT agree with the taxpayers that her agreement to the settlement was unjust. (See sections 11 through 15 of the Supreme Court's decision.)

In today's Wall Street Journal's William McGurn explores Tulsa billionaire George Kaiser's motivations in his involvement in Solyndra. Some excerpts:

The George Kaiser Family Foundation in Tulsa, Okla., was the company's largest shareholder. The family foundation has attracted attention because it is set up as a "supporting organization" for the Tulsa Community Foundation. Supporting organizations provide donors with generous tax deductions while they are not required to give away the 5% of assets that, say, a private foundation must....

No doubt Mr. Kaiser's charitable giving has done some wonderful things for Tulsa. Unfortunately, when it came to a politically fashionable cause, Mr. Kaiser's concern for the taxpayer simply vanished. In its place was a much less appealing ethos, which he alluded to in the same Rotary speech where he spoke about "guilt."...

...As Mr. Kaiser appreciates, an oil man who denounces fossil fuels will be lionized even as he continues to make millions off them, in the same way that a billionaire such as Warren Buffet earns praise for calling for higher taxes. But if you are a businessman such as David and Charles Koch, and you use your wealth to try to preserve the economic freedom you believe will help others move up the ladder, you will soon find yourself branded as an enemy of the people.

"We're all familiar with the greedy businessman who pushes taxpayer subsidies to enrich himself," says Scott Walter, a former domestic policy adviser in the Bush administration who now writes for PhilanthropyDaily.com. "Solyndra tells us we might want to start paying more attention to the businessman who's already rich--but seeks to salve a guilty conscience by putting taxpayers on the hook for his pet causes."

(If you're not a subscriber to the Wall Street Journal, you can read McGurn's entire piece for free by entering the site via a Google search for the title, "Solyndra and a Billionaire's Guilt Trip.")

McGurn's last paragraph quotes Scott Walter's article on Philanthropy Daily, "The Other Solyndra Scandal," which is worth your attention. Walter goes deeper into the special nature of GKFF and the tax advantages of this arrangement vs. direct charitable giving or setting up a traditional foundation. Effectively, you can set aside money for charitable purposes and take the tax deduction now, but wait until much later to decide how to spend it, maintaining control over the money in the meantime. (Idle thought: If you needed the money at some future time, could you take it out? What would be the tax consequences? Penalties, or just taxable at the time you withdrew it?)

A couple of excerpts from Walker:

Kaiser explains that "there's never been more money shoved out of the government's door in world history and probably never will be again than in the last few months and the next 18 months, and our selfish, parochial goal is to get as much of it for Tulsa and Oklahoma as we possibly can."

Is this zealous grab for other people's money greed? The dollars at issue weren't voluntarily donated by generous fellow citizens, nor were they knowingly risked by venture capitalists gambling with their own money. No, the dollars Mr. Kaiser sought to get his "selfish" hands on were tax dollars that his fellow citizens were compelled to provide, supposedly for the common good....

Why isn't it greedy and improper when a billionaire with enormous charitable resources - $4 billion in the George Kaiser Family Foundation as of 2009 - manipulates tax dollars into a dubious hobbyhorse project of his? Especially when that hobbyhorse is a for-profit company in which the billionaire's foundation is the largest stockholder? And when the billionaire's foundation ends up, at bankruptcy time, ahead of the taxpayers in the line to recoup something from the cratered company's assets, even though federal law appears to make it illegal to put private investors ahead of taxpayers in such circumstances?

I am still trying to get my mind around the motivations and actions surrounding George Kaiser, GKFF, and TCF. Solyndra is just the latest episode in a long-running drama that includes -- on the negative side of the ledger -- Great Plains Airlines (and the taxpayers' ultimate payback of money we didn't owe to Kaiser's Bank of Oklahoma), the downtown baseball stadium (and the heavy-handed approach to its surrounding development), the mediocre candidates Kaiser has backed for public office in Tulsa, the county river tax, and -- on the positive side -- RiverParks trails improvements, supplemental funds for beautification for new public construction, financial support for the comprehensive plan process and the city government efficiency study, purchase and preservation of the Blair Mansion and grounds, support for the Tulsa Fab Lab, and financial support for countless worthy projects and programs.

It's a complex picture. I don't buy the idea that Kaiser is all about building his own wealth. I don't buy his explanation of his success as "dumb luck," and I don't think he does either. Some describe Kaiser as very hands-off when it comes to spending his money, and that he lets himself be driven by what the community wants, but that doesn't entirely square with the facts either. (And who has the standing to define what the community wants for him?) Even if his motivation is purely altruistic, his vision of the good may be entirely at odds with that of his intended beneficiaries. Potentially, he could be a kind of cultural imperialist, with Oklahoma as his mission field.

Leverage and control are two recurring themes. It's a commonplace in Tulsa that money from GKFF comes not with strings attached, but with chains.

Because of his connection to Solyndra, who George Kaiser is and what he wants is a matter of curiosity for the rest of the world. Because of his economic power and his focus on Tulsa, who George Kaiser is and what he wants is a matter of critical concern for Tulsans.