The City of Sioux Falls reveals their lies

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Today at the SF city council informational meeting there was a presentation of the arterial street plans for 2010-11. As South DaCola reported this week, the developers haven’t put in their fair share. Councilor Staggers questions the city department head about it, and that person reveals that platting fees have brought in $258,000 to date and the .08 cent tax increase has brought in “around $2.09 million”. Staggers then asks who will be paying for the project if the platting fees are not matching the taxpayer’s contribution. (paraphrasing) “I thought the developers were going to share 50% of the cost, that’s what we were told,” Staggers. The city official responds, (paraphrasing) “NO, we did not say that, that was simply a formula we used to get to the $10 million dollar number.”

A formula? More like a load of F’ing Crap!

WE WERE LIED TO in order to RAISE OUR TAXES, AND YES, WE WILL BE PAYING FOR A MAJORITY OF THESE ROADS.



17 comments ↓

#1 Scott on 10.19.09 at 6:57 pm

In other words, city officials can just make up any numbers they want to create the budgeted amount they desire. Incredible.

#2 l3wis on 10.19.09 at 10:47 pm

I have to admit, I have felt many emotions when I have heard city department heads say stuff, but when he said, “It was just a formula” I was dumbfounded. Over an hour of testimony from the developers saying they would pay their fair share and a taxpayer funded website saying they would too, and it comes down to “a formula” what a joke. Someone should go to jail.

#3 John2 on 10.20.09 at 8:48 am

Repeat after me:
“Development NEVER pays for itself.”

Development is lucrative for developers and their pals, the banksters, BECAUSE it is so profitable. Development is lavishly profitable BECAUSE it socializes its costs onto taxpayers, while privatizing profits.

#4 Sy on 10.20.09 at 11:14 am

John2:

“Development is lucrative for developers and their pals, the banksters, BECAUSE it is so profitable.”

This makes no sense at all. Conversely, selling buggy whips in not lucrative because it is so unprofitable? Also, do you consider your banker, grocer, dentist and/or doctor as enemies since they dare make a profit off of you?

“Development is lavishly profitable BECAUSE it socializes its costs onto taxpayers, while privatizing profits.”

So, profits should be public domain? You must be thrilled with the current Admin.

Also, who do you suppose has a higher overal tax burden; you or Don Dunham? and how does DD manage to shift his by-far largest cost: the price of ground, onto you the taxpayer?

Take your time.

#5 John2 on 10.20.09 at 2:45 pm

Sy: reasonable profits, not lavish profits. Reading comprehension. The grocer’s profit margin is 1.5 to 3%. The banksters make money on a 5% mortgage; credit cards, development, etc., should have as tight a profit margin as grocers and mortgages – not 10, 25 or 300% profit margin.

Profits should not be in the public domain; costs should remain privatized — nice twist on my words. Reading comprehension.

Warren Buffet pays a lower tax rate than does his receptionist; the receptionist has the higher real, relative tax burden. Reading comprehension. (Are you implying we should ‘feel sorry for millionaires’?)

Developers socialize their costs for development when they don’t develop and pay for the streets, curb and gutter, water, sewer, increased costs for street repair, snow removal, traffic control policing, fire protection, etc.

#6 Costner on 10.20.09 at 3:11 pm

I know it is fun to pick on developers, but does anyone actually think for a second it is the developers themselves who would pay for streets, curb and gutter, water etc, etc?

If they were forced to pay 100% of those costs, then 100% of those costs would be in turn passed onto the people who buy the lots or the homes or the strip malls. So now the cost of home ownership skyrockets which in turn results in fewer homes being sold due to the prices being out of reach of a large percentage of the populace.

How does this help stimulate growth and/or the economy again?

By the way John2, if you think grocers are only making 1.5 – 3% profit margin you would just love to meet my former neighbor who was the owner of one of the three grocery stores in a town of just shy of 2,500 people. He borrowed money from his father to start the business in the late 60s (1969 if memory serves) because he didn’t have any money of his own. By the early 90s he retired as a man in his low 50s with seven figures in the bank and zero debt. He raised four kids and put them all through college, and he now owns three different properties including a nice little retirement condo in Florida.

If you think he did all that on a max of 3% margins… I’ve got some nice investment opportunities for you.

#7 Sy on 10.20.09 at 8:29 pm

John2:

“reasonable profits, not lavish profits. Reading comprehension. The grocer’s profit margin is 1.5 to 3%.”

You’re correct on one thing, it is exceptionally difficult to comprehend being lectured in margins who’s as clueless as you. That’s lower than Walmart’s margins, so your mythical grocer is out of business in about 90 days max.

John2:

“The banksters make money on a 5% mortgage; credit cards, development, etc., should have as tight a profit margin as grocers and mortgages – not 10, 25 or 300% profit margin.”

Since you know squat about a grocer’s margin, there’s no point trying to explain how a financial institution operates. Many of the folks who made it possible for you to be idiotic online make well over 300% on certain products and/or services.

If folks of your mindset get control of an Economy and dictate how much people can mark up anything any everything, the results are clear throughout history: you tend to move into the third world rather abruptly and permanently.

John2:

“Warren Buffet pays a lower tax rate than does his receptionist;”

Nice soundbyte pukeback. That’s only the case because Buffett pays himself $100K, and he pays his staff well because, well they aren’t billionaires. Buffett has gotten to where he is precisely by hammering down his companies costs (including tax liabilites) in order to reinvest the cash it yields. (again, in order to minimize his tax exposure) He prefers to pay the lower capital gains rate as opposed to income taxes. Next time you share a plane with him, ask him how he’d feel about a capital gains tax rate of 30 or more % and you’ll find out how many obscenities he can string together in a sentance.

John2:

“Developers socialize their costs for development when they don’t develop and pay for the streets, curb and gutter, water, sewer, increased costs for street repair, snow removal, traffic control policing, fire protection, etc.”

Are you suggesting that Don Dunham and/or his company(s) pay no sales, property, licensing or excise taxes? Next time you share a plane with him, ask him how he pulls that off.

#8 Ghost of Dude on 10.20.09 at 8:54 pm

If you think he did all that on a max of 3% margins… I’ve got some nice investment opportunities for you.

That’s actually a pretty accurate figure. Grocers thrive on volume (everybody has to eat), not high profit margins.

#9 John2 on 10.21.09 at 6:19 am

Sy, here’s one source of grocer profit margins. http://biz.yahoo.com/p/734conameu.html What voodoo accounting do you use?

Sy, you don’t get it regarding your grocer neighbor. It’s not how much one makes; it’s how much one,or how little, one spends that allows one to save.

“If folks of your mindset get control of an Economy and dictate how much people can mark up anything any everything, the results are clear throughout history:” Unfortunately the opposite is true. When the banksters control an economy the top 1% own 90% of its assets. When folks like Aryn Rand-worshipping Alan Greedspan unregulate an economy the result is the near-depression, 10% (and rising) unemployment, and necessitates trillions in socialization of costs (bailouts). Even S Forbes said government policy mistakes were the source of the economic crisis.

Sy: developers NEVER pay all the costs for development, regardless of taxes they pay. (By the way one half of US corporations pay no taxes so save the Kleenex.) A classic example is the development in the Sioux Falls flood plains. Instead of going to the taxpayers to socialize costs for ditches, drains, dikes – all those costs should be bore by the developers, banksters, and personally by the political hacks who approved flood plain development. Sy, are you against personal responsibility and accountability?

#10 l3wis on 10.21.09 at 8:05 am

Costner-

I agree, it is no secret that developers pass those costs on, but they also must be competitive. My problem is that the city and developers lied to us. Why not just tell us the truth from the beginning? Which would have been;

“A majority of the arterial road costs will be paid out of the Capital fund, which will receive additional funds from the .08% tax increase and platting fees.”

How hard is that? Why launch a website and a silly formula that does not mean shit? And why are we building NEW roads when we are $137 million backlogged on road maintenance and infrastructure?

Silly.

#11 Sy on 10.21.09 at 10:56 am

John2:

“Unfortunately the opposite is true.”

Prove it, show me a socialized (ie Govt. run) Economy that has thrived in the last 50 years. By thrived I mean a comparable standard of living increase for it’s populace (not ruling class) similar or better than what our Economy has done.

John2:

“When the banksters control an economy the top 1% own 90% of its assets. When folks like Aryn Rand-worshipping Alan Greedspan unregulate an economy the result is the near-depression, 10% (and rising) unemployment, and necessitates trillions in socialization of costs (bailouts).”

No one segment controls the Economy, if “banksters” actually did control the Economy you would never see one fail. AG was correct when he forecast the housing bubble burst, who’s pinprick was due to the collapse of Fannie Mae/Freddie Mac. Both of which were deregulated (by Congress, not AG) to the degree where their core missions changed from helping low income or otherwise unqualified folks into a home into a gargantuan sellers & re-sellers of risky loans to people who couldn’t repay them. Those foreclosures are the “toxic assets” that have drug down the entire financial system.

John2:

“Even S Forbes said government policy mistakes were the source of the economic crisis.”

He’s correct, especially current fiscal policies advocated by the “Hope & Change” crowd. You cannot tax & spend your way to prosperity as Rand, AG, Reagan & Forbes all agree on. Under the last part of Clinton’s admin, we did the opposite and it worked wonders.

#12 Costner on 10.21.09 at 11:17 am

John2: “Sy, you don’t get it regarding your grocer neighbor. It’s not how much one makes; it’s how much one,or how little, one spends that allows one to save.”

First of all I was the one to post the story about my neighbor – it wasn’t Sy.

Second, in the mid 80s I knew my neighbor was pulling in over $150k a year from his store. Although he was/is a frugal guy – that is still a hell of a lot of money for a town of 2500, especially when he was sharing the market with two other grocery stores. Now, admittedly he was the most successful of the three, but still…he didn’t do it on 3% margins.

The numbers you are quoting are from publicly traded companies which would be after tax net profits. That is quite a bit different than privately held grocery stores and I don’t think your comparison is accurate.

Case in point, if you use your same source and look up banks you find a 1.3% average profit margin… less than those grocers. If you look up real estate development you will find the net profit margin to be -16.1%. Yes you read that correctly – it is a negative.

So while fun to accuse developers of making obscene profits, you also need to realize they take huge losses when the market turns.

I guess I just don’t support caps on profits or regulation to the point free industry is prevented from flourishing. In the vast majority of cases free markets will balance themselves because it doesn’t take too long before people see opportunities where profits are made, and the market will return to a balance.

That isn’t to say we shouldn’t police things and that we shouldn’t have government oversight, but when we start talking about limiting profits by industry sector… well I just don’t see how that ends well. In the short term that might seem like a great idea, but in the long term profit is what drives our economy and our nation. Take away the profit and you take away the incentive to continue.

#13 Plaintiff Guy on 10.21.09 at 12:07 pm

Was it First Premier that charged 79% interest? This morning one card company announced there would be a fee if you didn’t charge a certain amount each month. Is 5% on every purchase not enough for these guys?

#14 Ghost of Dude on 10.21.09 at 12:45 pm

The banks don’t make 5% on every purchase. Visa, Mastercard, Amex, and Discover do. Several different companies each take a small cut of that 5% for doing various things with the transaction.
The bank makes money from the interest and any other fees a cardholder racks up.

#15 Costner on 10.21.09 at 1:12 pm

Actaully the credit card companies only make about 2%, and then they have to subtract their losses from that percentage. If someone has fraudulant charges racked up on their card, the credit card company is the one who ends up paying – so they clearly have a substantial risk at stake.

The issuing bank (as GoD said) make their profit from interest and fees. They don’t get a percentage of sales.

If there is no profit to be made from a consumer, banks won’t issue cards to them. Therefore who in their right mind would issue cards to those with less than perfect credit? There is far too much risk involved if you can’t offset that risk with some reward (profit).

I’m no fan of First Premier, but it seems clear that they offer credit cards to those who otherwise would be unable to obtain them. So in some cases they allow people to build their credit and hopefully those people are wise enough to get a credit card with a lower interest rate and/or reduced fees as soon as their credit rating would allow them to. If they carry a balance on a card with a 79.9% interest rate (or even one with a 19.9% interest rate) they are clearly too stupid to be trusted with money in the first place.

#16 Sy on 10.21.09 at 2:32 pm

GoD:

“That’s actually a pretty accurate figure. Grocers thrive on volume (everybody has to eat), not high profit margins.”

Like Costner said, depends on which margin you are looking at. I think our economically challenged friend thinks if his ever-so-noble Grocer buys a can of soup for a $1 he turns around and sells it at $1.03 or $1.05. They do so because everyone has to eat and their conscience precludes them from seeking a higher and more ill-gotten return.

The truth is the most succcesful grocery firms like Kroger or Whole Foods run 30% or more on a Gross margin. Many will mark up their brand name stuff higher so it drives business to the private label item. Some do it the other way around. Any business with 10 thousand plus SKU’s has loss leaders alongside their cash cows. I guarantee you there’s items in the store that are marked up higher than First Premier’s card. They just don’t sell as many of them, and the few they do sell they clean up on. If the store had a shoplifting rate comaparable to FP’s default rate, most of (if not all) their stuff would be priced accordingly.

EBITA, on the other hand, is usually in that 3%-6% range, as it is in many industries from banking to autos to construction to manufacturing.

#17 Plaintiff Guy on 10.22.09 at 7:57 am

Good explanation and clarity here. The media sensationalizes for readers/viewers. Perhaps, much of what seems a ripoff is just good business that guarrantees profitability. Explaining these methods to Average Joe is hard if not impossible. He would rather blame them than take a closer look at himself.

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