Why an initiative instead of a referendum

Recently Transparent Payson was asked “Why an initiative instead of a referendum.” That is both a simple and complex question. Trust us, a “referendum” would be easier to place on the ballot as the Town Code requires 15% of “qualified electors” for a referendum versus 15% of “registered voters” for an initiative. A significant difference.

Let’s start with the easy answer. We are attempting to modify current Town Code to prevent an action. We are “initiating” a change. We are not “reforming” a prior action.

Now, for the bit more complex concerns. First, by our current charter, and Section 527 of the Tax Code, Transparent Payson is limited to advocating, acting on behalf of, and ultimately defending the initiatives once they pass. We currently have no standing to advocate on behalf of a referendum. We simply cannot do that. Further as there has been no Town action taken beyond a current study, there is nothing to “reform.”

Second, assuming we are not successful in our efforts to place the initiative on the ballot via our signature drive, or assuming the initiative does not win the popular vote once it is placed on the ballot, the town will be free to proceed with any agreement that the initiatives address. Taken together, the initiatives preclude the long term lease of public land and debt over $1,000,000.00. Should the Town Council proceed with either, a referendum could be filed. Such a filing might prove to be very problematic.

Assume for a moment the Council enters into multi-million dollar, multi-party agreement and a referendum is started in response. A “special election” to vote on the “referendum” could be held at the Town’s discretion. That may not occur. The referendum would then roll over to the next election cycle. About two years away. Meanwhile, the contract would move forward with all parties. Citizens directing the Town to cancel the agreement will not cancel the agreement or void the contract. This differs from a referendum involving only the Town and citizens such as a tax issue, or other issue where there are only two groups; the Town and Citizens. Under a finance or lease agreement, the outside party, such as developer or vendor, would have standing under the contract.

Should the Town be forced via referendum to cancel the contract, it would likely subject the Town to a breach of contract claim by any other parties to the contract. The other parties would then have grounds to file a suit. The suit would include all liquidated damages under the contract and attorney’s fees as the matter flows from a contract issue. Additionally, the suit would likely allege unliquidated damages. Typically this includes the present value of the lost profits for the plaintiff(s) caused by the breach of contract. That could be a significant sum, far exceeding the total contract value, depending on the projected life and revenue of the project. Additionally, any private development contingent on the public development would be able to file a suit for damages. Essentially, unless Transparent Payson can prevent the action, via an initiative, AND should the Town commit to a contract, a referendum could force the Town into bankruptcy under a breach of contract claim. The Town would lose both the benefit of the project and the money for the project PLUS anticipated profits from the project. A very, very, bad deal.

Our goal at Transparent Payson is to prevent potential financial missteps by the Town via citizen oversight. We would anticipate that should the Town enter into a bad agreement, a referendum action could cause significant harm to the Town. That is NOT our goal. Therefore Transparent Payson would have no desire to pursue, and would not participate in advocating, any referendum action that could result in a potential breach of contract claim being made against the Town.

It is imperative that citizens prevent such a contract from occurring as the costs to extricate the Town from a bad deal could simply be too great.

Your money. Your land. Your VOTE.