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Of course, it would help if Sierra Madre actually had a more forthcoming adjudicated newspaper. According to this weekend's Mountain Views News, and despite much evidence to the contrary, everything is getting better in Sierra Madre. The article bases its claims on campaign press releases put out by John Capoccia and John Harabedian. Both of whom take full credit for what are essentially fantasy claims of increased City Hall financial viability.
Here is how this one went.
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Softball journalism at its best. Apparently what the City of Sierra Madre can look forward to this political season is something along the lines of a coronation. And as is usually the case with royal society, you won't get much of a chance to question the motives of those who will continue to rule no matter what the verdict at the polls.
The real situation is obviously quite different from what these two candidates are so far presenting to the public. Here is how the actual pension liability numbers looked in an article we posted here on December 8 (link) called "The Reckoning: Is Sierra Madre Close To Insolvency?"
Sierra Madre has a fiscal year ending June 30. That means that under Governmental Accounting Standards Board No. 68, Sierra Madre will be required this year (for the first time) to record a “net pension liability” on its balance sheet. The liability is the difference between the total pension liability and the value of the assets that have been set aside to pay benefits to current employees, retirees and their beneficiaries.
It also requires the recording of interest on the liability. Sierra Madre’s financial statements are typically completed by mid-January so it is likely that the amount of the liability has already been calculated. It could be more than $9 million.
For June 30, 2014, Sierra Madre had a total fund balance in its governmental funds of $11,131,838. So if the adjustment is large enough it’s possible that by recording this liability for this fiscal year (the first year it is required), Sierra Madre will be nearly insolvent in its governmental funds.
The city would still own approximately $200 million in hard assets like roads and sewers / etc, but you can’t pay a pension with asphalt.
So somebody should call the city and find out what the GASB No. 68 adjustment is and if it is large enough you can be the first to report Sierra Madre is nearing insolvency ... something that will not be revealed until January ... after the filing period for ballot measures has closed.
Again, I doubt either of the Two Johns, Harabedian or Capoccia, will be talking about "net pension liability" too much. While they certainly will be pushing the UUT increase ballot measure with everything they have, the real reason for it, CalPERS obligations to the tune of $9 million dollars, will not likely play a part in any discussions they'll be having.
Why is that? Because they don't want you to know too much about the actual reasons for the 10% utility tax ballot initiative they're pushing. It isn't a vote getter. As the above blurb in the MVN states, the Two Johns are addressing financial stability, the needs of badly neglected city infrastructure and securing a long term water supply.
However, none of those have very much to do with the 10% UUT ballot measure. Despite the inferences, water and infrastructure upgrades will not be receiving any significant increased funding from the UUT initiative. Instead that money will be going to CalPERS.
But do not tell anybody.
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