Prop 218: So Do We Do It Or Not?

... one meter in town that works

The last time Prop 218 came up, somewhere in 2010, I stuck my neck way out. This was after I had stuck my neck out to run for City Council, and before I did the same thing for a lawsuit which, while it did have a whole lot going on, got waylaid on a few technicalities that made going forward impossible.

Obviously this was a shame. During the 2010 water rate increase "process" the city had quite apparently violated the rights of the ratepayers in Sierra Madre, and this fully deserved to be exposed in a Court of Law. An apology was in order, and still is for that matter. I wanted badly to get that for the people here, plus it would have made quite a blog post as well. Add that to the $1 in damages I was seeking, and what could have been sweeter?

However, things didn't quite work out as planned, and after that little incident I swore to anyone who cared to listen that my crash test dummy career had now come to an end. From that moment on I'd concentrate on this blog alone. Which, I must tell you, I have a lot of fun doing. The best people seem to enjoy it, while the worst squirm. What more can anyone ask of life?

But today everything has to be looked at all over again. We live in a city run by a small handful of largely inept and clearly selfish people whose only ideas for governing involve the constant acquisition of more of our money. Even the devastating Measure U loss sustained by City Hall in April of 2012 has hardly stopped them. Apparently the wishes of the voters don't mean much to this City's government, and they will be back in April of 2014 with a do-over UUT ballot initiative. Along with a whole new set of consultant written tall tales to tell us.

Over the past few years we have also seen increases in the cost of just about every permit and license imaginable, with fees going up across the board as well. It is only logical that water rates would be next on their list as City Hall had left no other stone unturned in its mania for more of our money.

The so-called process to raise our water rates for the third time in four years is now underway. An expensive consultant has been hired, and a series of 5 informational City run gatherings to peddle this latest water rate increase to the public put into place.

But our habitual downtown beggars are hardly perfect. Last Wednesday's water rate infomercial session, taped at City Hall before a live though apparently unwitting audience, was revealing in ways that City Staff apparently did not anticipate. The one issue staff kept going back to that evening, over and over again, was the City's $20 million in debt. Much of which is in the form of aging water bonds.

And what was their message? That this debt is actually a good thing, and should be taken as nothing more than the cost of doing business. Quite reassuring, particularly if you don't know much. But when the method for repaying the largest of these water bonds is through interest only payments, is it actually good business? Perhaps not.

Obviously that aspect was not discussed last Wednesday evening. Neither before that studio audience or for the folks at home.

This interest only method of repayment on our 2003 water bonds has exponentially increased costs to the taxpayers. That amount going from $6,750,000 at inception to $14,925,486 in 2034. We are talking about over $8,000,000 dollars in interest here. An almost inconceivable amount of money for a city of less than 11,000 people to be paying.

Here is that unhappy story from the City's own website:

Water Revenue Parity Bonds, Series 2003
 Purpose: to fund improvements and betterments within the Water Infrastructure
 Issue Date: September 1, 2003
 Maturity Date: November 1, 2034
 Original Principal Amount: $6,750,000
 July 1, 2011 Principal Outstanding: $6,750,000
 Interest Rate: 5.00% - 5.01%
 Funding Source: fees for water services
Total amount due today with interest included: $11,654,578
$6,750,000 at inception becomes $14,925,486 once paid off in 2034