 |
| .Boom. |
And for the record there is no city in the entire State of California with a 12% utility tax rate. Not a single one. At our current 10% rate, coupled with the wide swathe of utility tax categories it covers, we already lead the state as its most utility taxed citizens. We are the utility tax Kings and Queens of the Golden State. To take us to 12% as Nancy Walsh has proposed is unfathomable. You really have to wonder what she is thinking.
I'd like to highlight an interesting reader comment from yesterday. I think it encapsulates the concerns many here in Sierra Madre are feeling about the combined water/sewer rate and utility tax increases we are facing.
I trust councilman Koerber to say the truth, so I'm in a bind. I distrust the city staff and have heard many different residents talk about what a scam the water department was, with money flowing in and out of accounts. Plus I know Inman is not qualified for his job, and despite the claims that he was warning everyone for years, he obviously failed to lead councils to the correct conclusions, or my coffee would be made with Sierra Madre water rather than Arrowhead. So, if the city council wants residents such as myself not to protest the water rate hike, they need to take the UUT off the table, let it sunset like it's supposed to, and find other ways to work within the budget.
The reader who posted this comment makes an important point. Perhaps the water rate increase is justified, or at least lets just say it is for the sake of this argument. But why does it also have to be coupled with a utility tax increase is well? Why both? Personally my gut instinct tells me the water rate increase needs to be fought. Certain people whose opinions I respect tell me otherwise.
And quite honestly I think it can be beat. People are fed up with this City's constant demands for more and more of their money.
So here is the question. As the reader who posted the above comment also asks, am I also somehow expected to go for a utility tax extension at our current state-leading rate of 10%? Or even support an increase to 12%? With an extremely large water rate increase to go along with it?
It truly is an awful lot to ask of people. The water and sewer rate increases alone are plenty bad enough. Throw in what would at the very least be an extension to what was supposed to be a temporary jumbo utility tax rate increase, and we truly are in uncharted territory.
The residents of this town are going to have to say "no" to something. That is, unless they are the easiest tax chumps in the state. So here's the choice. Water and sewer rate increases, or UUT rates that are the highest in the State of California. Take your pick.
And yes, you can say "no" to both. You hardly need me to tell you that. We're not in the practice of selling increases for anything around here.
One of the bigger events of Tuesday evening was a revealing of the hitherto ignored financial effects of our disastrous 2003 water bonds. Councilmember Koerber did the honors, and it really was a stunning indictment of how this City's financial mess has led us to this unhappy moment in Sierra Madre history. Here is how we wrote it up yesterday:
The other elephant in the room was this City's massive water bond debt. Chris Koerber laid that all out this way. Debt servicing is a $1 million dollar cash flow problem. Currently the water system is budgeted (2013 - 2014) to have $3.637 million in revenues and $3,428 million in maintenance and operations expenses. Which leaves only $209,000 to service $995,000 in just the current bond debt obligations.
What was the thinking on the 2003 $6,750,000 bond issue? One that is interest only with 5.5% interest until the year 2020? Not $1 has been paid on the principal has been paid on the 2003 $6.75 million dollar bond issue. Yet we have already paid $3,270,909 in interest! Prior Councils did not raise rates adequately to deal with this. It is time for the City Council to fix this without incurring more debt. It pains me to support such a large increase, but it needs to be done.
A little object lesson on how a $6.75 million bond issue was turned into nearly $15 million in debt. A sorry legacy that has put this City into the financially disastrous mess it is today.
So much hinges on that one event. Yet there has been so little discussion on where these water bonds came from, who did it, what the purpose was, and why the City chose to only pay the interest on them through 2020. A financial crazy train that defies all normal governmental logic, and is costing the taxpayers millions.
It is as if we had somehow been forbidden to talk about this topic. That is, at least we were up until Tuesday evening. This City really does need a hearing on this topic. If these bonds are at the heart of our financial problems, and one of the preeminent reasons why we are being asked to cough up even more money, and in two distinctly different ways, is it too much to ask that the matter be discussed in a public forum?
Why all the secrecy? We're big people. We can take it.
Let me start the ball rolling. Here is my theory. I think there is a lot to it, but maybe some people will disagree. Which is fine. I would enjoy hearing their explanations for what has become the black hole of Sierra Madre's debt crisis. Let's leave nothing hidden in our search for the truth.
The 2003 water bonds were part of a money deal done with the Feds to build a lot of new water infrastructure in town. A ton of money was raised, and quite a few water department related things were built. My neighbor down the street is a water tank, and it was built with this money.
Maybe a lot of this was necessary, and perhaps some of it was not. And perhaps there was an agenda tied to all of this that people weren't really clued in about.
What was the big development event here in the middle of the last decade? The attempt by certain interests both here in town and elsewhere to build something called the Downtown Specific Plan. This wide swathe of mixed use development would have completely changed the nature of our quaint downtown area, transforming it into the kinds of failed high density and condo packed development we can find today in places like Rancho Cucamonga, or bankrupt San Bernardino.
The same City Council folks that did the 2003 water bond deal were also some of the biggest proponents of the Downtown Specific Plan.
The opposition to this predatory development scam was so great that the people of Sierra Madre ended up going to the polls to vote into existence something called Measure V, which shut the DSP down.
However, had it been allowed to go forward the City would have needed to radically upgrade Sierra Madre's water infrastructure. All of those new DSP condos and mixed-use knickknack shops would have required a lot of water. And here's the deal. That water infrastructure part was already built and ready to go, that was all a part of the plan. Get the water done first. It was mostly in place right around the time the Downtown Specific Plan was scheduled to become Sierra Madre's next development reality.
The 2003 water bonds built that DSP water infrastructure.
All of which means that our current bond debt driven financial mess, which is at the heart of the water department's possibly fatal cash flow crisis, is the result of a failed development scheme. And we are now being asked to pay for the consequences of what was a very bad idea pushed by some very foolish and greedy people.
Several of whom still seem to have a lot of influence in this town, and apparently believe it is our obligation to pay to clean up their mess.
That is my theory. If you have a better one I'd love to hear it.
http://sierramadretattler.blogspot.com