Monday, March 9, 2009

Sierra Madre Voted For The UUT Tax Hike Because We Were Supposedly Going Broke. It Now Turns Out That Might Not Have Been The Case.

At tomorrow night's City Council meeting a rather shocking announcement will be made. Despite years of dire warnings about the parlous state of our fiscal affairs, it turns out that the truth is actually something quite different. Through 2007 Sierra Madre's finances are $1,036,000 to the good. In other words, we had a nice little surplus that year. How is it that I know about this unexpected news? I have here in my well manicured hands a copy of the March 10, 2009 City Council Agenda Packet. Think of what you're about to read as being a 43 hour Sierra Madre Tattler Exclusive.

From the City of Sierra Madre Agenda Report: "Management has concurred that information presented in the basic financial statement is a true reflection of the City records as of June 30, 2007. The fund balances represent the records at the close of this period. In looking at page 7 of the report, the General Fund has an increase in fund balance of $1,036,795 (less $200,000 for interest allocation). The total General Fund reserves as of June 30, 2007 are $3,408,285 (less $200,000 for interest allocation ...)

So here's the deal. While it is good that the City is not broke, there is a big problem that needs to be discussed. I'm going to break this one down slow and easy, because we are talking about a very serious situation, a breach in the public trust that is almost unprecedented. You remember that during our last election there was something called Measure U on the ballot, right? This measure, if passed (which it was, overwhelmingly, and in spite of my vociferous and often stated objections), would raise our User Utility Taxes (UUT) substantially. And why did taxes supposedly have to be raised? Because we were supposedly well on our way to fiscal collapse. And you heard this everywhere. So-called "responsible" officials trumpeted it, the Police Department's union campaigned for it, our mailboxes were stuffed full of cloying junk mail proclaiming it, and hundreds of trusting people put yard signs out announcing their support for Measure U, the "common sense solution" to our fiscal problems.

Here's a passage from Bill Coburn's April 2008 editorial supporting the tax hike, typical of the addled groupthink that carried this debate:

"The City's costs are going up, and its revenue is not. Somehow, more money has to be found to continue to fund City services. The POA has signed a memorandum of understanding that will increase their salary. The City has started paramedic services, the last City in L.A. County to provide this essential service for its residents ... But there's no money to pay for that service after 2009, since it was funded for only two years when started ... And there's no money to pay the POA salary increase. So the Ad Hoc Finance Committee, which reviewed the City's budget and found that there was no way to fund these items without essentially eliminating all other City services such as Library and the Community and Personnel Services Dept., recommended this UUT increase ..."

Bill thought we were going broke because he bought into the official line. John Buchanan, pretty much the author of that official line, was interviewed by his fanzine, the Mountain Views "Observer," in October of 2007. He had this erroneous information to share with the people of Sierra Madre:

"What we also know is that at the end of two years current revenue streams will not cover the cost of existing general fund services. Revenue increases do not keep pace with the cost of delivering existing services."

So how can it be that such esteemed local gents as these two could be so mistaken on this matter? How is it that Mayor Enid Joffe, along with former Mayor John Buchanan, individuals who should have had at least some understanding of City budgetary finances, could have been so completely wrong? So wrong that they actually helped engineer a tax hike based on City Hall provided junk information, information that led so many to believe that the city was sinking into financial ruin?

The answer lies in something that I wrote about on The Foothills Cities blog on several occasions in the run up to the April 2008 elections. At the time that the Ad Hoc Finance Committee was deliberating about city finances, this town was in serious default on a very important Sacramento obligation. In the years 2002-03, 2003-04, 2004-05, and 2006-07, the City of Sierra Madre, despite very specifically worded State of California laws, had not supplied the financial audits on its budgets to the State Comptrollers Office. For each of the first three years Sierra Madre was fined $5,000 for this lapse, with $10,000 being the damage for the year 2006-07. In other words, and I think this is safe to assume, Sierra Madre did not have its books in order, and anything that the trusting souls on the Ad Hoc Finance Committee were being fed by City Hall was based on guesswork, or worse. From the administration of Mayor Enid Joffe back to whatever was running the place in 2002, Sierra Madre's finances were being handled at a hillbilly level of competence. Only 3 incorporated townships in the entire State of California had defaulted on this obligation to the Comptroller's Office in Sacramento four years in a row, with the other two having an average per capita income of under $30,000 per year.

And this is what Mayors John Buchanan and Enid Joffe based their call for a tax increase upon. Information proven by these now completed audits to have been utterly without merit.

MaryAnn MacGillivray, along with Don Watts and Kurt Zimmerman, made the need to clean up the auditing process a top priority when they assumed control of our City government last year. And the results of that hard work are now available for all to see. But these results are shocking. They tell the tale of a city once so blind to its true fiscal condition that its former so-called leadership actually believed it had to coerce the voters of this town into approving a tax hike. One that, as it now turns out, we never actually needed.

I wanted to speak with a city official before releasing this article, and Mayor Kurt Zimmerman was kind enough to not only share his thoughts, but to be frank about the City's predicament. He admits that this is very discouraging because as a community we were voting on a UUT tax hike when the audits were not done. Audits that should have been completed by previous City administrations, but who somehow chose to not honor this extremely important obligation to both the State of California and the taxpayers of this town.

You can only wonder what it is that these people found to be more important.

The encouraging news is that we are actually in good financial shape. And while the police pay increase and paramedic salary costs (among other things) are chewing up a significant part of these newly revealed surpluses, at least we are living within our means. With no tax hike needed.

I asked Mayor Zimmerman about the User Utility Tax and Measure U. What becomes of that? Kurt's answer was clear and simple. "We need to consider getting rid of it."

Kurt pointed something out to me that I want to share here. In a handout from a couple of years back entitled "Six Mayors Say 'No!' Do Not Sign The 2-30-13 Petition," local comedian Glenn Lambdin had this to say. "Initiative 2-30-13, no matter how its intent is disguised, will break the back and the bank of Sierra Madre's struggling economy. We're struggling to pay for our roads, other infrastructure projects, our new Paramedic Program, police library, Senior Center, and Youth Center, etc, etc, etc ..." Strange that the argument against Measure V sounded so very similar to the arguments favoring Measure U. With both being based on financial data now proven to be absolutely false.


  1. Sir Eric, congratulations on a scoop and congratulations on clear thinking back when there wasn't much going around. I, like you, have been very concerned about the complete failure of the City to comply with financial disclosure and reporting laws and why people bought the baloney is beyond me. Have you ever heard of the government lying to you? How about just being wrong? In any event, all I can say is revoke that tax, use the money we have wisely and never again make a decision without full information. I am so glad all this stuff is getting revealed finally. This is just another example of the completely dismal quality of leadership the City had for the past 8 years. Pathetic.

  2. p.s. Now there's no longer a reason not to send the Fire Department to proper training! We can upgrade our fire department, hire people really qualified for the jobs--why not start with public works? Unbelievable but not really a surprise to some of us who couldn't see how the finances were working.

    The last two city councils are like the bad employee who goes on vacation. While he's gone, the employer learns that they've been doing nothing, didn't know how to do their job and in fact finds out that they've been completely misleading about their job performance. That's what we're facing here.

  3. And while we're excoriating the City Council, who was the staff that went along with--or should I say engineered this? What kind of brain death or abject lack of conscience were they laboring under?
    I'd say we should use some of this surplus and even the tax to fight the Cong Church over the other stuff the former Council allowed to happen--complete derogation of the City planning law. Because if the Cong Church's building violates Measure V, it surely violates the General Plan. But we knew that, didn't we?

  4. Sir Eric! This is shocking news! But it all makes sense now. The corrupt years of Bart Doyle's puppet councilmembers is now exposed.
    That UUT was very similar to the Measure F that the Torres, Stockley, Joffe, Buchanan council all instigated and campaigned for.
    Enid and others went door to door. They had a lot of money behind promoting it. Same money who supported No on V....???? I think so.
    Thanks to two prominent Sierra Madre citizens who at their own expense sent a mailer out the weekend before the election telling folks the truth about Measure FU, oops, I mean Measure was defeated by the voters!
    I know Mayor Zimmerman, Councilman Watts and Mayor Pro-tem MacGillivray will do the right thing for us all. John Buchanan and Joe Mosca?
    For once pick up your b***s and do the right thing for the residents, and abandon your links with the BIA and the CAR, just say No to the "advice" of Bart Doyle, and help, Kurt, Don and MaryAnn right this horrific error.
    This crucial issue and the crucial issue of the Cong church violating our city laws must take priority over all other minor issues that can wait.
    Thanks, Sir Eric for telling us the truth, it's not pleasant, and we are all worried about financial issues, but we needed to know.
    God willing, this will not happen again in Sierra Madre. Sierra Madre will survive the current depression. Thank God we have good people protecting our town. The TRUTH will set us free.
    Thanks, Kurt.
    Thanks Don, Thanks, MaryAnn.
    Thanks poster Roia, It's obvious you were one of the very few in town who actually could see we were being had by the dirts.

  5. To steal a phrase, Buchanan and his ilk are little more than Mayberry Machiavellis. The small town hustlers are now at sundown time. Unbelievable. A complete vindication for anyone who ever believed these guys were incompetent windbags. I can't wait for tomorrow night.

  6. The UTT has a provision which states that it is up to the council whether to increase the tax or not. The council should seriously consider returning to the previous tax base and exclude all the new taxes on other "utilities" They should not collect more money than is actually needed.

  7. I wonder if John's will inflate another hot air balloon Tuesday night with all the hot topics on the agenda. Get there early for a good seat.

  8. I agree with Pasta,my utility bill was high last month,including a stiff amount to the city. It's more than I can afford right now.
    No one needs to be paying more than they have to in this economic enviornment.

  9. Measure U needs to be invalidated. It was based on bad information. Zimmerman is right. It needs to go.

  10. Why didn't the Mountain Wilson (ex) Observer break this news? Oh thats right, it stopped being a newspaper and become a fluff piece after KD left.

    If the city were paying JB and JM by the word at Council meetings, we'd owe them $ 170K in salary.

    Dead Eye Dasterdly Bart Doyle strikes again.

  11. I'm speechless. Our tax money is going
    to fund the madness of idiots who can't
    even count. Its not even noon and I need
    a drink.

  12. Kurt, Don and MaryAnn did demand the audits.
    They would not have been uncovered otherwise.
    The news is troubling,we all need extra money in our households these days, if not for ourselves, for family members who have been hurt by the depression we're in.
    I have total confidence that our council will fix this situation, they will use it as an oportunity to turn around for the better.
    So everyone cheer up, this is more good news than bad!

  13. Finally, the spending habits of past councils makes sense! I could never square the claims of impending financial disaster with the ease with which money was spent. How about that quarter of a million of the DSP? (Yes, a quarter of a million dollars).
    We should take some of that money that has made a surprise appearance and hire an independent forensic auditor to tell us just what the heck has been going on.

  14. Sir Eric, I'm sorry about the multiple posts. I just can't get over how completely far out this whole money caper was in light of the facts now coming to light. And what's more astounding to me now (and was crazy-making then) was how many "smart" people were willing to accept the "word" of the City Council even in the face of an affirmative inability to demonstrate one single word of what they said. This is how things go completely wrong and it continues to happen in Sierra Madre. One Carters get approved in the face of a mountain of evidence that it will have a devastating effect on the environment, lawsuits get settled that have no business being settled, and taxes are voted on the strength of a deficit that is not only NOT a deficit but an unsurpassed surplus. Bad that the politicians gave us this spin, but the very worst is the people who believed it. When the City could not file its financial reports on time, that is nature's way of saying that what they're not telling you is important. Just unbelievable.

    I'm just very grateful this information has come out. It's very important for us to learn two lessons: One about the politicans who lead us in their Hillbilly government, and the other about ourselves and how willing we were to be duped and not insist on having the information required.

  15. roia: It does defy all logic, that's for
    sure. How could they ask the taxpayers to
    vote themselves a tax hike when they were
    not sure themselves what the City had? Why
    would they put themselves in such Jeopardy?
    Were the comedians who ran this city during
    the Shenanigan Years really that clueless
    and panicky?

  16. Email this link to everyone. This information needs to get out. Since there is no local paper, this is the only way the residents will find out what is happening.

  17. Alert to Sierra Madre Politicians:

    You've got the best investigative journalist in the SG Valley in town.

    Hats off to Sir Eric! (again!)

    A question begs asking here: what did they really want the tax hike for? was this a prudent measure, given the Economy, to protect the community in the future?

    or was there a different motive?

  18. The next time a City Council wants a tax hike or bond, people will think they are just crying wolf.


  19. All of the above brings to mind an old proverb,"Public money is like holy water;everyone helps himself to it".

  20. Anonymous at 12:28

    You bring up a scary scenario.....people will think they are crying wolf, especially since they voted down Measure F and voted in the UTT, believing they needed money for a specific purpose.
    However, as long as the people don't elect dirts to public offices, we'll get a square deal!

  21. Rule of thumb - any time any kind of "Ad Hoc Citizens Committee" is created, or "Scoping Meeting" where "all are invited" is called, or a "community meeting" is organized where questions by "community members" can be asked and will be "addressed" by "proven industry experts," you know it's a scam. What it means is that those pulling the con are setting up a situation where they can claim that they have the approval of folks like you and me. This UUT debacle is only the latest example.

  22. Anyonymous at 1:18

  23. This comment has been removed by the author.

  24. Oh, there's been a vote in Sierra Madre on undergrounding. I know because Bart Doyle voted to underground the electric lines on his street without disclosing his residence or recusing himself from the vote. That little transgression earned him an FPPC violation and a $5000 fine. And that's the one he got caught on.

  25. Oh, and a quarter of a million on the DSP? I understood it was $300,000. And don't forget the library plans. You know, the library that was to be moved or rebuilt or whatever. Quite a bit of money--I understand in the hundreds of thousands--was spent on something that was never approved by anybody. Dig that.

  26. Roia, wow.
    Yes, associated costs around the DSP went to goodness knows, but RBF got $250,000.

  27. I remember wondering why Baldwin was paved, & repaved, & utilities were put underground (in strife - all the different utilities were fighting with each other). I thought it was to get it all shiny & new for the Carter Millionaire Estates.

  28. It was for their patron, Bart Doyle. I never knew who ratted him out, but if I did, I'd buy them a drink.

  29. Too bad they didn't fix up that rat's nest, he calls a house. That would have helped property values in the area. I wonder what it would take to get Volpe to write Doyle up for the health and safety issues his slum house has created.

  30. Anonymous the XIVMarch 9, 2009 at 4:21 PM

    Can we have it seized under eminent domain as a blighted property? Be some poetic justice in that.

  31. Let's run Bart out of town, perhaps he can move into one of the slums in his Transit Village in El Monte.
    Take old Karma Bell with him, anyone know if Karma still works for the BIA?

  32. Hank: Just checked. Karma still can be contacted at an email address at the transit web site. Looking for a lunch date?

  33. Nope, ole Hank doesn't drink anymore these days!

  34. Speaking of Bart Doyle:
    I observed him at the Ray Bradbury event at the Library, sitting with none other than our councilman, his "Golden Boy" John Buchanan.

  35. Sierra Madre business ownerMarch 9, 2009 at 6:36 PM

    Do you think they were conferring on what to do with all the money they suckered out of the residents?

  36. They may have been, Sierra Madre business owner.
    At this point, nothing surprises us.
    Wonder what Sir Eric will put up tomorrow?
    I don't know if I can take take this.
    It's all so.........mind boggling.

  37. Sierra Madre business ownerMarch 9, 2009 at 6:54 PM

    Good one, Old Kentucky. A boggled mind is definitely one of the signs that you've been paying attention to Sierra Madre politics.

  38. Has anyone checked their utility bills?
    Check your water, gas, electricity, phone, cell phone, computer......I think they call the latter "user tax".
    We are bailing out the "dirts" and their damned development schemes.
    Damn you dirts! Damn you!

  39. Well, this either points to complete incompetence of previous council members (not a big surprise) or yet more evidence of those same council members reaching "consensus" to violate the public trust for personal gain (REALLY not a big surprise). Either way, this community was ill-served by those past council members. It is now up to the current council to eliminate this additional UUT and to put lmitations in place to prevent the local government from abusing the trust, good will and generosity of this community ever again. Is it too late to tar and feather and run out of town on a rail the likes of Buchanan, Mosca, Joffe, Stockley, Lambdin, Doyle....???!!

  40. We should keep the UUT and the surplus in the city coffers, keep these funds separate from general funds, run up the total and then buy all the properties in this town that are in contention...problem solved!