Which, as any reader of The Tattler can tell you, is right in the heart of the Shenanigan Years. That one of the chief shenaniganians will become our Mayor next year only makes this sad mess all the more poignant.
Here's the smoking gun. If you look at the Year 2003 Report contained on the State of California Treasurer's Office site (click here) you will see something rather amazing. It details the sale of two very expensive Sierra Madre water bonds. These bonds are for 30 years at 5.543% interest, or about 2 percentage points higher than a similar bond would go for today. They are for "water supply, storage, and distribution." The amount of these bonds comes to a rather hefty $6,750,000, if it was mortgage style amortization. Which, when they are paid back in full, will amount to total payments of $13,725,699. All of it straight out of the pockets of people like ourselves.
Which explains why the Water Department has so little cash available to perform regular maintenance on all those fine vintage water pipes we have here in town. The money is all being spent to keep up with our substantial bond obligations.
What might very well have been happening here is that City Hall, awash in bond debt, needed to raise more money to keep their heads above water. So to speak. But the last thing Mayor Pro Tem John Buchanan and his compliant bobbleheads would want to let out to the public is that we owe almost $14 million in debt payments because, for whatever reason, the City back then committed us to some very large (and, at today's prices, very expensive) water bonds. The date of birth on these bonds is 08/25/03, a time when the City Council was mainly comprised of his political allies.
So instead what City Hall did this year is claim that their need for the near 40% water rate hike was based on the state of our old pipes and water infrastructure. Hoping all the while that the residents here, just off an election, would somehow be looking the other way. The City could then sneak through the new water rates and handle their bond crisis while making a great show of repairing those pipes. Which would, as any reasonable person will tell you, only take a relatively modest share of the $18 million they were hoping to get out of us and the Federal Government.
But wait! There's more!
Did you know that Sierra Madre's Community Redevelopment Agency could very well be a credit rating basket case? In January of 2006 Standard and Poor's lowered the boom on our apparently crippled CRA. Here is what the report link tells us:
New York (Standard & Poor's) Jan. 27, 2006 -- Standard & Poor's Ratings Services suspended its rating on Sierra Madre Financing Authority, Calif's tax increment refunding bonds, issued for Sierra Madre Community Redevelopment Agency, reflecting a lack of current financial information. "The lack of audited financial information for both fiscals 2003 and 2004 created uncertainty regarding the authority's financial condition and credit quality; Standard & Poor's may reinstate the ratings after public release and analysis of financial statements, which, in the opinion of an independent auditor, fairly present the financial position of the authority," said Standard & Poor's credit analyst, Hilary Sutton.
Now correct me if I'm wrong, but hasn't subgenius Mayor Joe Mosca been touting bonds as a marvelous way to raise the cash necessary to repave all the roads in town?
It looks like the Shenanigan Years really are back. No wonder the thought of a forensic audit had these characters racing for an undergarment change.
The Research Team has a whole lot going on with all of this, so what you're seeing here today is merely a first pass. Expect a lot more information on The Tattler over the next few weeks. It looks to this observer like City Hall was not being initially straight with us on their given reasons for the nearly 40% water rate hike they were pimping. And we intend to hound them endlessly for what looks to me like a grave ethical lapse.
After all, it's what we do.