Thursday, October 14, 2010

Sierra Madre's Ongoing Bond Shenanigans? And More!

We write about a lot of topics on this blog, and really do owe it to our readers to follow up on things once in a while. Just because Sir Eric's wandering attention span leaves for distant places far too often does not mean the news ever stops.

So in the spirit of giving the people what they want (or, depending on who you're talking to, what they do not), here are three follow up stories on topics that we've covered recently. We'll start with the aforementioned Bond Shenanigans first.

The Fall and Rise of Sierra Madre's Standard & Poor's Bond Rating

Now you do know that for quite a while Sierra Madre's Standard & Poor's bond rating was basically junk, right? We had gone from being a gilt-edged AAA kind of town to one whose bond ratings had collapsed to a dismal BBB. Which is the financial equivalent of collecting cans and bottles for a living. Not that some fine people don't collect recyclable containers, and I certainly do not mean to disparage the activities of those employed in that field. It is a green job after all. Besides, somebody has to do it, and we should be grateful to those who do. But for a town like ours it should be considered an unfavorable metaphor.

Here is how Standard & Poor's describes Sierra Madre's tragic fall to junk bond status. Take note of the dates.

New York (Standard & Poor's) Jan. 27, 2006 -- Standard & Poor's Ratings Services suspended its rating on Sierra Madre's 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 creates uncertainty regarding the authority's financial condition and credit quality ..."

Now as students of this town's history are aware, 2003 and 2004 was not only the very heart of the Shenanigan Era, it was also a time when we were overseen by Mayors such as Bart Doyle. A gentleman who many consider to be the author of the interest payment only 2003 Water Bonds that have become such an item of concern lately. The existence of which was unfortunately obscured by City Hall when it issued its fallacious Water Rate Increase Notice to the rate payers last May.

But we should also note that Sierra Madre's S&P bond rating collapsed to junk status in 2006, which was during the time that this city was overseen by the likes of John Buchanan. Whom many regard as the shenaniganistic heir of Bart Doyle, both in the lack of substance and basic competence kind of way. That neither of these esteemed gentleman seemed capable of overseeing our city government in a manner where we could get those all-important audits done, thereby resulting in a complete collapse of our Standard & Poor's bond ratings, is the stuff of local legend. It wasn't until Kurt Zimmerman became Mayor that these audits were completed.

But that was then. Recently Standard & Poor's issued another report regarding Sierra Madre, this time resurrecting our bond rating from junk to something a little less dire.

New York (Standard & Poor's) May 07, 2010 - Standard & Poor's Ratings Services reinstated its "A-" underlying rating (SPUR) on Sierra Madre Financing Authority, Calif's tax increment bonds, issued for Sierra Madre Community Redevelopment Agency. We had withdrawn our SPUR due to the lack of financial audits for the agency. However, the city has recently come under new management and has produced audits for fiscal 2009 and prior years. The SPUR reflects our view of: A small project area that consists primarily of residential and commercial properties, good assessed value (AV) growth in recent years, and A below-average volatility ratio ...

I don't know about you, but I find the date of Sierra Madre's bond rating resurrection to be more than just a little interesting. May 07, 2010. Wasn't that about a week before our nearly 40% ($18 million dollars with accompanying government grants) Water Rate Increase was legally noticed to the world?

Could it be that was a portion of the price for getting our bond respectability back from Standard & Poor's? Raising water rates and therefore a whole lot more cash? I'm sure that S&P would have found that to be of far more interest than Bruce Inman's famous length of rusty show pipe.

Which you do know that was just something meant to baffle us townies, right?

Altadena Moves Forward With Its Plans To Withdraw From Pasadena Unified School District

With the closing of three elementary schools, along with the overall poor quality of much that PUSD offers, there has been some fairly widespread anger from parents over the kind of education their children are receiving. An example of which would be the 60 pupil kindergarten class at Sierra Madre Elementary. The dream for many Sierra Madre parents being that perhaps their kids would be better off if we just fired PUSD and did the job ourselves.

For the parents of that other PUSD captive city, Altadena, that dream is now a lot closer to becoming a reality. This from today's Pasadena Star News:

Altadena secession effort reaches PUSD board - School officials and residents should brace for a long and complicated battle over Altadena's future in the Pasadena Unified School District, a county official said Tuesday.

Weeks after Altadena residents handed in more than 7,000 signatures in support of the unincorporated community's secession from the PUSD, an official from the Los Angeles County Office of Education presented the long process for secession, but wouldn't speculate on the likelihood of creating a new school district north of Pasadena.

While a secession effort could take more than two years, the time frame has done little to deter a group determined to separate from PUSD, which one petitioner described as "incapable of meeting its obligations to its students."

"We want to put an end to so many of our students dropping out before graduating high school, or graduating high school with eight grade skills," said Bruce Wasson, an Altadena resident who helped gather signatures ...

So why is it Altadena seems capable of pulling off such an incredible coup in support of their children, while Sierra Madre remains completely oblivious to such as opportunity? We need to grab our schools back from these people and take our business elsewhere. And in this regard it would appear that we have a lot to learn from Altadena. They are way ahead of us.

More On Proposition 23

I was pretty roundly cussed out by some commenters for offering support for Prop 23 the other day. Which was refreshing in that it reminded me of the glory days of my City Council run. That my critics totally missed the point about the damage AB32/SB375 would do to the character and quality of life in small low density communities such as ours is fine. It showed that this very complex issue is considerably beyond their "Texas oil companies bad - us good!" level of comprehension.

However, I thought I'd set the record straight on some of this anyway. Here is an example of what I believe should be chopped up and fed to the cat:

Tattler Post - Oct 11 @ 8:56 pm: If I have to choose between elected representatives and Texas oil companies it's a pretty clear choice - I go with the reps. It may be a choice of the lesser of two evils, but oil companies are about the evilest institution on the planet.

For the record, in Texas the unemployment rate is about 40% of what it is here, and the politicians there have as yet avoided running their state into near bankruptcy. As a matter of fact, their budgets are balanced. And would you believe that their public schools receive far higher marks for quality than what ours are getting these days?

Tattler Post - Oct 11 @ 9:26 pm: I guarantee you Yes on Prop 23 will outspend No on Prop 23 by at least 10 or 20 to 1. If you want to go with big oil, that's your choice. But at least admit who your friends are.

Actually the people I consider to be my friends are a little more careful with their facts. Here is how that spending ratio actually works out, courtesy of the New York Times "Green" blog:

Foes Outspend Backers of Proposition 23: At the start of the campaign for California's Proposition 23, the ballot measure that would suspend the state's global warming law, opponents darkly warned that the Texas oil companies backing the initiative would spend as much as $50 million to win the election.

But with three weeks until election Day, it is the No on 23 coalition of environmentalists, investors and Silicon Valley technology companies that is raking in the cash, taking in nearly twice as much money as the Yes on 23 campaign.

As of Monday, the No on 23 forces had raised $16.3 million to the Yes campaign's $8.9 million, according to California Secretary of State records.

It would appear that among the biggest contributors to the No on 23 effort are hedge funds. Companies that have become synonymous in the minds of many with the kinds of fast and loose trading practices that led this country into the financial crisis it is now. Hedge fund managers understand all too well how how the potentially huge profits to be made in the "cap and trade" aspects of AB 32 could be of great interest to them.

And if you don't think that kind of profit is what is really driving AB 32, well, I know some people who'd love to sell you some bonds to go with your love beads.

http://sierramadretattler.blogspot.com

56 comments:

  1. Give me some of that bubblin' crudeOctober 14, 2010 at 7:01 AM

    Well Eric, I for one come out in favor of BIG TEXAS OIL in the Prop 23 battle. Why?

    Because on this one BIG TEXAS OIL is pitted against BIG GREEN ENERGY and its efforts to receive a BIG GOVERNMENT mandated competitive advantage (subsidies, regulations) in the battle for energy supremacy. Personally, I like my energy cheap. So when BIG GREEN ENERGY gets its cost below that of BIG TEXAS OIL I'll sign up for the green variety.

    This is all bad enough when it results in tax payer subsidies to BIG GREEN ENERGY (think General Electric windmills spoiling the desert or Cape Cod) - but when it costs my neighbor his or her job it is too much to stomach.

    Please vote YES on Prop 23.

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  2. Oh boy--Texas schools! I jointed the Texas Freedom Network (tfn@tfn.org) in response to the Texas School Board wanting removal of all references to Islam in their textbooks (LA Times article last month) and wrote the times a letter to the editor and the TFN that the Texas math books would have to start doing their work in Roman numerals!

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  3. Good point, 7:02. BTW, you need to stop by City Hall on your way to work today. They have some bonds they want to sell you.

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  4. Roman numerals are important. How are you going to keep track
    of the Super Bowls if you don't know them?

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  5. You would have thought getting our bond rating back would have been reason for the Mayor to celebrate and have the City Manager make a big announcement complete with buggles and drum rolls. But to announce that the City got it back would mean they would need to say they had lost it.

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  6. It seems obvious that the last thing city hall would want to do is draw attention to their bond problems. Especially since that is the real reason why they need to raise rates, fees, and taxes. Better to just blame the pipes.

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  7. Be there done thatOctober 14, 2010 at 8:15 AM

    Sierra Madre has tried a couple of times to withdraw from the PUSD. The most recent attempt was about 20 years ago. The group made it to the hearing in Sacramento. At the hearing the committee said that providing a poor education was not a reason to leave the district. It all came down to upsetting the racial balance. Even today if you are a white child who has never been enrolled in the PUSD because you attend a private school the district will not release you to another district.

    GO privatte or you kids will suffer in the long run. And yes I know there are a few good teachers and some kids do ok and get into college, but why take the chance with your child's educatuion. Even Buchanan went private for high school after touting the greatness of the Pasadena schools.

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  8. Anyone who doesn't see the necessity of voting YES ON 23, is either a crook who stands to profit from over-development or a fool.
    I'm sure that the vast majority of Tattler readers have already decided to voter YES on 23.

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  9. Why hasn't our City Council liaison to the Pasadena Unified School District informed us that 1/3 of the PUSD is about to escape? Is that another one of those things we're not supposed to worry our pretty little heads over? AND 7,000 SIGNATURES? Good Lord!

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  10. Don't move to Sierra Madre if you want good public schoolsOctober 14, 2010 at 8:46 AM

    In reality our City Council DOES NOT support the Pasadena Unified School District.

    Walsh--her grand children go to Saint Rita School
    Buchanan-- his son attends La Salle
    Moran-- attended Gooden and Flintridge Prep
    McGillvary--her children attended Mayfield, Loyola, and Flintridge Sacred Heart Academy
    Mosca--his son attends Pacific Oaks

    All of the Council members want the best for their kids. Or as in Moran's case, his parents wanted the best for him.

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  11. Time to pay the piper.October 14, 2010 at 8:51 AM

    Any parent whose kid drops out of school should be billed for the cost to the tax payers for the wasted resources. It should be a tax lien on property, wage garnishment, or loss of welfare benefits. It should be recorded on their credit report if not paid. The debt should not be able to be discharged through bankruptcy. If the debt is not paid by the time the kid is eighteen years old, the debt belongs to the kid and he is responsible for it with the same consequences as for the parents.

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  12. The difference between Altadena and Sierra Madre is that the more influential members of our town are not dependent on public education. And therefore only pay public education lip service. Altadena, which doesn't have so much dough, needs public education. Which is why they are in a state of revolt.

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  13. It wasn't until Kurt Zimmerman became Mayor that he was able to keep his campaign promise that the audits were completed.

    It's appalling that a previous City Council with John Buchanan as Mayor didn't make completing municipal audits a priority. We have Kurt Zimmerman to thank for getting us back on sound financial track. You might want to amend your article to reflect this fact.

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  14. On Prop 23, I am reminded of the do-do bird which flies backwrd to see where its been rather than forward to see where its going. "Yes" raps the knuckles of subsidized change, "No" raps the knuckles of big oil profits. It is a "lose lose" decision. Just a question of which, "yes or no" do you lose the most. The only fact is that eventually the oil runs out.

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  15. I think your article should clarify that it was former Councilman Kurt Z. who made sure that the audits were finally completed.

    Joe Mosca and John Buchanan didn't think the audits were a priority when they served on the previous City Council.

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  16. And now we know why Mosca and Buchanan didn't think the audits were a priority. They knew what an audit would disclose. Those two were buying time hoping the DSP would bring in enough money to pay off the bondss and make the potential audit findings "moot".

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  17. On the plus side, with the city's bond rating so low it wasn't easy to sell new bonds. Look at the money we potentially saved.

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  18. The irony is that after Zimmerman and MacGillivray fixed the audit situation and made it possible to fix our bond ratings, now we got Buchanan and the Doyle's bobbleheads back to screw things up all over again.

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  19. Don't they teach the dismal science anymore?October 14, 2010 at 10:07 AM

    9:35 is almost correct. Oil will never run out, because demand for oil will cease when it becomes too expensive to extract. However, oil will cease to be a viable energy source once cheaper energy sources arise. Which is why I sleep easy, secure in the knowledge that the invisible hand of the market will give rise to a flourishing green energy market when the time is right.

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  20. Once clean technology personal transportation becomes available all of this will be besides the point. Greenhouse gas emissions will come down without people having to live in small densely packed urban environment. What Sacramento wants with AB32 is already obsolete. Once again private industry and the marketplace will dictate the real solutions. The bureaucrats just need to get out of the way.

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  21. audits????

    we don't need no stinkin audits.

    Bart Doyle
    Joe Mosca
    John Buchanan

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  22. Stop overdevelopmentOctober 14, 2010 at 12:21 PM

    There must be a fancier name for this, but it is sooooo the pot calling the kettle black to say that a yes on Prop 23 puts you in bad company!!!! Who the hell are you allowing into your bed on the No side?????

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  23. One of the reasons Sierra Madre has not been developed like Arcadia is that it has not been able to offer a good school district.
    Another one of the factors that ended up controlling growth.

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  24. The people of Altadena are right to try it on their own.
    The PUSD has failed them.
    And the Altadena scores and stats have brought the PUSD's down low, low, low.
    It'll be a positive spilt for both sides.

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  25. The No on 23 people have an advantage. Few people understand the interests that defeating this proposition will benefit, and just how bad the consequences will be.

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  26. Within 5 years of getting out of PUSD Altadena's scores will surpass Padadena.

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  27. Jon Stewart pointed out that all the Democrats seem to be able to say is Republicans are worse.
    Rally to Restore Sanity 10/30/10 streaming online at Comedy Central.

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  28. I'll take that bet 12:36.....

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  29. People who live in Sierra Madre will show up if they know their money is being screwed with, and that's why this city council and city staff have been so eager to hide what they're doing. How do we force the city t give an accounting of all this money they got from the bonds? Where did it go?

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  30. Mayor Mosca will inform us that it is too early in the process for us to know where all the water bond money was spent. It will have to be discussed by the City Council before official policy can be set, which should take around 8 months. By then he is hoping you will have forgotten all about it.

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  31. I'll go you one better 12:44. There will have to be an oversight committee appointed by the mayor, consisting of people with banking and financing experience, chaired by Rob Stockly.
    Mr. Stockly refuted resident Alma Mays' concerns for years, when she would go to council meetings and ask "Where are the audits?"
    They're taken care of Alma, it's all in process.
    What a lie.

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  32. Both of you are wrong 12:44 and 12:51.
    There will be a citywide edjamacation outreach
    to help the poor slow Sierra Madre villagers
    understand the need
    to trust the council

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  33. Prolly explains those large barrels of Kool Aid stacked out in the back of city hall.

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  34. Ah c'mon. It's kinda hard to dodge questions all the time. Can't say, yeah we were idiots and harbored a criminal who destroyed our records and sued us - yeah we were not aware that we were being advised by a wolf who saw this town as full if sheep - yeah, we went into business with a corrupt developer to maximize our hillsides and it didn't work out so good - yeah, we sold the town our from under you but it was for your own good.
    Tuff sells, ya know.

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  35. And
    yeah we lost track of your money, but we love the village

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  36. Mosca will point out that 2003-2004 was before his time; Buchanan will say nothing... Karin Schnaider and Elaine Aguilar will plead no knowledge of past actions. Moron and Walsh will bobble.

    My prediction? We'll be told the bond payments have been made, and that the bond debt will be retired in the years to come.

    Irregularities will not be talked about by City Staff or the Council. So, dear Tattlers, take your questions to the podium. Demand answers. But most of all show up Tuesday night to support MaryAnn and those to do speak! We must present a united front of concerned citizens.

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  37. Will Sargent at Arms take our pitch forks?

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  38. Good point. I'll be bringing a pronged garden trowel in a holster hidden beneath my blazer.

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  39. Is there any connection between the vigorous opposition to Zimmerman's request for a forensic audit and the current disturbing revelations?It certainly would be of interest to know the reasons given and who were the voices against it.And Please Don't use the absurd excuse that an audit is to costly and everything was removed and or destroyed.. That's not good enough!!

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  40. Of course they did everything possible to resist a forensic audit. A forensic audit into the Shenanigan Years would be like going into a graveyard with a backhoe. You're sure to find a bunch of bodies if you dig enough.

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  41. The financial records for the bonds may no longer be in city hall but believe me they do exist and the city manager knows that she can and better damn well get them.

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  42. where's the forensic auditOctober 14, 2010 at 3:29 PM

    Yes 2:35, there have to be records aplenty of all city financial dealings from the dealt with parties. Have to be.

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  43. Crawford, what happened to the Angry Mob? We don't care about no stinkin Buncleville Tattler. We identify with the mob.

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  44. Speak for yourself, 3:31.
    I for one enjoy the restless adorning of the Tattler.

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  45. Bring back the mob! Bring back the mob!

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  46. How about next council meeting everybody don oversized lobster bibs, make your eyes look all crazy, lick your lips alot, have a fork in one hand a butter knife and/or nutcrackers in the other, twitch alot and stare at the council person you would like to eat the most. Growling at appropriate times during the discussion.

    Works for me

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  47. 3:59, eeeeeeuuuuuuu

    Here's a better fantasy:

    This afternoon, in front of city hall, 4 of the council hand in their letters of resignation, and Susan Henderson is there to take photos.

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  48. Just smile and nod all meeting like a happy bobblehead.

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  49. You ever been to Buncleville? You'd take that back if you had.

    Makes Sierra Madre look like Petaluma.

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  50. I looked around the Buncleville site a bit and followed Old Hippy62 to Pensacola....

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  51. Well there you go. Say you;re sorry.

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  52. Thelmas husband said "Good Lord"October 14, 2010 at 5:49 PM

    4:23 That sounds like the part in Thelma and Louise when they have that truck driver out in the desert, Say;re sorry, I won't he says.. Boom Boom and his truck goes up in flames.

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  53. Sierra Madre postal customerOctober 14, 2010 at 5:51 PM

    My favorite part of the city's 411 on H2O card is " the October 19th meeting is being held at an important juncture in the City Council's deliberation process."
    An important juncture - they probably mean the one where they break the bad news that we have to pay more or go bankrupt.

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  54. vote for meg whitman!! california schools will have the arts cut, even larger classes, more teacher layoffs, and fewer college courses. But who cares, we are only the 47 lowest educated country in the world and she just wants to test test test. Let's create more robots.

    cut another 7 billion from the education budget. after all, their not my problem.

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  55. 8:43, poster for public education, you mean "they're" not "their."

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  56. Voting yes on prop 23 will do nothing to change the fact that Sacramento is taking land-use decisions from local governments. Prop 23 is surgically designed to benefit oil companies.

    According to the voter pamphlet prop 23:
    "Much regulation in the Scoping Plan Would Likely Continue. ... The regulations that would likely move forward, for example, include: ... Land-use policies to promote less reliance on vehicle use." Prop 23 will not halt SB 375.

    What prop 23 would do relates ONLY to policies in AB 32 which decrease the profits of oil companies: 1) eliminate the proposed cap and trade system for green house gas emissions, 2) eliminate the requirement for cleaner fuels, 3) eliminate the requirement that electricity suppliers get 1/3 of their supply from renewable sources and 4) eliminate the fee on oil and gas companies for administering AB 32.

    The idea that prop 23 has anything to do with curbing the powers that be in Sacramento with respect to land use development is a total and complete red herring.

    The oil companies are not stupid -- they know not to take on the BIA, CRA and the rest of the California Industrial Development Complex.

    Prop 23 is about protecting the profits of oil companies and making sure no competitors get a foothold in California.

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