Now you probably remember from two weeks ago that the instruction the G4 Council gave to City Staff was to go forth and create a new grid of water rate hike options that would reflect the requirements for properly servicing the 2003 Water Bond debt. Sierra Madre being out of compliance with the covenant requirements for maintaining 120% of what is owed at the moment, or something. A menu of three ala carte options is what staff was asked to provide, and I will share a little bit of each of them with you shortly.
In light of everything that has happened over what's been 6 long months of some truly rank deception on this matter, it is only fitting that the final decision by the G4 Council on raising our water rates should take place at the end of a meeting that encompasses more agenda items than we have seen in months. Which means that the final vote on this water rate increase won't take place until around midnight, when the town is fast asleep.
Apparently the G4 Council prefers to do this bit of work when there is nobody around to watch.
Perhaps you also recall there was an undetermined amount of time provided for returning with this menu of options. The tall tale being that since City Staff would need to go back and consult the consultant, it could take a little time. Something that perhaps helped to ease some of the tension in town, giving folks the sense that this matter would take a while and we wouldn't have to sweat it out so soon.
Well, such is the way with dreams. It turns out that all the consultant needed to do was plug into his computer a few new numbers, print out the results, and then slap it on the usual boilerplate. Probably took all of a half a day. Certainly City Staff knew this, as I suspect did the G4. And that what had been alluded to as something further down the road turned out to be when the next City Council meeting was scheduled to take place.
All of which fits the way the G4 Council works. Nothing is ever completely on the level with these guys.
So just how deceptive has this so-called process been in regards to the water rate hike? First it was supposedly about the state of the City's plumbing, and that extra cash was needed to repair some funky pipes. Then came the water rate protest, which led to City Staff arbitrarily throwing out 250 or so protest forms signed by real Sierra Madre residents. Which they figured was enough to get them out from under Prop 218. Then it was revealed right here on The Tattler that the actual reason for raising our water rates was not the pipes after all, but to help the City cope with $19 million dollars in bond debt. Which forced the G4 to swap out their story, and quite abruptly. Something they did without even blinking an eye.
And now, of course, we know that it wasn't just about bond debt, either. Rather it is also about improving the financial profile of Sierra Madre so that our bond rating can be returned to the AAA status we lost in 2004 when City Hall forgot how to do its paperwork. Something very important to Mayor Mosca as he pushes to sell even more bonds. Sewer, street and, of course, water infrastructure bonds. All so he can provide the kinds of amenities needed to enable the Los Angeles style high-density development that brought him to our town in the first place.
But let me ask you this. You do know that this is also a matter of protecting General Fund moneys, right? The bond debt will have to be paid no matter what, and the money found somewhere. And that demand could become so great in a few years that things like staff cutbacks and reductions in service would have to be considered.
Government always takes care of its own first.
So what are the three water rate increase possibilities that will be offered for the G4 City Council's consideration this evening? Here is the heart of the matter, taken from the menu of options created for them to choose from.
Option 1: This option provides five years' of equal increases with the 1.20 bond covenant requirement satisfied in year five. Establishment of the different tiers requires an initial increase of 7.26% from the current rate to reach Tier 2 and an initial increase of 8.94% to reach Tier 3. Once the tiers are established the annual increases match the Tier 1 increases at 4.19%.
Option 1 results in a cumulative five-year increase of 22.78% - 28.38% depending on the customer's consumption tier.
Option 2: This option provides five years' of equal increases with the 1.20 bond covenant requirement satisfied in year three. Establishment of the different tiers requires an initial increase of 8.38% from the current rate to reach Tier 2 and an initial increase of 10.06% to reach Tier 3. Once the tiers are established the annual increases match the Tier 1 increases at 5.66%.
Option 2 results in a cumulative five-year increase of 31.69% - 37.18% depending on the customer's consumption tier.
Option 3: This option provides five years' of equal increases with the 1.20 bond covenant requirement satisfied in year two. Establishment of the different tiers requires an initial increase of 10.06% from the current rate to reach Tier 2 and an initial increase of 11.73% to reach Tier 3. Once the tiers are established the annual increases match the Tier 1 increases at 7.54%.
Option 3 results in a cumulative five-year increase of 43.83% - 49.43% depending on the customer's consumption tier.
So there you are. Do recall that back on May 11 the proposal then called for a 5 year increase of 32.95% to 37.42%. And since the G4 cannot give approval to anything above that rate without (in their City Attorney dependent minds) triggering Prop 218 again, the chances of them approving that rather jumbo Option 3 increase is nil. I suspect it is only there so John Buchanan can lower his glasses and humbug, "Now that is what we should be approving on financial grounds, but because we are in a difficult economic environment I don't believe we ought to." Which will immediately set those very compassionate Bobbleheads to bobbling, I'm sure.
Now Option 2 is only a fraction below the May 11 proposal, yet given the G4's desire to cut the voice of the rate payers out of the equation by eliminating Prop 218, this one could be approved. But I'm not sure that would appeal to Mayor Mosca's sensibilities. He does need to be liked, and it might seem rather uncivil to hit this town with basically the same increase that caused all the hubbub in the first place.
So my money is on Option 1. This will enable the G4 to posture about their kindness and concern for "doing the right thing" in these troubled times. You know, like they are giving us a gift. And that would still help to get that bond rating up to where they want it to be.
All so they can spend this town into far worse debt than it has now. Because from the very beginning it really was all about money and real estate development, and precious little else.