Certainly you must know by now we are living with a City government that is literally obsessed by the need to constantly increase the costs of cohabiting with it, and that those running the place have been exceedingly relentless in this regard. If there really is an actual process involved here, it is one that never seems to want to stop. Our roommate troubles have been going on for years, and show no signs of ending anytime soon.
As I am also sure you are equally aware, another water cost increase would be the third in roughly as many years, and that by extending the UUT at its current double digit rate Sierra Madre residents would continue to pay among the highest utility taxes in California. Right up there with cities such as Bell and Compton. Two municipalities not celebrated for their fiscal wisdom.
Interesting facts. Or at least I like to think so.
All that said, here are a couple of upcoming City Council meeting items and dates worth noting in your schedule:
October 22nd - Discussion of the Prop 218 Process: As you may recall, the last time we underwent a Prop 218 process it was decided by our City Attorney that if the people of Sierra Madre wanted to exercise their right to vote on a water rate increase, they would have to run the election themselves. Unlike other municipalities (click here) our City Hall sent out no Proposition 218 ballot last time, which meant that a number of us finest citizens had to run around town with clipboards and do it in the City's stead. The question now is will this be the meeting where the City Council decides whether or not they will send out these Prop 218 ballots themselves? My guess is yes, this will be the meeting.
November 12 - UUT Possible Ballot Initiative: All the way back in April of 2012 the City attempted to extend Sierra Madre's sky high utility tax rates for another five years. The result being that the supposedly temporary tax with the temporary increase was shot down by the voters of Sierra Madre by over 60% (link). This will be a discussion item for the City Council, and certainly it will be an interesting one. You don't often see elected officials fly in the face of an overwhelming will of the voters. At least, not in modern democracies.
November 12 - Water Rate Increase: For the second City Council meeting in a row, the consultant will not be ready to present the City Council with what it is supposed to decide about a water rate increase. The result being this matter now bumps from the October 22nd meeting. Chances are pretty good that when the consultant is finally ready to let his freak flag fly he will not say water rates need to go down.
The City Continues to Avoid the Real Water Bond Issue
The question that keeps coming up is how exactly did Sierra Madre's waterless Water Department acquire as much bond debt as it has today. And judging by the City's serial evasiveness on this issue, that question must be a highly sensitive one. On October 10th City Hall sent out another of their legendary e-mail blasts (link). Here is the latest iteration of their evolving explanations:
What is the water department’s bond indebtedness? What were the bond funds used for? Does the water fund have any other debt?
The Water Utility has two bonds, and one interest-free loan. As of June 30, 2012, the balances were:
Water Revenue Bonds (1998 Series), outstanding balance of $2,635,000
Water Revenue Bonds (2003 Series), outstanding balance of $6,750,000
San Gabriel Valley Water District 10-year interest free loan, outstanding balance $1,165,500
Bond financing is used for primarily two reasons; first when projects are too large financially, and adequate reserves or revenues are not available, and secondly to allow for a large project to be paid for over the project’s useful life.
Between 2002 and 2013, more than $22,000,000 was invested into the City’s Water infrastructure. The source of the funding included, water fund reserves, Federal grants, bond funds and the interest-free loan from the San Gabriel Valley Water District.
Arcadia Interconnection - $101,000
Alta Vista & Sturtevant Main - $644,000
Mira Monte Reservoir & Pumping Facility - $10,840,000
Grove Reservoir - $4,890,000
GAC Treatment Facility - $3,675,000
Well Repairs/ Wells # 6,5,3,4 - $1,988,000
Total Project Costs: $22,138,000
All of which is way besides the point. Here is the real problem as I see it. That $6.75 million dollars raised through selling water bonds in 2003 later became nearly $15 million dollars in hard debt. And why is that? It came about because City Hall somehow decided to make interest only payments on this hefty chunk of fiscal obligation. And even today we are only paying the interest.
Even the worst credit card abusers know that this is not the fiscally wisest thing to be doing.
To use the somewhat controversial home loan metaphor (I personally don't think it is a valid one, but this has been used often in official settings), we are now underwater about two and a quarter times. Which should be seen as a bad thing. It never should have gotten to this point.
As someone once said, it is not the crime that gets you, it's the cover up.