Tuesday, September 30, 2014

Captain Obvious: How Sierra Madre's Robust Real Estate Market Makes The Utility Tax Cut A Walk In The Park

-
(Mod: Today's guest informant is Captain Obvious, a gentleman who is as comfortable with numbers as he is uncomfortable with some of the curveballs being pitched lately by City Hall. What he shows us is that because of the huge real estate sell off in Sierra Madre recently, the City will easily make up the lion's share of it's so-called utility tax cut generated budgetary shortfall with the resulting surge in property tax increases. Because, and as almost everyone who has sold their house lately can tell you, the things are worth a whole lot more now than they used to be, which means more tax money for the taxman now that they've been sold. Captain Obvious breaks it all down into the following easy to follow steps, and then provides us with the spreadsheet to prove it ...  I think we can all agree, what a guy!)

Hi Mr. Tattler, this is your Captain speaking:

The figures of Real Estate Sales in 91024 is for the last 90 days ending 09/28/2014. They were obtained using the Redfin.com iPhone app.

What the big long attached spreadsheet at the end tells us:

- 83 properties sold in the last 90 days. That is the same rate as 332 sales in a year!

- Total property tax increase for the last 90 days is $282,622.

- Sierra Madre's cut of the increase is about 21.9% of that increase. That's $61,894.11 for the last 90 days.

- Multiply $ 61,894.11 X 4 = estimated annual increase of $ 247,576.44 so say $250,000. AND that's for every year + 2% COLA.

- The City says a drop to an 8% UUT rate would result in a $400,000 "loss of revenue".

- BUT, $400,000 minus $250,000 = $150,000 shortfall left to cover.

- A $150,000 shortfall out of a $8,500,000 general fund budget would be 1.76% of that budget. Are you telling me the City can't find 2% to cut?

- These figures do not take into account former Finance Director Schnaider telling the City Council that there was about $200,000 extra from 2013-2014.

Sincerely,

Captain Obvious

(Mod: Problem solved! Bring on the City Hall reorganization! Here's the spreadsheet.)



(Mod: Tune in tonight at 7PM for the Special Meeting of the City Council. They're dealing with the budget, and now you have some exceptionally good information to share with them!)

http://sierramadretattler.blogspot.com

86 comments:

  1. Great work, Cpt. Obvious! The UUT does not need to be increased. the city staff need to actually do their job and find appropriate cuts and the Council needs to give them firm direction to do so!

    ReplyDelete
    Replies
    1. those 83 households should be made aware of the Tattler

      Delete
    2. So go drop a sample article off at their front door.

      Delete
  2. Staples Office SupplySeptember 30, 2014 at 5:31 AM

    That was easy!

    ReplyDelete
  3. Speaking of obvious, the voters asked for a UUT cut twice, and rising property values have created a lot more property tax money. So what is the problem?

    ReplyDelete
  4. I think the most obvious point that is always ignored by those asking for more money is that this money comes in every year and will increase each year as the property tax rate increases. This is a great income stream.

    ReplyDelete
    Replies
    1. Also included are the increased costs of utilities. Time Warner has forced on us free digital adapters for each television in the home. Beginning in January, we will be charged $1.50 for each one. There will be an increased UUT cost added to that cost increase. BTW, one cannot purchase an adapter, one MUST rent it monthly.

      Delete
    2. There has got to be someone who is making bootleg adapters.

      Delete
    3. Yes, and didn't President Obama state that electricity costs would go sky high. Caaaa-ching for the UUT.

      Delete
    4. Unintentionally hilarious article in the Star News this morning about Edison "evening out rates" for residences. There are just so many ways to say rate hikes, right?
      http://www.pasadenastarnews.com/business/20140929/southern-california-edison-looking-to-even-out-residential-rate-structure

      Delete
    5. Edison rate hikes are so regular the city should start working them into the budget. Time to do some monopoly busting and go solar.

      Delete

  5. Good points about the utilities. What kind OD windfall will the city receive from all the air conditioner usage these last few weeks?

    ReplyDelete
    Replies
    1. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

      Delete
    2. But it is never enough.

      Delete
  6. Who will get the Chicken Little Award at the special City Council meeting tonight? My money is on Goss.

    ReplyDelete
    Replies
    1. Goss hands down. Anything beyond Chicken Little arguments and he is out of his depth.

      Delete
    2. I hear it is an attractive trophy.

      Delete
    3. What the cluck!!

      Delete
  7. Illuminating report, Captain. Thanks!

    ReplyDelete
    Replies
    1. Anyone know why this information had to be made public onthe Tattler, and not in the staff report?

      Delete
    2. The POA wouldn't have signed off on it.

      Delete
    3. Too many facts for a staff report, 7:44.

      Delete
    4. More people read The Tattler than staff reports.

      Delete
    5. Staff Reports work more along a mood swing model.

      Delete
    6. Staff reports are usually biased towards whatever will funnel the most money into their retirement accounts.

      Delete
  8. So if we all sell our homes and move out, allow mansionization Sierra Madre will have plenty of money without a UUT. Wasn't really what I had in mind.

    ReplyDelete
    Replies
    1. How will your moving out promote McMansionizing? It is my understanding that peoe are paying out the nose to get in here because Sierra Madre is not McMansionized.

      Delete
    2. 7:54 the city is making the big bucks, even if you and your attitude stay in town. Hope that helps.

      Delete
    3. 8:02 are you saying people moving in here want the small town quality of sierra madre? If so, where have you been.? They want to tear them down and build McMansions.

      Delete
    4. That is a ridiculous assumption.

      Delete
  9. I hope you're correct I assume they come to teardown and build bigger homes. That is they come for the opportunity to Mc Mansionize.

    ReplyDelete
    Replies
    1. That is why we need to finalize the General Plan!

      Delete
  10. 1. Don't vote for people that are were or are lawyers as they will always muddy the waters with stall tactics and hidden agendas .
    The only decent example of alawyer is Atticus Finch ... As we all know he's a work of romanticized fiction.

    2. If a person has strong ties to public service unions avoid them at all costs they can't function without bureaucratic red tape and oversite committees...
    Before you know it Sierra Madre will have a committee for the dotting of "I's"and crossing of "T's" .

    ReplyDelete
    Replies
    1. I agree, I will never vote for another lawyer - ever.

      The only exception would be Kurt Zimmerman, but he's not a lawyer, he's a real practicing attorney but he's moved on and is our loss

      Lawyers talk a lot and compromise our city

      Delete
    2. Let's just say he's the exception that proves the rule.

      Delete
  11. So, let's see... perusing the list one finds a tiny handful of homes sold for less than $500K. I wonder how many of the sellers said, "Oh no! Let's lower the selling price because we want to attract buyers who are looking for small town ambiance"? No, no, no, Tattlers. Humans being who they are, are far more interested in maximizing their little homestead, stripping the newcomers from their treasure. Who in turn now have an enormous investment to protect and will add square footage and false porticos to their 50's ranchers and demand a full service city at great expense to the taxpayers. Who do you think you are kidding? Folks don't buy in Sierra dMadre anymore. People buy in Sierra Madre because it's all they can afford.

    ReplyDelete
    Replies
    1. I am not sure I follow your reasoning here. New buyers in Sierra Madre are moving here because they want to pay high taxes?

      Delete
    2. If newcomers are affluent enough to buy here they are not in the slightest bit concerned about a paltry 10% UUT. It is the people struggling to stay here that can't afford it.

      Delete
    3. Yeah, right. Rich people just love themselves some taxes. Ever heard of something called the Republican Party? Besides, a 10% utility tax ain't paltry. It is the highest city utility tax rate in California. Paltry my tookus.

      Delete
    4. IDK it sure doesn't seem to stifle the real estate market. I guess when your property taxes are 20,000 a year it's not so much

      Delete
    5. You don't know. Utility taxes and property taxes are two different things. Utility tax rates are set by the City of Sierra Madre and it's residents. Property taxes are set by the County. Those taxes are the same everywhere in LA County.

      Delete
    6. And if your property taxes are $20,000 a year the city sure as heck doesn't need a UUT over 6%!

      Delete
    7. I realize that. property taxes are based on home value you buy an expensive home you pay more and persons buying here now are paying way more as the Captain so eloquently states. UUT is maybe $50. a month property taxes on a million dollar home around $5,000. you do the math. Peanuts.... My math skills are fuzzy at best.......

      Delete
    8. $50 a month times 12 months is $600 a year. Let me guess, you're Steve.

      Delete
    9. No but I am exempt from UUT. I want a property Tax exemption also
      50X12= 600 I spend more at Starbucks!!

      Delete
    10. Josh Moran used to compare utility taxes to the prices at Starbucks. Given the ridiculous prices Starbucks charges, I'd say the comparison is a good one.

      Delete
    11. Just another of the many reasons the UUT measures lost. Twice.

      Delete
    12. I don't buy coffee at Starbucks. Let Josh pay the UUT.

      Delete
  12. Captain Obvious... how did you arrive at the 21.9% return to Sierra Madre? Thanks.

    ReplyDelete
    Replies
    1. Excellent question, alert Tattler Reader!

      The 21.9% share that the City gets out of the total Property Tax bill is set. (Don't know if it is due to regulations, laws, etc. - the Captain doesn't want to get into the weeds.)

      It's pretty much always around there - with a minor fluctuation of less than 1 percent.

      Delete
  13. Thank you Capitan...

    ReplyDelete
  14. The three mousequiteers don't want to hear about increased revenue. They want to hear about increased taxes. Delmar and Arizmendi had a perfect solution to the problem without letting go any employees and maybe increasing the morale of those here. Would you like to work for a company that continually makes threats of budget cutting to the point of having to lay off employees?

    ReplyDelete
  15. Despite what the 3 Dudes might say, hostage taking is not a good HR tactic.

    ReplyDelete
  16. 12:10 if that is so, wouldn't that give city employees 2 options? Finding another job or working with the citizens by taking less perks? I don't see any of these stressed workers asking for some kind of compromise to help the situation. Without cutting more city services, which is what they're supposed to be about, the big option is cutting top heavy departments and cutting salaries of the top tier and their obscene perks.

    ReplyDelete
  17. Isn't it amusing that none of the "I Like Big UUTs" crowd has found fault in the Captain's research?

    Focus, Tax ME Crowd, Focus.

    ReplyDelete
    Replies
    1. You were not suposed to know this. Now you will get lots of tickets.

      Delete
    2. (crickets chirp)

      Delete
  18. Just so everyone into the Texas vs. California fight knows. The first case of Ebola in the United States happened in Texas.

    ReplyDelete
  19. 1:21, you missed the point. There are several staff members who have been working for the city for a long time and are experienced which means less money spent training new employees. They like it there not because of the perks and high pay, but for being able to work in their community. They will stay if some of those perks are cut and that is what Delmar/Arizmendi are banking on. This alleviates the unknown of in two years, they might get laid off, although that is no guarantee. I'm banking on increased UUT fees coming from Edison, Gas Company, Time Warner, etc. plus the property tax increases to sustain our budget.. The three guys seem to think only a 10% UUT will save it. That is nuts.

    ReplyDelete
  20. Those of you who are stuck on thinking that the only way to solve the budget problem is to fire all the city hall staff and disband the police department are just as guilty as the three council guys who are stuck on keeping the 10% UUT as the only way to solve the problem. There can be other ways if one has an open mind.

    ReplyDelete
    Replies
    1. Actually with all of that new property tax money nobody will have to be fired. Costs will need to be trimmed and those crazy health care plans cut radically. But I don't think anyone is talking wholesale slaughter here.

      Delete
    2. They never were. Except THE LIBRARY WILL HAVE TO CLOSE.

      Not really. Do you like my Rob Stockly impression?

      Delete
    3. As they might have said in the pre-digital age, Rob Stockley sounds like a broken record.

      Delete
  21. The City Manager gets to set the tone of the meeting. I don't remember voting for her. Did you?

    ReplyDelete
  22. Elaine is doing her best to make sure there is not enough money, even with all the property tax income.

    ReplyDelete
    Replies
    1. She's throwing the Tax Me 3 a bone for them to gnaw on later.

      Delete
    2. The property tax part Elaine just spoke about was "a little additional information." In other words, it was left out of the staff report, but for some reason people needed to hear about it.

      Delete
    3. Once again, the Tattler drives the council conversation

      Delete
    4. They can run but they can't hide.

      Delete
  23. Goss is hoping for some bad financial news so he can justify putting the UUT back on the ballot.

    ReplyDelete
  24. John Capoccia was against the UUT before he was for it.

    ReplyDelete
  25. Do the damn decreases already. The people voted twice and said they wanted to decrease the UUT. Denise is right. Fiscal responsibility.

    ReplyDelete
  26. Good job Denise. Hold the council and staff feet to the fire. they knew the decrease was coming, yet they refused to plan for it. As I recall Koerber was the only Councilmember to vote NO on this last budget because he felt it did not address reductions enough.

    ReplyDelete
  27. Goss wants to try and raise taxes again.

    ReplyDelete
  28. Earl Richey exists to make Bruce Inman sound competent.

    ReplyDelete
  29. Gene Goss is either stupid or a liar or both. If we had the sheriff in town they work for the city and thus a citizen can come to city council and complain. hey will not have to go to the supervisors meetings

    ReplyDelete
    Replies
    1. Goss wants to raise taxes so bad he's practically bleeding.

      Delete
    2. Mr. Tattler,
      Isn't it interesting that Council is finally focused on spending less. Only took two UUT defeats.

      Can you hear me know?

      Delete
    3. I'm not convinced that it is for real. At least for a couple. Goss is dying to raise taxes. Harabedian is a union guy and in the end that is where he'll be. We're in the Kabuki Theater stage here.

      Delete
  30. It appears that there are several comments this evening. Does anyone have comments as to reducing city expenses? If so.. Let's share them .

    ReplyDelete
    Replies
    1. I think we should start by reducing question comments.

      Delete
  31. Goss got kind of grouchy. "I understand everything," grumped Gene. Know full well that most regard him as being the dumbass on the council.

    ReplyDelete
  32. Goss got kind of grouchy. "I understand everything," grumped Gene. Knowing full well that many regard him as being the dumbass on the council.

    ReplyDelete
  33. Goss was endorsed by John Buchanan

    also Harabedian

    ReplyDelete