The amount of money it will take to pay the interest only 2003 water bond debt racked up when Stockly and some other equally careless and irresponsible individuals were on the City Council would today pay all of the costs associated with maintaining Sierra Madre's at risk library more than 8 times. Or, to put it in another big number way, we would not have to pay a dime in Library costs until the year 2023. Unfortunately for us, it is all going to the Bank Of New York instead.
Have you ever wondered what kind of cerebral dysfunction it took to lock this city into $6,750,000 in water bond debt, and then somehow decide to make interest only payments on the principal until 2020? Without even paying off even $1 of the original amount until 17 years later?
I am not sure I know the answer to that. Or at least I cannot quite find the words to describe my reaction in a family friendly manner.
Here is another question. What exactly is the cost of all that debt and interest to the people of Sierra Madre for the $6,750,000 2003 water bond? That I can answer for you. The combined figure is $14,925,486.00. In other words, due to that unique repayment schedule Sierra Madre's tax and water ratepayers will have ended up paying way more than double the cost of that 2003 water bond once it is finally retired in 2034.
To be exact, that would be 31 years later, and at a total cost in interest debt service alone of over $8 million dollars. Talk about your mad stacks from sad sacks. You could have bought 4 entire libraries with that amount of money and still had something left over for a firetruck.
According to City Hall the total cost for maintaining the Library last year was $804,000. According to the consultant Raftelis, the folks who steered the City Council through its latest round of water rate hikes, the yearly cost in water department debt service is as follows.
Or nearly $200,000 more than the yearly cost of running the Library.
About two years ago City Hall issued a report titled Debt Administration. It makes interesting reading, and can still be found on the City of Sierra Madre website if you look hard enough. In case you haven't seen it yet, here are the bizarre dollar figures associated with that ill-fated 2003 water bond.
I would hope that the Water Department's outrageous bond debt, much of it brought about by the borderline crazy decision to make interest only payments until 2020, would start coming up in some of the budget outreach (or is that input) meetings now taking place.
Water bond debt service costs more each year than what it costs to run Public Works, Planning, Community Services, and, of course, the Library. All of which could see their budgets cut, or even go away altogether.
As this city begins to make its decisions on where and what not to cut, maybe people could take a second to reflect upon what that squandered $8 million dollars could have saved from the chopping block.
That decision to make interest only payments on the 2003 Water Bonds until 2020 could go down as one of the worst ever made in this town. The consequences are not only still being felt today, but also being paid for as well.
Graphics courtesy of Raftelis
Here is a question for you. Note the difference between what water ratepayers in Sierra Madre pay versus what those in Arcadia pay. Since traditionally the water used by these two cities comes from the same place, why the huge difference in money charged to customers?