Sunday, April 24, 2016

Sierra Madre City Hall's Continuing Slap Happy Water Bond Shenanigans

It is kind of an ongoing story, but one that City Hall can never quite bring itself to talk about. Not that you can blame them, of course. And they do have to mention it from time to time. After all, if the city is paying hundreds of thousands of dollars in interest only water bond debt payments every year, there is no real way that you can hide it. Or at least you can't do it legally.

But you can agendize this matter for when you think that nobody will be paying any attention. And wouldn't Tuesday evening's City Council meeting be a really good time to do such a thing? You know, while all of the usual assembled worthies are busy happily congratulating each other over jacking up everybody's utility taxes?

Here is the agenda item.


Remarkable, right? "The Water Fund 2003 Revenue Bonds are interest only until 2020 when the 1998 Refinancing Revenue Bonds are paid in full." This bizarre financial arrangement is costing the city millions upon millions of dollars in interest that it didn't really have to spend, but what the heck. You can always raise everyone's water rates and taxes again. Those are near-annual events anyway, so what's the panic?

Of course, if you actually wanted to really dig into this matter, the city has included in its agenda report the following link. A little something that could give you the opportunity to do some due diligence.


So what do you get if you follow that link? What "comprehensive annual financial audits and biennial budgets" are then revealed to you?

None, actually. Instead you get this.


Congratulations, Sierra Madre. You have the government you voted for.

Just in case you are wondering, this sort of thing does have an effect. Should Sierra Madre ever decide to refinance its upside down water bonds, the interest rate the city would have to pay would be high.

Here is why (link).


But like I said, all City Hall has to do is just ask the residents for more money. You know, tell them its for the Library, or something. They're pretty naive and fall for that sort of thing every time.

sierramadretattler.blogspot.com

37 comments:

  1. I don't know what the problem is. That link worked a year ago!

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  2. It's a process.

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    Replies
    1. It's for the Library.

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    2. Trim the trees!

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  3. I called the city transparency office, but they've been closed since Thursday.

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  4. So what else is new?

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  5. Business as usual.

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  6. A broken link? You got nothing better to do today? Cut and paste some Brandenburg stuff or sumpin'

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    Replies
    1. See if you can't get someone to read you the Moody's Report.

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    2. That was a nice addition to your post albeit a bit tardy. :)

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    3. I was going to run it tomorrow, but then I figured what the heck. Good thing about being an on-line news source is that stories can evolve to suit the needs of the commenters.

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    4. 9:26, goodness forbid that I click on the link to learn more about the city's shenanigans, huh?

      You know, since I pay $7,000+ in property taxes a year and come 7/1/2016 will pay the worst UUT on the most utilities in CA? Not to mention ANOTHER water AND sewer rate hike on 7/1.

      Don't be a dumb ass.

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    5. Lots of dumbasses in this town. Measure UUT proved that.

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    6. think i'll go water my lawn 926. then i'll water yours, too- albeit with my tax free hose. xo/tb

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  7. One last time for Mayor Capocchio to set the agenda for a city council meeting, and he stayed true to form. Nice.

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  8. Interest only vs refinancing at a high interest rate?

    Sounds like a win-win for many:

    W - Gripe about interest only
    W - Gripe about high refi interest rate

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    Replies
    1. Um, the millions of dollars that are being spent on interest only payments on the 2003 "DSP" water bonds is not a win. This does nothing to pay down the principal and only profits the Bank of New York. Would you like to buy a water tank?

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    2. Methinks the point eluded you 10:53.

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    3. Methinks you were wrong and don't care to admit it. That is OK. Soon there will be many just like you.

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    4. 11:05 It is about the library.

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    5. OK 10:53/11:44, let me 'splain it to you. The point was that no matter what occurs, many will embark on their favorite pastime: griping. Now get off my lawn!

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    6. Griping about griping is still griping.

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    7. How's this for a gripe? City councils and city staff have never admitted to horrendous mistakes.
      The water bonds were terrible decisions, and anyone who has taken econ in high school could have made better decisions.
      Going into cahoots with a disreputable developer over One Carter was another terrible mistake, and that council has never owned up to it or apologized.
      Shameful, expensive destructive mistakes, and nothing but an "Oh well" from the people who made them.

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    8. Who approved CalPERS?

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  9. 10:47, if interest only is such a win, what about if we pay them off?

    Hope your head didn't explode.

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    Replies
    1. Good idea about paying it off. But then you'll gripe about it. See, you win again!

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    2. The 2003 bonds get paid off sometime in the 2030s. The griping will have to be continued from the grave.

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    3. Then you won't be paying your share; another generation will. You win again!

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  10. We don't have enough $ to pay on the principal of the 2ND bond till we pay off the 1st mind, but wait, there's more. The city council will ask us to approve another bond or parcel tax, in 2018.

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  11. another water main leak, on West Bonita, heard the jack hammers and went out to investigate.

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  12. It would be the best plan to stop the shenanigans and fix the pipes that have been ignored for decades. The water enterprise finances went to support other stuff throughout the city. It is TIME to repay the fund and use that money (replaced theoretically) towards what it was supposed to be for in the first place. Infrastructure!

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  13. Keep in mind that if we begin paying the 2003 bond principal in 2020, we'll be using 2020 dollars that are worth less than 75 cents compared to 2003 dollars.

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    Replies
    1. Strangely uncomforting.

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    2. Yes, for many it will be a loss because it's hard to gripe about paying a debt with dollars worth less than the dollars received.

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    3. About $5 million dollars worth. Don't forget to include the volume.

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    4. 7:51, Jimmy Carter ain't President and inflation ain't 18%.

      It is stupid to pay 5.5% (double tax free) thru 2034 when interest rates are near zero.

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    5. 4:51 Even one or two percentage points of inflation per year cumulatively adds up to quite a lot over 17 years.

      If inflation had been 18% per year for those 17 years and incomes kept up with that inflation rate, the $6.8 million bond principal would barely be noticed on the city's financial reports and could easily be paid off. Heck, a score or so of median income residents (whose income kept up with the 18% inflation) would be able to pay off the bond as a gift to the city.

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