Monday, May 8, 2017

Is Sierra Madre City Hall Telling The Entire Truth About Its Latest Proposed Water Rate Increases?

"Why sure! It is about residents not using enough water. Just like Measure UUT was about the library and not CalPERS debt. C'mon! Play along! You don't want to be uncivil, do you?" - May 7 reader comment

Thanks to the help of some good friends I have managed to get my hands on the Staff Report for Water Rate Increase 2017. Which is somewhat different from Water Rate Increase 2011, or Water Rate Increase 2014, though the spirit remains the same. While it actually is possible to access this report on the City of Sierra Madre website, it does take a little doing. I'm sure they'll get all of that fixed today. I can't imagine there is any other explanation for making access to this report so difficult other than simple human error. And isn't that why they put erasers on pencils?

Here is how the report kicks off.


As most readers here are aware, Raftelis Financial Consultants is the company the 2014 City Council hired to help them push through the previous water rate increases. And while the 2014 hike was marketed as a kind of final resolution of the city's water revenue woes, and for years to come, that turned out not to be correct. The result being Raftelis will get another shot at getting this right, and it will only cost residents of Sierra Madre $74,025 for the kindness.

There is a reason for this, of course. There usually is. City Hall is never wrong, though they do seem to have more than their share of bad luck. This is how the rationale for Raftellis II is being rolled out.


While I am sure there is some truth to all that, is it really the entire truth? After all, the pipes were leaking in 2014, too. And didn't the drought in question actually begin in 2012? Here is a link to an article that explains that controversial drought dating issue.

There is another reason why City Hall has to raise water rates again, and that is water bond debt. The city hasn't discussed this much, probably because it would embarrass a few old mayors still hanging on in town.

What happened is the City of Sierra Madre, and for whatever the reason (I like the "Failed DSP Theory" myself), rustled itself up around $6 million dollars from water bond sales back in 2003-2004 so they could build some big water tanks and other related stuff. There was also a matching Federal grant of some sort, which I guess was nice and all. But the temptation of all that free money did cause these golden oldie Mayors to make one quite colossal financial mistake. The consequences of which are about to fall upon the water ratepayers of 2017.

In short, these daft duffers decided it was really good fiscal policy to make only interest payments on their water bonds. Not one single dollar has ever been spent to pay down the principle. Think of this as only making the minimum payments on your credit card debt, and for the next decade and a half. Eventually you will end up having to pay a lot more money than was actually necessary.

Here is a breakdown of how this is all working out for you. The following was put together at the behest of then Mayor MaryAnn MacGillivray. No Mayor since has even dared to mention this. So I guess it is a kind of secret. Certainly Raftelis has never brought it up. They know where their bread gets buttered.


As you can see, by paying only the debt service on this 2003 water bond the cost of all that interest now exceeds the actual value of the bond itself. And by well over a million dollars.

Another other thing that should jump out at you is that the payments on the bond principle start in 2020. Which not coincidentally would fall within the next series of water rate increases. The ones that this City Council will start working on tomorrow night at 7PM in council chambers.

You get all of this, right?

Hopefully this City Council will find it within themselves to fess up. Even if it does upset good old Bart Doyle.

sierramadretattler.blogpsot.com

43 comments:

  1. If you had gone ahead and hired the L.A.C.S.D. then Sierra Madre would have had more money to pay down it's other debts and not had to increase taxes.

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  2. The same handful of old white dudes have run Sierra Madre for years. If they don't want the city council to talk about water bonds, they won't.

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  3. The hiring of Sheriff's wouldn't have saved the day! Get real.
    The "old dudes and dudette's" of this town have milked city hall; most have moved on.
    The high amount of CalPERS payouts, were again from "old dude bone head" decisions, that changed the older retirement investments to a more lucrative payout, for "our" overworked city employees.
    When will the city elect a council that is looking out for it's residents?
    When "real" issues have been included in discussion on council, uncivil is the word brought up; again big money backers of DSP, Library and from the Civic group.
    Politics have always led this town, not common sense and looking out for residents.

    ReplyDelete
    Replies
    1. Hiring Sheriffs would have saved money. Maybe it wouldn't have been a silver bullet, but this would have contributed. Sadly many Sierra Madreans have a childlike attachment to irrational things and are easily manipulated.

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  4. The City of LA, kicked off a new money maker venture, the collection of waste water.
    Charge the homeowners for water both coming and going. Gotta love the politicians "we"have voted into office!

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  5. Drain the swamp and get rid of the bad ones! Tell the truth and get rid of all new pensions and cadalic Heath benefits!

    ReplyDelete
  6. Not a very flattering picture of John Capoccia.

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    Replies
    1. Cappy can be a bit of a pepperpot at times. Anyone know who he was thumbing at in that picture?

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    2. John C looks far better than the Bartster.

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  7. Any cash savings from LACSD, would have been spent on more Consulting ventures.

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    Replies
    1. Probably. City employees have one priority. Funding their pensions. Everything else is pubic relations.

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  8. Is it just me, or did the three guys on the City Council hold off on discussing water rate increases and the next round of tax hikes until the two women became Mayor and Mayor Pro Tem? Why didn't Casper the Friendly Goss agendize any of this when he was Mayor?

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  9. Some in town want to "payout" CalPERS at a huge increase, by incorporating the Sheriff Department. This town is racing towards Bankruptcy, without escalating the demise.
    Its bad enough to be TAXED, TAXED,TAXED.

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  10. Friendly Goss tries, Casper craves attention.
    Possibly the Women will address the very real facts of zero paydown on City IOU's.

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    Replies
    1. I'm counting on Denise to bring all of the elephants out into the open. I personally think she is fed up with all the BS and is going to lay it all out for all to see. Sierra Madre is drowning in debt and all we get are lies and postcards. Capoccia is a fool.

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  11. wow a happy bunch today aren't you all? Time enough to blog but not enough to sign up to get involved?

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    Replies
    1. Terrific, but non-specific?May 8, 2017 at 9:31 AM

      Sign up? What do you recommend?

      Delete
    2. Sign up to hand out flyers, toughing the accomplishments of this council and all that the city offers; not mentioning that "we" citizens are paying double out of "our"pockets because of "our" zip code.

      Delete
    3. I'm tired of walking door to door and working for the great lethargic majority in town.
      Maybe it's a good time to sell.

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    4. There are people moving into Sierra Madre, paying a lot of money, and they have no idea of the financial jeopardy the town is in.

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    5. Shame the people who have been here so long let it get so bad

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    6. You're right. In particular I blame the many Walsh voters.

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  12. Forensic Audit out of question?

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    Replies
    1. Brought up often through the years. The books were actually straightened out during the last financial director's term, and going back beyond that, there's the claim that there were 'sensitive' legal issues involving disgraced ex-employees, and law suits.

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    2. Yeah, but people were let off the hook. Nice that the books were tidied up and all, but who put this city into such deep debt? What are the reasons? That story has yet to be told.

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  13. The tattlerand all the other messengers presented the wastfull spendin some 10th years ago, but no one seemed to care.the first year wasn't so bad, but it's now year after year. I agree with the previous post, drain the swamp!

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    Replies
    1. At this point I'd be willing to allow the city to confess its debt problems and be done with it. The city has never been honest about this, and if properly revealed I am sure the residents of Sierra Madre would be willing to kick in and save the place. But we do need to know who is responsible and why they did the stupid things they did.

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    2. Senate hearing underway reguarding Russian Interference, BUT not under oath.
      More lip service at tax payers expense, another excuse for Senators to waste a working day.

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    3. Trump is a traitor. Go Sally Yates!

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    4. Is it time for another Banghazi investigation?

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    5. Definitely. But please, lock Trey Gowdy in a closet first.

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    6. 12:46pm. Why pick on Trey? Are "you" outting him? Yates appears to have perjured herself, opp's.
      Clapper continues to say, I am not "working" anymore, so Iam off the hook!

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    7. Thanks Comrade. What else are they telling you on Russia Today?

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  14. I agree. Most of the "old boys network", have bulked up, taken the money and run.
    We have a new Manager; let's have a fresh prospective on establishing what priorities need immediate attention and a cost analysis.

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    Replies
    1. Old boys network?, Don't think so, all these big hirelings are Masons with 5 year plans and Agnda 20-30. They have been running Sierra Madre for years. Look at the cornerstone of City Hall! They have their hand in everything.

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  15. Alleged Russian Interference. Did comedian Big Al, just confirm President Obama knew of "masked" conversations and attempted to "warn" President Trump on the hiring of General Flynn?

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    Replies
    1. Flynn is a traitor. So is Putin's orange rooster holster. Try and stick to the real issues, comrade.

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    2. Tattler Troll got trumped again today

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    3. The Obama adm. did warn the Trump adm. about the traitor Flynn they also fired him. Of course the president knows about masked conversations. Are you mentally challenged?

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  16. They are still asking for an ID and password to view staff reports on the city's website. Why?

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  17. So the Obama administration says they warned the Trump administration,about Flynn,the Trump administration says the Obama administration warned them about Flynn And the Senate says the Trump administration was informed. So you believe Russia?

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  18. The Trump Wing at Leavenworth is going to be filled with all sorts of interesting characters.

    ReplyDelete
  19. Trump Troll read this headline from RT
    https://www.rt.com/usa/387614-clapper-yates-flynn-russia-hearing/
    That's all the fool read,failed to even read the RT article that goes on to contradict the headline.

    ReplyDelete