Thursday, August 10, 2017

Last Night's Sierra Madre Water Forum Was Not Too Bad

".22 cents out of every water dollar goes to debt." - Gabe Engeland

You need to learn about perspectives if you want to get things right. Put yourself in other peoples' shoes and look at it all through their eyes. To mix up the metaphors a bit. And at a packed Hart Park House last night, that is what this was all about. Water and perspectives.

There were a lot of people there who were quite upset about how much they have to pay for water. And when you consider that they have been paying upwards of $1,600.00 for that irreplaceable wet stuff, they do have a pretty good point. These are very real, and obviously quite unfortunate, events in their lives. Intolerable events. But that isn't quite how I see this. Sympathetic though I may be.

From my perspective what they were talking about are the consequences of some pretty bad decision making from a long time ago. Likely way before many of them even hit town, so why would they care? They just want these water problems solved so they can then move on. Pipes, crazy billing and everything else. That is what most of the folks there last night were looking for.

That is what the city hopes to do as well. Plenty of agreement on that. There are now new people running City Hall, and they really do want to get past all of this. They have to. It is expected that they do so, and after all it is their job.

I want that to happen, too. It's just that there is a little business that I'd like to see taken care of first. I want to solve the mystery of how things got to be quite this bad. There is a deep and rich history here. What is going on today is the direct result of events that happened when I first got involved in the political and governmental affairs of Sierra Madre, and still am today.

It's why I started this blog. Think of it as crime solving. Detective work. And since it is my blog, that is how it will have to be. If you don't like it, well, go and read something else. No hard feelings.

Here's the deal. Back around 2006/2007 there was something called the Downtown Specific Plan (DSP). Certain politically connected individuals, some of them the actual politicians themselves, plus more than a few suckers I must add, were going to turn downtown Sierra Madre into this big, and quite atrocious in my opinion, development project. Blocks of that funky downtown area we have all grown to love were going to be torn down and replaced with a kind of generic three story mixed-use okey dokey kitsch that typifies places like, say, Rancho Cucamonga. Or a million other equally indistinguishable California towns. Take a ride on the 210 Freeway and check it out.

Millions of dollars were invested by people who believed they were going to make a lot of dough off of this development scheme. Plans were made and all that remained to be done was get everything approved by the city, and then built.

Except there was a problem. The majority of those living in Sierra Madre didn't want it. They liked things just the way they were. And to stop this Downtown Specific Plan they put something on the ballot called Measure V. An initiative that, once passed, would make building the DSP legally impossible. And despite the hundreds of thousands of dollars spent by Sacramento based organizations such as the BIA and CAR (look them up) to defeat it, Measure V passed. It remains the law in downtown Sierra Madre today.

So where does this leave the water bonds that are such a financial disaster for Sierra Madre now? Here is where some of that mystery comes in. In 2002/2003 the City Council decided to issue a $6.75 million dollar water bond. The theory being that this was necessary for what would soon become known as the Downtown Specific Plan. The water infrastructure at that time not being adequate for the kind of bumping big development project they were planning for downtown.

They didn't really have the capital needed to float this water bond, but it didn't matter. Once the DSP was built there would be enough tax money flowing into the city's coffers to deal with it. They linked their water bond to a Federal grant and built some fine water tanks that are still in use today. They even have water in them.

However, when Measure V passed, the Downtown Specific Plan died an unhappy death. And since there would be no mighty tax bounty raised from the now defunct DSP, the City Council at that time had no money to pay for their $6.75 million dollar water bond. Meaning the interest only payment arrangement they put into place on what was hoped to be a temporary basis had to be left as it was. All the way to the year 2019. Which at the time must have seemed like a long ways away, but now no longer is.

Because of this large amount of unnecessary debt there is today far less money to replace the rusted out and leaky pipes that were discussed at length at last night's water forum. Or anything else for that matter. The hands of the city have been financially tied for a long while, and the consequences are obviously still with us today.

From 2020 to 2034 the City of Sierra Madre will be forced to pay off in excess of $640,000 in bond debt every year. More than double what the city has been paying in interest-only payments up until now. And because Sierra Madre's water bonds are rated junk by Moody's (how could that be otherwise?), no matter how the deckchairs on the Water Titanic are rearranged that bill will still need to be paid pretty much as is.

That is where your water use penalty money is going. And other money, too. No new pipes for you, cowboy. Prepare to cough up.

We'll have more on all of this in a few days. Including how the SGVMWD charges Sierra Madre much more for its water than some of the other area burghs. There will also be an intriguing conspiracy theory about how certain City Councilmembers back in the day were not only responsible for the 2002/2003 water bonds, they were also DSP investors.

Which, if ever proven true, would be quite a story.

sierramadretattler.blogspot.com

57 comments:

  1. It sure was Hot at the Hart House last night, literally. I think the City was trying to save money by not holding the meeting in the council chambers and spending all that money for electricity. Oh, and not having to run the video of the likes of residents not being happy with water bills in excess of a thousand dollars. We residents don't mind paying our fair share but get real here, $1600 for mistakes made by past government officials trying to push their personal agenda and a City Manager bent on doing it her way and not listening to the residents who pay the bills. I did like how the Mayor got involved a couple of times and said she too was pissed at what had been happening. My respect for the Mayor and the new City Manager went way up. Even the Mayor ProTem spoke of a more promising future now.

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    1. Yah, yah, yah. Maybe the Mayor was pissed but she voted for the 10% UUT when she promised not to raise taxes. Maybe she is pissed because it's all crashing down on her watch. I loved her remark "We'll have to revisit the fines". She voted them in , didn't she? Yes she did, as I was at the Council Meeting when she did!

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    2. Her Honor couldn't shut down the bond debt conversation fast enough last night. Only time she spoke. I wonder why.

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    3. Yes, and she was quick on her twinkle toes to toss the baton back to Gabe. I personally think they were a little nervous as they didn't have the City attorney present. Expecting only 10 or so people, why would they need an attorney?

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  2. Thanks Mod, great reporting. All the news that's fit to print as other outfits would say. Keep up the great work!

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  3. Was the Mod there last night?

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    1. Yes. Didn't want to miss all of the excitement.

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    2. Were you there, 6:36?

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  4. The entire city council and city hall management bent over backwards to make sure everyone who attended last night meeting was given a good dose of 'Jim Jones' Kool-Aid
    to sooth all those nervous voting residents - Lies, all lies - CYA was spread thicker than ever before!

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  5. Legally exciting would be a celebration; me thinks these scandalous few have covered their butts.
    The development of the Kensington paid off the LLC investors.
    The Measure V initiative was conceived by a few good men and women and some past politicians, as a way to save the downtown area. Fortunately, the DSP investors were less convincing spreading lies to the uniformed public and Measure V passed; or 2-30-13.
    The arguments for the building of water tanks; while so many leaks were happening, never did pass the smell test.
    Tugging on the coat tails of the water and development debaucle, lets just say that the County owes a favor or two back to Sierra Madre, so the trip back to Washington DC will be a trip well taken by the new crew in the water department inorder to bring back some good news.

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  6. Thanks goes out to those on the Council that were instrumental in bring in new City Management.
    Majority of the rotten apples in the city have moved on with their lives, but we all know that one spoiled fruit can effect the rest.
    Remain vigilant.

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  7. Who knows how much water is wasted due to leaks each year. Sad!

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    1. Feel free to correct me Mod/ anyone, but I thought I heard Gabe say 21% of the City's water was lost through leaky City pipes. The plan was to fix the major (top ten) leaks. Three major leaks had been fixed already, the City planned to do 4 more repairs this year. Hopefully those 7 repairs would correct 85% of the City's water leakage. The difficulty when repairing pipes is that the old pipes adjacent to the repaired/replaced pipes are then more stressed causing them to break/leak. So it is a never ending problem until all pipes are replaced.

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    2. Under the old regime we were told the city could not tell exactly how much water was being lost to leaks. This was unfortunate since at that time we were at risk of being fined ridiculous amounts of money by Sacramento for not conserving water. Therefore all the.blame fell on the residents.

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    3. 10:53, yes, blame the residents and implement the "forever" fines!

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  8. We were there all right. Hot, humid and very crowded indeed.

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  9. The Q&A format worked. Much more effective than what we usually see at City Council meetings. It might have been hot, but a lot of people got to speak their minds. Both sides learned a lot.

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    1. I agree, I really liked the Q & A format. Direct answers were given without the baloney and it didn't cost us a con$ulant! $$$

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    2. Kind of cathartic.

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  10. It was quite a contrast to those poorly attended meetings Elaine Aguilar used to hold. You didn't have to write your question on a card and hope it got approved. People got to speak their minds.

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  11. .22c out of every water dollar goes to debt. That is now. What happens when the bond payments double in 2020?

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  12. Thank you, Mod. It's a grim story, but somehow the better for being openly told.

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  13. The City Manager spoke about refinancing the bonds. Yet with Sierra Madre's water bonds rated as junk, how can that be accomplished?
    https://www.moodys.com/research/Moodys-affirms-Ba1-on-Sierra-Madre-Water-Enterprise-CAs-water--PR_325485

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  14. This comment has been removed by a blog administrator.

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    1. Learn to speak the language of love.

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    2. The quality of mercy is not strain'd,
      It droppeth as the gentle rain from heaven
      Upon the place beneath: it is twice blest;
      It blesseth him that gives and him that takes:

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  15. The new city manager, what a responsibility but what an opportunity. The question is if he can pull us out of this mess with the money we already pay or is another tax on the way?

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    1. Gabe will be the Rescue Rooter of City Managers.

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  16. It was great seeing you at the meeting last night MOD. And thank you for the explanation of how we got in this mess. For the first time I Now understand how they downtown specific plan and the interest only Bond payments are tied together. With your knowledge of Sierra Madres history and your ability to explain things in an easy-to-understand way is what you do best. Thank you.

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  17. For those of you not in the know, our dearly beloved ex manager is now the Interim City Manager of South Pasadena. Good luck to our neighbors. Elaine's job description literally describes her as the CEO of the town.

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    1. Maybe she'll take some of her people with her.

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    2. That big fat check every month from CALPERS was not enough!

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    3. The more jobs you take, the more CalPERS you get.

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  18. Forensic audit, please.

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  19. SEEEE, it's past time to review retirement plans. Things have changed, it's a whole new world out there and we tax payers need to stay informed and involved.

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    1. Can't something be put in a contract that if they retire and go to work somewhere else, that money is deducted from their pension?

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  20. Maybe she has seen the wrongs of her ways and will be good for South Pas. Good luck to our neighbors to the west.

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  21. Maybe the down town investment club has already moved there operation to SP.

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  22. Beware of those who claim to be prosperity givers for they too are set on destroying the whole of the city - one lie is all it takes and then it's down hill from there! Remember they work for you and not the other way around! If they do not work out then fire them all until you find the right combination of folks that are not afraid to tell you the truth.

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  23. I was surprised to see an overcapacity crowd last night. It was delightful to see residents finally get involved in the local politics. Could it be that the sleeping bear has awoken?

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  24. Thank you Glenn for your passionate comments regarding Commercial water users/abusers. Also liked your comment regarding having the meeting televised in City Hall rather than non televised at the Park House. So much information was given last night, I wish I could watch last nights meeting several times.

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  25. Interim managing just means thst Elaine will push the papers around on the desk in So. PAS. until a manager can be located.
    Doesn't the Colunto Law Firm represent So. PAS.?
    Birds of a feather.

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    1. Pretty much like Bruce Inman in Bradbury. Keeping the seat warm until they find the City Mngr they want.

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    2. We should find a new city lawyer. Take a look at the warrants sometime and see how much that firm makes!

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  26. 10:33, You mean keeping the $eat warm until they find...

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    1. Government work pays very well.

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  27. Loved the comment from the man standing next to me regarding the principle paid on the bond loan:
    "4 million dollars interest paid on a 6.75 million dollar water bond loan?, those are LOANSHARK RATES!

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    1. The actual interest from day one is over $8 million. What do you call that?

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  28. Excellent background for us. Thanks. You know, if a town has to go THAT far out on a financial limb just to show potential investors it can build the infrastructure to support a cash cow development, maybe that's a neon sign that the development is a poor match in the first place.

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  29. A retired resident complained of the poor service at the Pool. The Pool was outsourced a few years ago. Resident said they are not very friendly with the locals and were downright nasty. Mr James Carlson, from the City said he would personally check into the matter. Mr. Carlson was the Pool manager for many years and was saddened to hear of the complaint.

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    1. They told me it was not my community pool it was theirs. Very nasty rude people. I haven't been back for years I will not support their company or investors. I assume I am paying their water bill as a taxpayer in Sierra Madre,probably utilities and insurance also.....

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    2. They wouldn't let me see the memorial brick I paid the city for in memory of my parents. Anybody know if the tore them out?

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  30. What about that Arcadia? Subsidizing their water bills to the tune of 18 million bucks do they can keep them artificially low. I wonder if they are using sales tax revenue or property tax revenue.

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    1. That's OK. Sierra Madre residents are subsidizing the SGVMWD.

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