So the answer to 7:34's question is yes, it really is true. Through the magic of the Freedom of Information Act I did actually obtain a copy of the paperwork for those 2003 Water Bonds that are wreaking so much havoc on the Sierra Madre Water Enterprises' finances. If you would like a copy for your very own feel free to email me at firstname.lastname@example.org and I will gladly send one your way.
For those of us who traffic in political personalities, what follows is a smoking gun.
Here is how Gabe Engeland, the current Sierra Madre City Manager, describes the deleterious financial effects being created by those bonds nearly fifteen years after their inception.
Tattler: At the Water Forum you said something like one dollar out of every five water department dollars goes to paying for debt. Do I have that right?
Gabe Engeland: I believe the current year number is .22 cents out of every $1.00. This number will decrease over the next few years and will settle below .20 cents out of every $1.00. It looks like we are going to have an opportunity to restructure some of the most damaging debt, which would reduce this calculation, but I haven't had a chance to review the final debt restructuring proposal. I hope to have these numbers early next week.
Fabulous. 22% of all the revenue available to the Water Department is currently going towards paying debt. Not rotted rusty pipes, not infrastructure, not aquifers. Debt.
This was brought about in large part because those 2002 City Council members listed above somehow decided that paying only the interest on a $6.75 million dollar water bond for more than a decade and a half would be the really clever thing to do.
Are there any more questions?
Well, there is this one
Tattler: Figuring that Sierra Madre's CalPERS exposure is somewhere in the $10 to $40 million range (depending on who or what you're talking to), how many dollars out of the General (or any) Fund goes to paying for all that CalPERS debt?
Gabe Engeland: At the peak in 2020-21 I believe CalPERS will be our 2nd or 3rd largest department. We will spend more General Fund dollars on CalPERS than any other service outside of public safety. After 2020-21 the numbers should reduce a little, but will still be a substantial portion of the budget.
Public Safety, which is Police and Fire, represented around 59% of all General Fund dollars in the 2015-2016 budget.
The exact CalPERS percentage numbers I asked about were not available at press time. However, this most transparent of City Managers said he would get that calculated and over to me in the next week or so. Can you believe it? I will post those numbers just as soon as I get them.
But here is the thing. In 2020-21 Sierra Madre will owe some banks back east in New York around $640,000 for those Water Bonds. And it isn't just that year alone, but for every following year up to and through 2034 as well. For the exact number link here and scroll down.
2020-21 is also the same year Sierra Madre will be at its peak payment schedule for CalPERS. A number that is not completely calculated out yet because no one knows for sure how much money CalPERS is going to lose. For that year and the many more after that.
Any shortfall in CalPERS' investment returns has to be made up by the individual cities. This means it will need to come out of your taxes, which will need to be raised again. Just in case you've ever wondered what Measure UUT was really for.
Kicked can? Meet the ever loving wall. Back in 2002 those knuckleheads apparently believed this day would never arrive. It is now very much in view, and you are going to be expected to clean it up. Bring your checkbook.
The worst financial effects of the worst City Council in Sierra Madre history are only now really beginning to be felt. It is going to get a lot worse before it gets better, and it will take more than a decade to play out.