Saturday, September 2, 2017

The Bonds That Ate Sierra Madre's Water Enterprise

Mod: Yesterday in the comments there was this most brief yet telling of exchanges.


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 sierramadretattler@gmail.com 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 EngelandI 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.

sierramadretattler.blogspot.com

35 comments:

  1. Good old Bart and cronies, bless their little ..... .
    This same group of characters used George Maurer and I recall the election for Doyle was "rigged".
    How different this foothill village would be; if only honest and intelligent councilmembers had served this community.
    The years following these knuckleheads then became known as the shenanigan years.
    Up until this council, the reserves and city coffers were in excellent condition.
    It goes to show "you", how much one's vote can really make a difference, not only from a national level, but from a local level as well.

    ReplyDelete
    Replies
    1. One of the differences would be less or no destruction of the hillsides at Stonehouse and One Carter....

      Delete
  2. The city will have to raise taxes once again. And the sad thing is it will have to be done in order to save the place from dissolution. Those responsible will still strut around town blabbing endlessly about how they are the true champions of Sierra Madre, and how those who dare question that don't know what they are talking about. Bughouse politics lives on in the Foothill Village.

    ReplyDelete
  3. What year did CalPERS come on board in Sierra Madre?

    ReplyDelete
  4. So how does that Debt Ceiling feel now? You mean we can't borrow anymore free money from the banks or wall street? Oh darn what will we do now? Looks like all the political connections of the current city council have dried up and left Sierra Madre hanging high and dry, so what's the next step and in which direction? Raise money to pay off debt and keep Sierra Madre solvent will it be a FEE or a out right nasty old TAX on walking on sidewalks?

    ReplyDelete
  5. Please remember all the city council members along with department heads and staff have to keep telling the 'Big Lie' in order to keep their jobs and pensions, power is addicting also. Your biggest enemy is your City Manager - he and he along pulls the chains and whips on which direction this cities future and finances go!! Either kicking the can down the road like countless other Sierra Madre city managers have done or a new direction takes place, what will it be FOLKS.

    ReplyDelete
    Replies
    1. That new direction will take place because all of the other options are gone. There is no place left to hide any of this anymore.

      Delete
  6. How much will the city get for the Library property?

    ReplyDelete
    Replies
    1. It's not a fire sale. No, do not think that.

      Delete
    2. It is hot. But probably because of the weather.

      Delete
  7. 7:10am. If there had been a competent City Manager in place to begin with, Sierra Madre would not have to kick anything or anybody.
    Remember that Elaine served at the pleasure of the Council making decisions, then she rubbered stamped.
    Past Councilmen and Councilwomen were not that fourth coming about their ambitions to "move Sierra Madre in the right direction"; well I'd say, they got the job done.
    The failed DSP put a dent in their long range goals; they made their money back from pushing the Kensington Retirement complex on the boulevard.
    Reflect back to the elected Council over the years and you will see the pattern of deceit.
    Hard fought battles were raged in those chambers; Citizens vs inept Council.
    Now, the newbies say; look, can't we all be civil? They are/were, clueless as to the undertones and back door deals coming out of City Hall.
    It only takes one or three bad apples to spoil the entire barrel.

    ReplyDelete
  8. Ask the churches to contribute

    ReplyDelete
    Replies
    1. Taxation is vexatious to the Lord.

      Delete
  9. Any money made from the possible sale of the Library property, will be reinvested into a Community Center/Library.

    ReplyDelete
    Replies
    1. You know that for certain? There is no buyer identified, or a price. Sounds like you're going on faith here.

      Delete
    2. Someone has pushed this into happening, and it ain't for the common good.

      Delete
    3. Any truth to the rumors that Friends of the Library are changing their name to Friends of the Developer?

      Delete
  10. EMMA bonds is the site that has ALL of our bonds. After you type agree, search for Sierra Madre.

    ReplyDelete
  11. 10:22am. See you at the City Meetings when this comes up for discussion.

    ReplyDelete
    Replies
    1. So far the city says there is no buyer identified. Do you know who it is?

      Delete
    2. The city knows. We're just not at that point in the process where such information can be rolled out yet.

      Delete
    3. We used to be able to afford the library. Now we have a lot of debt to pay. Ironic that Robert "Mr. Library" Stockly is among the 5 individuals responsible for this mess.

      Delete
  12. Today the "builder" is destroying the last of the historic Darling house. I'll send a picture to serve as a "never forget" reminder of our city council's commitment to preservation.

    ReplyDelete
    Replies
    1. And you are surprised.

      Delete
  13. 11:30 am. See you at the meeting in City Hall where ALL is open for public comment, Q&A.

    ReplyDelete
    Replies
    1. The city council cannot address items that are not on the agenda. Not exactly the forum for spontaneous communication. I like the public forum setting much better.

      Delete
  14. Sad Emoji; remind me, what was historic? and a home owner can do what they are permitted to do, they own the house.

    ReplyDelete
    Replies
    1. Home owners have rights, too. Not just flippers and developers. This is a community, not an anarchist preserve.

      Delete
    2. Are you sure 12:16? City hall sure seems to act like one.

      Delete
    3. Well, Ok. That is a viewpoint.

      Delete
    4. That was the problem. No permit for what thy did

      Delete
  15. I thought the Library was agonized in September for the City Council.

    ReplyDelete
    Replies
    1. Agonized is a very good word for it.

      Delete
  16. So what can be truly done about these unsetting bonds?

    ReplyDelete