Sunday, May 28, 2006

Budget puts Encinitas in tight spot


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Budget puts Encinitas in tight spot

By Angela Lau
UNION-TRIBUNE STAFF WRITER

May 25, 2006

ENCINITAS
– Financial consultants last night confirmed the City Council's worst fears over the coming year's tight capital budget: There is no easy way out.

City Finance Manager Jay Lembach indicated in a report that delaying three priority projects – three replacement fire stations, a central public works yard and the first phase of a 43-acre public park – eventually would cost the city millions of dollars more each year they are delayed because of rising construction costs.

The proposed budget falls $23 million short of estimates for those projects.
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32 comments:

  1. Sense and nonsenseMay 28, 2006 10:01 PM

    Wow, I think it would be entirely wrong to charge us $24 every month instead of every other month for our water meter basic fee. I know that the meter is read every month, now. The billing should stay at an every other month cycle to save billing, mailing expenses.

    I have relatives in Rancho Santa Fe. They are in the San Dieguito Water District, also, get astronomical bills. Maybe people have little sympathy for those who live in RSF. Many there don't get the ag discount for having groves, and they are helping to preserve open space by having multi-acre lots.

    My point is, not everyone in the SDWD is in the incorporated City of Encinitas. That is why making these two "joint powers" is not really truthful, to us.

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  2. Council sticks it to ratepayersMay 28, 2006 10:03 PM

    The City Council sits as the Board of Directors of the SDWD; the money from the Lease Revenue Bonds goes into and out of the City's General Funds. These are separate entities in name only, and even then, they are a "joint" authority.

    The Water Dept. has started a public relations, "disinformation" campaign to justify a 6-9% a year increase. For how many years will this increase go on? Who decided that the bills have to start coming out every month? Is it the same old excuse, other water districts do this? Because that reason is not good enough.

    Gil Foerster has been honest enough to admit that the financing through Mutual Bond holders is because after Props A and C the Council knows that they could not get a bond to pass. So obviously, City Council is trying to get around the will and the expressed, informed desires of its constituents, of us, the citizens.

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  3. COPs are loopholes, unfair!May 28, 2006 10:07 PM

    We are not playing the "cult of personality" game here, in answer to a previous post by Gil. No one I know has any "mice in our pockets." We are speaking for ourselves, our friends, families, neighbors, concerned citizens, who live here, surf here. This bond proposal is a bad idea at a bad time, when property and building values should be leveling off or dropping.

    The suggestion is made worse because the City, through contacted attorneys and bond consultants is trying to justify an expense the citizens do not support. If the costs continue to inflate, then we, the people, will be accountable and take the "projected 10 year loss" of pay as you go, of $7,000 dollars, or whatever the figure was. That is not much of a loss, considering the $23 million, plus service debt you are asking the taxpayers and ratepayers to foot. Who else is liable?

    By the time 30 years is up, none of the current Council members will be in office. Surely the voters, the affected ratepayers, taxpayers, citizens of Encinitas, should get to decide by a public vote. If Council knows a vote won't work, then drop the idea. That makes sense to us.

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  4. Bad advice from lawyers, consultantsMay 28, 2006 10:09 PM

    Cottonwood Creek Park took 12 years, I think, to finally complete. Again, most (or all, we hope) of the current Council members should be long gone by the time the Hall Property is developed. It is not fair, or equitable, for the San Dieguito Water District to guarantee the entire bond offering.

    The just thing to do would be to allow a vote. Ultimately the taxpayers and ratepayers are responsible for the costs, period.

    The projection of the budget and the bond that the private consulting firm and Council should be working from is thirty years. But the bond consultant's report assumes, incorrectly, that in 10 years costs will continue to inflate at the current rate. This is comparing apples and oranges. They are not projecting out the total costs of the service debt, and the fact that inflation has never before escalated at the rate that it has in the last 10 years as far as land and construction costs. Further, there have been ups and downs, short of worldwide financial collapse. These possible recessions have not been factored in.

    Many of us, citizens, neighbors, voters of Encinitas do not agree with Council and its paid consultants who are advocating this lease revenue bond which is really the City finding a loophole where the people actually obligated to pay for the money borrowed do not get to vote on it.

    City Council is well known for making mistakes, for ignoring what many concerned citizens are saying. They just write off the protesters as "the usual suspects."

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  5. Unfair, spinmastersMay 28, 2006 10:40 PM

    Hey, getting back to the SDUT article by Maya Angela Lau, Counting the projected service debt at 1.4 million per year, this works out to a total of $42.9 million, or nearly $43 million to be paid over 30 years.

    This $43 million was not factored into the 10 year projection by the paid consultant. We know from Prop C that these consultants will twist the numbers to anything they know Council wants to hear, to justify floating another bond, a loan. They are paid to get the results that Council wants! Reality has little bearing. They just crunch the numbers and twist away. Spin till the blowback explodes in the citizens' faces!

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  6. Hard to fathomMay 28, 2006 10:42 PM

    If one adds up the cost of the library, the fire stations, the first phase of the Hall property development, and the public works yard, plus 10 years of service debt repayment, the total comes to $75.6 million.

    The article in the Tribune was incorrect because the City, through staff, was initially asking for $17 million, or was it $17.5? To her credit, Maggie did question this, asking if the City Could stick to that amount when borrowing the money. Oh, no, Christy Guerin, our Bossypants mayor explains, Council needs wiggle room. She said borrowing $17 million would be assuming that only a bare bones budget was passed, and no other capital improvement projects were attempted.

    We find this hard to fathom. We are very upset by the fact that this is being pushed through without voters' approval, in fact with the noticed dissent of many ratepayers and taxpayers, many concerned citizens and watchdogs.

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  7. Let our voices be heard!May 28, 2006 10:47 PM

    Council seems to think it (they) can play fast and easy with our money. No money is free. One has to pay the piper, as they say. Christy Guerin and many on Council, if not all, have benefited tremendously by inflation. But in general, our economy has not. We do not want this to be another Orange County type town of high density McMansions and no real diversity and appreciation of those who lived here before incorporation.

    Matt Walker and Bob Bonde, Gerald Sodomka are right on. We need a change. Please e-mail Council and tell them we don't want these COPs, which are just Lease Revenue Bonds where the revenue from the Water District Ratepayers is being held as collateral for a loan we do not want to make. Seems like Council wants these vanity projects far more than the citizens who will have to pay for them. Otherwise, they could simply put it to a vote.

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  8. No more wiggle roomMay 28, 2006 10:49 PM

    Contrary to what Gil implied, before, the library vote was only on where the new library was to be located. The fact that we were to build a new one and demolish the previous library was not put to a vote, as far as I can remember. I saw no bond vote on that, either. The issue was location, not financing.

    Also, we did not get to vote on the initial bond for purchase of the Hall Property. The terms of that agreement and projections are way off. How can we expect that the projections on this new bond will also not be completely off the mark? Already Council is adding in an extra $6 million, for "warm fuzzies," for wiggle room.

    Vote out the incumbents. E-mail city council members, the city clerk, let your voices be heard!

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  9. Go to either the city web site www.ci.encinitas.ca.us or Encinitas Taxpayers www.encinitas taxpayers.com web site and all you have to do is click on an address and you will get an e-mail form for each of your city councilpersons. E-mail them your thoughts today. Everyday you wait they are solidifying their positions. Everyday you wait is another day a developer can offer the city councilpersons something for votong their way. The developers want these public projects approved. It helps them sell houses. They don't care who pays for them for the next 30 years because they don't live here and it helps them make money now.

    Our community is fine without new firestations, more sports parks and a new 8 million dollar public works yard.

    Fire stations - remodel what we have now. The fireman seem to sleep well in them now.

    Public works yard - seems like we need a fenced lot to park vehicles and perhaps a tin shed to keep some of the lawnmowers out of the weather. Why an 8 million dollar building?

    The Hall property needs grass and sprinklers. Leave the rest out until we can afford it.

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  10. These city types view you as a cash cow. The money you make is not really YOUR money. It is THEIR money. Moo Moo.

    The city is the pimp and you are the hooker. You have to pay your pimp so he can buy a new purple feathered zoot suit.

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  11. A day at City Hall - Part of the day with Gary Lee/Assistant Engineer for the SDWD. I can talk about water. Part of the day with Bill Wilson/Management Analyst Public Works(sewer). I can talk about Cardiff sewer rates. Still to meet with Jay Lembach about CalPERS so I can't talk about pension/retirement yet.
    Got the cost of portable units for Beacons, Stonesteps, and Grandview for 4 months of summer buts still to meet with Chris Hazeltine/Parks & Rec. to find out where the buck stops as far as "good idea", "bad idea" is concerned. City has no clue of any plans that have to do with those locations so I may have to check with State parks dept. on that. I can't blog about what I've learned yet 'cause I haven't learned enough. I can say that your sewer rate increases the last couple years and water rate increase anticipated have nothing to do with any bond issue, past or future. Do I believe the city employees I talked to today? Yes I do. I'm doing my end of month business chores and probably won't be able to blog at length until next week. Do your homework cause I'm doing mine. Love ya all.

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  12. Hope Gil got all that information in writing and certified under penalty of perjury.

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  13. Steady as she goes GilMay 30, 2006 7:49 PM

    Thank you Gil for doing the groundwork!

    Make sure you get an accounting for how we intend to repay the bonds. We understand that Lease Revenue Bonds do not encumber individual properties (or any real property for that matter)but the repayment has to come from somewhere. If they are intending to place additional burdens on the general fund then we get screwed in a different way and they will be back at us to raise another fee in time.

    The next question is why do we need the money? I can get the park from a scaled back perspective but have you actualy visited the fire stations? They may not be state of the art with a home theater and gourmet kitchen but they are not that bad.

    Final thought is on the timing. Things tend to cost more when labor and materials are in short supply. Many of us (you included from the photos) have lived through a cycle or two and know that things get cheaper in a down cycle like the one thats on the way.

    Lets save some money, sock it away, and pay cash when it gets cheaper. Interest rates will be sky high but it wont matter cause we will have the cash.

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  14. Something smells. A month ago during budget discussions, Jim Bond said "this council will have fun providing all the things people want, and some council in the future will have to figure out how to pay for it. Right now the bond market is a good place to be selling rather than buying." And Dan D said he was not a "credit card person." And Christy said "we sprinkle bond proceeds over a lot of projects and don't really finish them." Then one short month later all of them buy into millions of dollars of debt for the next 30 years. WHAT HAPPENED IN 4 SHORT WEEKS ????

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  15. I agree with you "something smells". Sheila Camera spoke, oral communications, about why the city was negotiating in closed session to sell parkland (Quail Gardens Dr). The next thing we know is the paper saying Christy "would not release more details" but Kerry Miller said "it will unfold pretty quickly." At the budget meeting on May 24th, the council is asking for someone to get the market value of this property as if they had never talked about it and as if Kerry had not negotiated and had not said in the paper "it will unfold pretty quickly." This had all been discussed in closed session TWICE. How do they get away with this stuff.

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  16. Freedom of InformationMay 31, 2006 1:33 AM

    Yes, something smells fishy to us, too. And I don't mean me and the so-called mouse in my pocket, Gil. lol.

    By the way, though we did contribute a small amount to your No on A fund, I wasn't the anonymous poster who signed as "Curious."

    Thanks for "doing your homework," but although you believe staff is being truthful with you, the general perception, with many, is that Council and staff have not been forthcoming with us, as demonstrated by the posts preceding this one.

    We honestly still do not understand why you, Gil, are promoting and encouraging Council to go millions of dollars into debt, when both you and Council believe this is not what the citizens want.

    If the money is going into and out of the General Fund, then these should be General Obligation Bonds, not bonds that are specifically designed to avoid a public vote because they are spun and twisted to be related to the Water District.

    Although staff is assuring you that the raise in rates has nothing to do with the increasing operating expenses and capital improvement expenses, we know that the rate increases are related to increasing debt. Are you trying to say that two plus two does not equal four?

    We respect you because of your efforts, Gil, but we don't agree with you on this. Thanks for looking into the Biffys though. That would be nice. I seem to remember a Biffy at Moonlight about 33 years ago, or so. We should be able to get one, somewhere, at Leucadia beach accesses, although I am lucky to live fairly close by. I don't think too many people poop in the water, though, I hope. More of the fecal matter, at the beaches, has been from dogs, in the past.

    Maybe you are falling for the wolves in sheep’s clothing, Gil? If you have any influence at City Hall, please try to convince staff and Council that this, like prop A and C deserves a public vote. We believe the courts will again agree with us, if Council tries to go over our heads and behind our backs by calling a spade a diamond. This should be voted upon as a general obligation bond, which benefits all of the citizens of Encinitas, and is not tied to the Water service or to particular property owners.

    Common sense, common courtesy, common respect for the citizens, common decency, all point toward the obvious fact that the People have shown that we will not allow Council to play fast and loose with the State Constitution and the expressed desires of the voters through passing Propositions 218 in 1996, and Prop. 13, in 1978.

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  17. Gil,
    You are obviously going to the wrong places for your education. You still haven't told us where you live. In my research I have learned you live in Elfin Forrest. If so, why are you a proponent for a bond measure that you will not be obligated for? I am having a hard time understanding your interetst, just like I have never figured out Aceti's interest in a city he doesn't live in and wouldn't be obligated to pay the fees the city wanted to raise.

    Your informants in the city probably don't know why the city, acting as the board of directors for the SDWD, obligated its members for the bonds on the Hall property. Fees for the district (which covers about half of the city) are set by financial debts of the district. The Hall bond is listed as a debt so that the fees are set to make sure that those obligations are retired. Tell me how that doesn't raise the fees of the members of the SDWD? Does the city charge SDWD for services like street maintenace, etc.? Much like the city of San Diego does. This is another way that the city taxes only half the city by increasing water and sewer fees to cover these bogus expenses.

    It appears that for some reason Gil you are becoming a shill for the City Council. A shill that doesn't live in our city. Why????

    Curious

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  18. As to the No on A campaign. If you feel the outcome was orchestrated by an out of town shill, call P3 and tell him you would like the issue brought forth again. That is what he said he was going to do at a later date anyway when I'm not around, just tell him the time is now. I won't write a word in opposition.

    I didn't talk to the council members yesterday, I talked to the technocrats that make you toilets flush and your water drinkable(?)

    No one likes debt. Not whomever is on the council, not the homeowners when they buy their homes. But people suck it up and buy homes with big debt because they believe Encinitas is a special place to live. Cities incur debt because they think it will make their city a better place to live.

    The only bond debt that the water district is servicing is the Badger facility. Water from the MWD costs over $400. an acre foot right out of the ditch. Because that water has dirt, dead animals, and an occasional human body in it it has to be treated, then distributed to your homes and businesses. That's what you are paying for according to Gary Lee of the SDWD. The sewer rates in Cardiff (which also includes Olivenhain) were more or less static thru the 90's until two years ago. The rate payers saw two LARGE increases, the first about 50%, the second about 24%. The district believes that the rates will be more or less static unless something catastrophic occurs, until 2013.

    Of course no one craps or urinates on the beaches, everyone holds it until they get home, right? Ask the beach clean up volunteers how many non dog piles of crap they find on the beach.

    If there is a loop hole in the law that you think it violates the State constitution, get it changed. If you feel strongly about an issue, get it on the ballot. I circulated petitions and enlisted ag support for the Coastal Act, and it passed. If you can't muster the support to get your issue on the ballot and you think the city and whatever council is sitting is violating the constitution, take them to court.

    I vote in Elfin Forest. It is the closest area to Encinitas in an unincorporated part of the county and when the 2020 plan is finished I am going to work for it's passage. It is the only chance to preserve the small farm in San Diego County. Something this city's founders decided not to do when we incorporated. I have spent 12-16 hours of almost every waking day in this city. My mailing address has been Box 333 in Cardiff for 31 years. I am a member of this community as much as anyone else.

    I don't shill for anyone. If I did I would have gone over to P3's side on Prop A when he asked. I can't be bought, no one has enough money to buy my soul. I try to do my research and pass what I learn on. I lived in this city for twenty years, now I only continue to work here and before long that won't even be the case as the developers blade scrapes the last vestiges of ag off the Encinitas city map.

    Why do I care? Because I love this city, I spend as much time as I can here, I fish from the surf on it's beaches, I know business owners by name, I love it's diverse make-up and expect to continue being a presence until I can't get around anymore. I fight for the preservation of the character that makes the 101 corridor unique.

    If I find that the city is trying to 'hoodwink' the citizens,I will do an about face and change my position. If I think the city plans will make Encinitas a better place to live, work and recreate, then I am going to say so. It's pretty basic for me.

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  19. The Cardiff Sanitation District Board (the council) went from charging a flat fee to a fee based on the amount of water assumed going down the drain.
    This method helps increase sewage rates. The CSD has a 2003 debt.

    The annual financial report (cafr) for the SDWD lists 2004 water revenue bonds, the R.E. Badger note, and the "loan" from the city for the automatic meters. The SDWD board (the council) also approved a "take or pay" deal for reclaimed water from the sewage plant. If the SDWD can't use all the reclaimed water, they must still pay for it.

    These enterprise funds have debts.

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  20. Jimminy Crickets! Gil gets asked a simple question about where he lives, and we get a very long response that dances all around the answer. Gotta go do some work. You won't hear from me for a while, so take your best shot. Luv ya all.

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  21. I was looking through my notes and found this. On December 17, 2003 in council chambers James Bond said, "...when we tried to sneak out $25 million worth of bonds." Check it out. It's part of the public record. Unfortunately the council is going to do it again.

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  22. Our sewer fees in Cardiff went from $136 in 2000 to $265 in 2005. That's almost a tripling in 5 years. The Lease Revenue Bonds for the Hall property were sold in 2001. A coincidence? Most of our water use is in the garden. The kids are gone. I don't think it's fair.

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  23. If $135. to $236. is a tripling then don't apply for any jobs having to do with finance and percentages, unless this is 'new math' cause I don't have the book.

    I sleep where I am. This weekend it will be in Joshua Tree. Planting cactii for seed production Friday thru Wed.

    Your sewer fee is calculated by taking the two lowest months of water consumption during the winter months and multiplying times .85 and using that number for the twelve month period. If you quit watering your lawn during the winter, and "don't flush unless you make lumps" your bill will go down.

    The "loan" from the city for automated meters was 700,000, which the water district is going to pay back. This eliminates the need for meter readers, their pay and pension benefits, as in most areas, and it is all done electronically. Sounds good to me.

    The reclaimed water gets dumped in the ocean if it isn't used. When used it gets filtered by the ground and is considerably cleaner than that dumped directly. Don't drink the water from the pink pipes. The "use or pay" forces cities to plumb for reclaimed water use instead of raising your sewer rates for the pay part of the "pay or use".

    Jimminy(sic) Crickets - I slept most nights on the ag property in Elfin Forest, except when on one of the other ag properties,like Joshus Tree this next week. I'm not dancing just trying to answer the multiple irrelevant queries all at once. Be careful Jimminy(sic) you hang around with that long nosed kid two much and his propensity to lie may rub off.

    If you plant a tropical garden in the desert and water it in the winter you are going to pay more in sewer fees. Try designing that garden with xerophytic plants.

    As to passing costs along, go look up AB 1600(cost of providing).

    If the city had projected the payments out for the thirty year bond period, you would have yelled foul for being speculative. They projected them for ten years because that is what was reasonable to project.

    We will never be Orange County. They had 7 billion in securities and went to Goldman/Sachs and leveraged them.(Bought more on margin) When the market went in the toilet, they couldn't meet the calls.

    Gosh,I love this blog site. Keep throwing the questions folks, it's my job to try and answer them. Don't worry about attacking me, after thirty years of having different city councils throw punches, I'm pretty tough and know how to do the counter-punching research.

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  24. The 6/2005 city amounts for the SDWD have a book debt of $21,575,000 (two bonds, and the loan from the city). This doesn't include the city cost allocations that are collected during the year.

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  25. The sewer charge is calculated using four months of water consumption, not two months.

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  26. No it is not. They take the two lowest usage months during the four month winter season. To verify contact Gary Lee, 633-2862.

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  27. Gil,

    This is from the city website:

    Q. How is my sewer service charge calculated and billed?
    [top of page]
    A. Sewer service charges are billed on your property tax bill, which is mailed by the County Assessor’s Office in September.

    For residential customers in the Encinitas Sanitary Division and the Cardiff Sanitary Division, the charge is based on the two lowest bi-monthly water readings taken during the winter months (December through May). For customers serviced by the Olivenhain Municipal Water District (OMWD), monthly water readings are combined to obtain bi-monthly readings (i.e., December+January = January, February+March = March, April+May = May).

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  28. Gil is Da Man!May 31, 2006 9:50 PM

    Gil's anckle biting critics are bitter and complaining while WRONG:
    "the charge is based on the two lowest bi-monthly water readings taken during the winter months."
    You da man Gil!

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  29. Who can goof up spelling "ankle"?

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  30. Bi-monthly = 2 months

    two lowest bi-monthly water meter readings = 4 months

    Olivenhain meters are read every month. Four months are used.

    The city's winter months are calculated from December to May = 6 months

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  31. Gil,

    Pay all our water fees from your ag business and we will all get off your back.

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  32. Yes, I think, Gil, you or your contact at City Hall are misunderstanding one another. Bi-monthly means every two months. That is what our SDWD billing schedule is now, and should remain. Why must we switch to a once a month schedule? Did you ask that question, Gil? Because we sure wish you would.

    We don't have the pull at City Hall you do. They won't return our calls, or speak to us, because we are an "open case." Gil, you suggest we take the City to Court if we're not happy. Oh, that is so much easier said than done, but we will, if forced to.

    The City makes busy work for Sabine & Morrison by taking us to court, however.

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