Wednesday, August 23, 2006

Matt Walker's 6 Points

Dear Mayor Guerin and City Council Members:

I will not be able to attend the August 23 Council meeting but wanted to express my opposition to the plan to proceed with revenue bonds.

Here are my reasons:

1 The city should refrain from future major expenditures until it knows the size of its unfunded pension liability. As you know, the 2004 liability was substantially greater than the 2003 amount. In 2005, staff received pay and benefit increases. Unfortunately, we do not know the unfunded liability amount for 2005 (Mr. Lembach told me the numbers will be available in October or November), but I would guess the amount is very substantial. We should know how big this (debt) mountain is before we float more bonds.

2 Bonding is unnecessary now. The City could pay for fire stations and the public works yard by selling the Quail Garden property and using the money that would have been spent on bond issuance and interest. It will be years before we are ready to do anything with the Hall Property. The Hall Property EIR is not even done, and we can pretty much assume it will be challenged in Court.

3 The City will pay millions in fees, expenses and interest on the bonds. Mr. Lembach told me the issuance expenses will include over $600,000 in professional fees and charges, and over $900,000 for capitalized interest. Annual interest will be $1 million. All these expenses and interest will be wasted because we have the capacity to pay-as-you-go until we are ready to develop the Hall Property.

4 The rationale that we need to float bonds to save construction costs makes no sense. No one has actually projected how much construction costs will increase over the next several years (which is of course impossible). No one has attempted to compare the cost of bonding with the cost of pay-as-you-go utilizing a realistic assessment of when the City's projects will actually be ready to build. The financial projections prepared in May were clearly designed to support bonding, and are not believable.

5 The City could save money by selling general obligation bonds. Why is the Council is so opposed to a public vote that it will spend extra money floating revenue bonds?

6 I gather the proposed bonds will be paid from a revenue stream to be created by leasing the library from the EPFA to the City. I have seen a lot of gimmicks in my time, but this seems over-the-top. Are you sure this plan could withstand a legal challenge? Why start a process that seems so legally flawed? The Council made the same mistake trying to put the public works yard on Saxony Road.

I do not have an agenda here other than the fiscal health of my city. I think unnecessary debt is a bad idea. I have not seen anything that tells me this is the right time or the right reason to sell bonds. Many of us claim to be fiscal conservatives; this proposal is anything but fiscally conservative.

Regards,

Matt Walker
721 Saxony Road
Encinitas CA

Matt Walker is a local attorney. We have never met.

20 comments:

  1. Very well written and very logical. Make his 6 points make sense to me. Sell the Qual Property before prices slip even more.

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  2. Matt is a person of high integrity who speaks clearly and honestly. His points are very well taken. There is no reason to burden our children so our councilpersons can have a plaque on their designer fire stations.

    We really need to hold up a minute and rethink this process. We could begin by having another look at each of these stations to determine if we really need to improve them to the extent presented. Maybe with a little value engineering now we won't find ourselves overbudget by a factor of 2.

    I agree with the point regarding General Obligation Bonds. If borrowing is so important, and so logical, it should be able to stand the light of day and be successful in an election.

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  3. Spot on Matt.

    I agree, sell the Quail site. IMHO, it was a good move to buy mossy. The construction cost alone of a new P.W. yard would have been close to 10 mil. So now that we have done that it creats an excess parcel in the quail site.

    Gov. is not suppossed to be a collector of provate land. You took one out of the property tax colection, so put one back in. Sell Quail and use that money to fix infrastucture and repair fire stations.

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  4. Boys and girls, pay clsoe attention to number 6.

    Don't think that the City will do things legally. Remember the "clean water tax" and the lawsuit that followed.

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  5. Good info but I like the funny post better.

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  6. I agree. Nothing funny about wasting taxpayer's money.

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  7. We didn't even get funny pictures this time.

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  8. Matt has done a fantastic job in detailing the reasons not to proceed with the lease revenue bond scheme that our council seems to favor. I attempted to make some of these same points at the council meeting on May 10th, but was not nearly as eloquent or convincing.

    Point #6 is of particular interest to me as it relates to the California Supreme Court ruling dated July 24, 2006. A great review of that ruling is available on the ETA website (linked to this site), by clicking on "Our Money". It was written by John Coupal of the Howard Jarvis Taxpayers Association and indicates that "water rates, sewer rates and other property related fees are now subject to Proposition 218". It also says that "the hundreds of millions of dollars transferred to cities from enterprise funds is now illegal".

    Although I am not an attorney, it looks like this bond proposal will have to go to a vote with the city forced to make it's case for the need to borrow money and detailing exactly where the funds would be spent. That's a good thing.

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  9. ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZHAHAHAHAHAHAHA
    ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ

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  10. Mr. Walker has a point! If we're willing to DEmolish a property like the old library, why do we never "molish" a new one? Huh? Anyone EVER seen the city MOLISH a project? I don't think so!!But they take our money and SMILE SMILE SMILE.
    There's KEERUPTION in city hall folks, I assure you! IT's KEEERUPT!
    NO MOLISH? I say NO THANK YOU!
    I learned that one must fight fire with fire, so why does the fire department carry WATER instead of FIRE?
    IT'S KEEEERUPT I tell you!
    Tanks jesus for blogsite!

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  11. Go screw yourself snorer! Go back to Carlsbad where everything is a snore like your lackof sex life!

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  12. Hiding behind the keyboard, stand up and be counted, Jesus!

    The blog will assimilate you!

    Post like Thomas Payne and then when confronted log in under anonymous and swear like a sailor.

    Ah, the best of both worlds!

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  13. That’s a union fire fighter afraid he wont get his personal big screen HDTV and deep freeze cooler if this bond gos to the public.

    And you ask, am I bitter I'm not a fire fighter. Hell yeah, not bitter, jealous. Those folks have the cake job. Why else is there 1000 applicants for a firefighter position and Cities are searching for Cops. Reason- Sheriffs earns their money through tough work. Firefighters spend most of the time shopping, washing trucks, BBQing, exercising, and giving kids tours of their under developed fire stations. Whoa is me. I wish I became a fire fighter. My mistake- but my kids are applying now. I hope they hit the lottery. Most have second careers and that’s how they afford to live in exclusive gated communities like Sandelwood like our very own Mark Muir. Oh yeah, he also was the major political head for the PAC supporting Bond, Stock, Gurrien, and Houlihan. This dude just guesses who is going to win and he puts his money on them for the Fire department to call the chip when wanted. What ever happened to GOP conservatives? Stocks, Bond, and Guerin guilty of taking union money. Houlihan expected your a demi.

    Of course, Mark Muir was appointed chief brought up from the ranks. That bro helped all of the current council bank role their position as council. He owns them. Hense- He’s Chief. Hence- He get 3 Ritz Fire Stations. Muir is chief pulling in over $150/ yr and will collect 100% salary when he retires meaning over $150 until he dies. He played his card right. Winner!!!!! On the tax payer dollar. Oh well, we are 58,000 people. We can afford a $150k for life. Every 3 or 4 years, the fire chiefs will rotating the position and we’ll have a bunch of $150 pentions on our hands. Nice. Plus they get a bonus free vacation to Japan upon announcing their retirement. I get the feeling that the fire fighter chief are not our for our good, just their own personal easy living. Thank god for the papers reporting about Muir. OH he is not President of the PAC anymore. His wife is. That like saying Ms. Duke didn't know what Duke was doing was illegal. One day, I live with my man in a condo in Mission Valley, the next, I live in Rancho Sante Fe. Muir-What a joke- he is concerned about budget. I bet. He'll soon be moving to Rancho Santa Fe. that dude knows how to play the game.

    Why else would so called cost concerned republicans like Bond, Stocks, Guiren, and Galager be in supported of a council issued bond supporting building 3 Ritz fire stations? Why has the fire department union gotten so strong? That union has done an amazing job with PR. They will bankrupt our city. Or at least sap our tax dollars that should be spent on capital improvements. When will it stop?

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  14. Jesus knows and will strike yeeee for calling out his name in vane. Fire Fighters better pray for no fires if someone is forsaking name. Karma baby Karma!

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  15. If the new fire chief can afford a 2 million dollar house on a fireman's salary, he has come up through the ranks.

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  16. The city council voted 4 to 0 on Wednesday evening to begin the process of issuing lease revenue bonds for $20 million. Dalager was on vacation to attend his son's wedding.

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  17. THROW THE BUM OUT IN NOVEMBER AND RECALL THE REST IN DECEMEBER.

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  18. The big win in court by the Howard Jarvis Assoc. is important. This city has raised water and sewer rates in the last few years (they are now double or triple what they used to be) while no one was paying attention. This win makes these increases illegal. Raising rates MUST go to a vote of the people.

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  19. council is clueless. vote for change in November

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  20. voting for teresa barthSeptember 02, 2006 8:42 PM

    Doug Long actually spoke at this Council meeting and told the Council to "Go for it" borrow 20 mill using lease revenue bonding.

    Teresa Barth said that we should general obligation bond it if that is what the voters want to do. It is cheaper and lets the voters decide, which is what the the law requires.

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