Monday, September 20, 2010

Faith-based or Fantasy-based Budgeting in Encinitas

Instead of saying how the city is going to fund the Hall park phase 1 construction, Dalager is telling people they have to have faith.

We have not had the money to build the Hall park, even though Dalager, Stocks, Bond, and Houlihan used the expensive "lease-revenue" scam to avoid voter approval to borrow $20million in bonds to build the park. They borrowed millions promising to fund the park, but the OFFICIAL budget shows we need another $10 million dollars to build phase 1.

click to enlarge

Maybe the city has reevaluated the costs of the Hall park construction, but that would be just a DRAFT budget rewrite that the public has not had a chance to evaluate. Tom Brown, the well respected owner of Sierra Pacific Engineering ran his council campaign on trying to correct the city's "fantasy budgeting".

Maybe Dalager has a faith validating plan. Betcha, it is a secret plan approved by a majority of the council in violation of the Brown Act. Otherwise, shouldn't we have been talking about the financing. It sure seems like they have a plan. Maybe they don't have a plan and they are just hoping nobody notices that didn't budget wisely. Good thing they have those NIMBYs to blame.

All signs point to a fire sale of city property to save face and reward their bros. It has been another year and the city still keeps its plans for Quail Gardens Drive secret. That ain't the right way to handle public property.

The big question for Dan will be, should we use the money for recreation or to keep our basic infrastructure from falling apart?

PS Don't forget how the city wanted to sell part of the Hall park as a way to finance its construction. That sure sounds funny now.


  1. anyway you slice it, Dalager is crook stealing our grandkids money to continue to pay for the illegal pension spike he voted in in 2005 and the 14% spike in employees pay in 2005.

    While most people are hurting the Employees at Encinitas are getting rich all on our tax dollars.

    Of course there is no money for projects, something has to pay for these huge pensions. its your tax dollars and your kids future tax dollars.

    You voted for a dumb and dishonest person like Dalager. you caused this mess. If you want positive future for your kids and grandkids, vote for anyone but an incumbent.

  2. Anon,

    I agree in general but would like to add a little nuance.

    Barth was not on the council when the pension spike happened, and she has made pension reform a campaign issue.

    The alternative to Barth (assuming we're both voting for Kranz) is Gaspar, who has not supported pension reform, supports full-blown Hall Sports Megaplex, and is widely viewed as a Dalager / Stocks / Bond ally.

    I am all for voting out the incumbents, but occasionally you need to make an exception.

  3. If it were not for Dalager, we would be enjoying a community park now, with sports fields, too.

  4. OK W.C.-

    You have a good point.

    Get the word out to at least 10 people you know and will vote. Dump Dalager. He is a crook, stealing our kids future tax dollars.

    Duke Dalager belongs in jail, NOT our City Hall.!

  5. Dalager was the only candidate at the Cardiff forum who kept invoking faith. It's nuts to say, let's just take a gamble, and pray. That's exactly what he said. That's like quiting your job, buying a lottery ticket and praying.

  6. I have faith that the most potent email tree in Encinitas, the soccer leagues, will be sending the message that Dan is a good man that only cares for your kids and those horrible people who want a community park for all citizens and did not want a hospital expansion or a preforming arts theatre are making up all this recorded stuff.

  7. Of course, everyone loves the idea of a community park. However, the real travesty of this park, along with the "creative" financing, is building a sports park heavy on night time soccer fields, when only 11% of the population, (according to a recent SANDAG report) is under the age of 18. That's a very small segment of the population of Encinitas. The majority of the population, according to this same report is between the ages of 50 to 59. So who is going to be using this park?

    The most insidious thing about financing with a "lease revenue bond," along with the higher interest rate and insurance policy, is that the principle isn't due until the project is built. Therefore the true debt payments don't show up on the annual city budget, they show up as "lease payments." This is going to be a very expensive park. Financing with a lease revenue bond without a source of "revenue" to pay it back, means eventually that burden will fall to taxpayers.

  8. All and all, Dalager's regional sports park could cost close to $100,000,000.00.
    Have Faith!

  9. Winner Leucadian 2September 21, 2010 11:04 AM


    Worked for me.

  10. Faith and fantasy are synonyms -- no need to use both in the title.

  11. Rizzo in Bell got perp-walked today.

    Not that that has anything to do with Encinitas

  12. Does anyone have the CUSIP # [ID#] of the Hall property bonds? The Library bond CUSIP # is 292521bx8 and is rated by Moody's at Aa3 and by Fitch at AA+. It is currently trading near par [$100]. I can't find much on the Hall bonds ...

  13. Bells crooks are going to jail, now lets hope our DA puts Duke Dalager in jail.

    He has stolen so much money of your kids and grandkids money, its sickening.

  14. Herb,

    If the library bonds are trading near par, that would mean the market sees significant default risk. Rates are far lower now than when those bonds were issued, meaning they should be trading at a big premium to the issue price. If they are not, the market thinks Dan's faith-based budgeting is a bunch of hooey.

  15. I have found the prospectus for the Hall re-finance bonds here -
    These bonds are sold in tranches with staggered due dates [like a bond ladder]. As I understand it [and I am no bond expert], The city pays lease payments into a fund. The fund then pays the interest as due and builds a balance up to pay the principle payments as thy becomes due. The fund from the previous bond is pulled forward to the re-financed issue, so this new bond doesn't actually start from scratch. It looks to me the city is borrowing almost as much as originally borrowed after paying on the first bond for 9+ years - I don't have an accounting background to be able to evaluate this accurately.
    The bond documents make a number of assertions that look questionable to me. I am currently getting a bid on two of the tranches and will report back.
    Anyone with a solid accounting background should compare the old bond and the new bond and explain why such a small portion of principle was paid to date on the first bond - the new bond is weighted by amount depending on the tranche - in other words some years have more principle due than others and pay different rates.
    The appraisal used in the bond documents values the property as in excess of $23,000,000. Divided by 44 acres that's $522,77 an acre.


Thank you for posting on the Leucadia Blog.
There is nothing more powerful on this Earth than an anonymous opinion on the Internet.
Have at it!!!