Thursday, July 26, 2012

Encinitas Ranch Golf Course Bond Financials

Click Each to Enlarge

- Revenues down 21% in three years
- Has lost money every year since 2006
- General & Administrative expenses up while Maintenance and other expenses are down
- Net Assets down to $1.33 million as of June 2011 from $3.13 million just three years before

Can't wait to see 2012 financials!  Who would buy Encinitas Ranch Golf Authority bonds???

Burning Questions: What is going to change the profitability of the course?
Is Board President Bill Dean ever going to support competitive proposals for the operation of the course?
Too many skeltons in the closet?  Too many problems to be highlighted during the process? Too much work?

See Also: The developers were scared to death the course wouldn't make a profit.

Interest Peaks

From the NCTimes:

Attorney Kevin Forrester, who served as president of the Olivenhain Town Council in the early 1990s; printing company account executive Tony Kranz, who ran for council two years ago; Shoja Naimi, owner of the Roxy Restaurant in downtown Encinitas; and Lisa Shaffer, who teaches at the U.C. San Diego Rady School of Management, all have picked up papers.

Monday, July 23, 2012

Encinitas Ranch Golf Course 101

I'd post a link to the city's website for the whole video, but finding stuff on the city's website often is a pain in ass, at best. If you can find it post up a link and report back on how easy it was to find it.

For now this set of videos is going to turn out be very interesting to study as we see what happens at the Encinitas Ranch Golf Course (ERGA).

Here is Chris Calkins from Carltas being more forthright or wiser than city staff:

Wow, that's cool. The city can walk away from the golf course. Can the city council dissolve the joint powers authority at will?

Here are how the funds are set up and how the profits were to be shared. It wasn't some dumb mistake that a long-term contingency fund was not included.

The private developer of the Golf Course was "Scared to Death" that the golf course wouldn't be profitable.

Corporations love to "partner" with government.

Jim, did it turn out to be true in the years the golf course didn't make money that Carltas would step up and cut a check?

Encinitas Ranch Golf Course to be Saved!

Remember when the city staff and ERGA President Bill Dean asked the city council for some adjustments to agreement that governs the operation the public-private for-profit Encinitas Ranch Golf Course? Everything was just rosy, but they were being proactive with their requests! They wanted to create a fund, just in case an earthquake knocked over the golf cart bridge. That way they wouldn't have to wait the extra few weeks it would take to get the Council to approve extra funding for rebuilding the bridge. That was the basic shtick the public was given. It sounded like BS. We were told the golf course's budget was A-okay. Only later was it patently obvious that the golf course was not doing as well as projected (and thus required).

Is propaganda acceptable if it is for a good cause? Like keeping embarrassing stuff hidden.

The golf course has financial problems. No problem. Everything will be fixed (or at least kicked down the road). The rumors are that the City Management, who are also the policy makers for ERGA already worked out a solution. This policy development was done behind closed doors and announced last week at the ERGA meeting.

They are going to "refinance" the golf course.

Burning questions (and you can guess some of the answers):

Will the new bonds increase the golf course's indebtedness?
Will the new bonds cost ERGA more in the end?
Will the new bonds extend the repayment period?
Will the new bonds increase the collateral given to the bond holders?
If the course can't pay its debt now, what is going to change to improve that situation?
How does this debt restructuring impact the City, Carltas' profit sharing, and the Mello-roos homeowners?

Did anyone follow up on the idea of putting the operations contract for the course out to competitive proposals? Why was that a bad idea?

Borrow = Prudent

Saturday, July 21, 2012

Weekend Update

Based entirely on rumors:

This week the Encinitas city council directed staff to create a red-line version of the general plan update. That way people can see what edits have been made. It would be great if those proposed edits were also explained/justified so the council can evaluate the proposals (and the public can assess the quality of their decision making). This is great news.

It goes to show that sometimes just getting an issue out of the backroom and into the light will force the council to do the right thing. Points for Gaspar, Muir, Barth and Bond (Stocks was on vacation).

Background: Several citizens had been asking top city staff and Icafona (from MIG, the city's million dollar consultant), for over a year, to make it simple for the public to see what changes to the general plan were being proposed. Points also go out to those pesky citizens who cared enough to give up their time and energy for a cause which comes with no perks.

Based on the LA Times reporting and editorials:

The bullet train, which will not pay for itself or provide economic efficiencies in our state, but will likely stimulate more sprawl that swallows up the State's hardest to outsource sector (HIGHLY productive regional agriculture) continues to get billions in funding. Don't worry though, bond debt is paying for the train so we don't have to pay for it;) That's good, because the State can't afford open government and has postured to suspend the Brown Act.

The Brown Act provides MINIMUM requirements for cities to make decisions in public. Encinitas Council Member Barth has asked that the issue be put on the next council agenda. This is good. The city council has already sent a clear message to the citizens of Encinitas that they value open government and follow the Brown Act and the California Public Records Act. In 2009 the council, minus Barth, voted against considering a Sunshine Ordinance (a collection of laws governing access to meetings and public documents). Instead, the council made a strong statement that they respect open government and follow the open government laws (laugh track here). They directed staff to announce this to the internet surfers of the world:

The City is committed to public engagement and transparency in public policy decision making. We recognize the value of open government, and know the City exists to serve the good will of the public. Information on open government and your rights are provided below.

Classic Encinitas ploy example: The staff report for the 2009 meeting was incomplete. It failed to include dozens of provisions in other cities' sunshine ordinances, when comparing Encinitas practices to these other cities. It wasn't an innocent oversight as the staff member who created the staff report's tables had created a more extensive set of comparisions which was not shared with the public. Open government?

When the City posted that their strong message on the website the were illegally withholding numerous documents that various groups were seeking. Public statements were one thing and actual actions another.

When Barth says, "It is critical that the city of Encinitas send a clear message to the citizens that we value open government and public participation," I hope that means taking action, beyond making nonbinding statements.

California cities that have comprehensive sunshine ordinances still have to operate in the daylight even if Sacramento suspends the Brown Act, because their local laws require it. Maybe this is a good time to fold the Brown Act into the the City Ordinances. Maybe this is a good time to create a sunshine ordinance, and it would be especially nice if we create one that provides checks and balances, so people don't have to continue to go to court with city hall just to get stupid reports on road conditions released.

Thursday, July 19, 2012

Bee Swarm

These Bees are everywhere. What does it mean?

Wednesday, July 18, 2012

Incumbency Perks: Spin Masters with Taxpayer Funded Megaphones

I was just so smitten with Michael Jay Fox when I was 16. 

If you are in power and you hire the right people to run city hall you can count on them to conceal your warts. 

Fiscal matters in an organization with a $90 million budget can quickly become very complicated and confusing. But that does not need to be so.

It need not be confusing. Transparency is improved by clarity and completeness. Hopefully, the budget is at least complete;  in recent years whole (important) sections have been left out of the approved budget. That's why they get paid the big bucks.

Similar to a household budget, the key ingredients to fiscal management include an understanding of income, expenses, savings, capital and borrowing. To manage a budget effectively, it is important not only to make decisions for the current year, but to look several years down the road to better understand how such decisions will impact the fiscal condition of the City in future years.

Wise households don't spend more than they take in and don't commit to investments beyond what they are willing to risk.  Its too bad that the current council doesn't HONESTLY look several years down the road. They flat out don't look beyond 6 years. How many council members asked for a long-term budget projection that goes out for the duration of the debt payments before agreeing to borrow another 10 million dollar? 

BUT THAT'S UNHEARD OF!!! Not true and irrelevant. 

Is it a good idea? Can it be done? Should it be done? Yes to all. 

Will there be lots of uncertainty in long-term projections? YES. Of course. But if the uncertainty is so high that our financial trajectories might go wildly into the red doesn't that argue for taking on less debt? Otherwise, it is not a conservative option to borrow, it is risky.

The biggest reason to not do a long-term projection might be that the city's plans require another couple tech or housing bubbles just to hang on. If we are lucky enough for the stars to align we might not go Greek. That's why our city only gives us a 6 year financial picture when planning on encumbering future councils with more debt payments. 

Hold on, I know what you are thinking. Sure the interest rates are cheap now. But just stay tuned for the whopper when the city tries to slip in at the last minute how much the bonding will really cost. They could have told the public last week but decided that ignorance was better for the public. Too bad that information wasn't disclosed in the staff report. Too bad no council members asked for details. Too bad the council didn't vote to "consider" bonding options rather than to seal the deal without having a firm estimate (or any cap) of the cost to borrow.

You might be thinking, I took out a mortgage without projecting my income out 20 years. Households can take risks on things like buying a house. If households are wrong, they sell their house, take their equity, and downsize (at least in the old version of America). That model does not apply to a city.  

In the City of Encinitas, fiscal management policy set by the City Council and carried out by staff has served us very well over the years. For example, entering this fiscal year 12/13, the City has $9.9 million in contingency reserves, $1.0 million in budget stabilization reserves, and $2.7 million in fund balance (future projects). Let’s discuss the need and types of reserves.
Kerry Miller said that sort of  thing right before and after the last time they borrowed over $20 million for fire stations, the hall park and the library. Yes they already borrowed once to build the park. That borrowing and the fact that they didn't build the park or fire station 1 was what allowed the city build up their reserves. (Remember the justification in 2006 that the fire stations had to be rebuild ASAP or it would cost the taxpayers tons of money for fire station maintenance? What happened there, hum?) 
A contingency reserve is typically established as a percentage of either expected revenues or expenses. It should grow over time. There is no magic in how these reserves are calculated; cities throughout California have a variety of ways in which they do the calculations for their organizations. 

This is no doubt a response to the city getting caught playing accounting games with the budget to inflate the reported reserves. The CM doesn't like to speak in public where he can be questioned on the record. Probably for the same reason, he avoids responding by email about questionable actions the city has taken. Notice that the CM's blog doesn't allow for commenting (just like Andreen's blog and Encinitas You Need Us), nor does the city provide a means for public dialogue about these editorials. The potential for one-way propaganda is pretty high especially when there is a lot of (opaque) trust and little transparency.  
The objective with this kind of reserve is that when there is a downturn in the economy and revenues are lower than expected (long-term), the organization can “back fill” revenues with reserves and continue services to the public for a couple of years. At the same time, the organization then has time to decide how to resolve its budget problems.

Remember, right before the downturn when the city was warned by the public of the coming fiscal danger? The city's Finance Director honorably stated squarely in a public forum that the city was NOT prepared for an (obviously approaching) economic downturn. That was the most commendable act in the public's interest that has occurred at city hall in the last decade (side note: the Finance Director seemed to speak less in public after that).

The stabilization reserve is different in that it should not accumulate over the years; rather, it is an annual amount set aside in the budget to mitigate single-year issues. For example, if the State of California reduces local revenue, projected revenue does not materialize, or there is an unplanned expense, then stabilization reserves can be used.
Good. It shouldn't be counted on when figuring out how much is available for new capital projects.

In addition to reserves, the Encinitas City Council has set policy around the zero-based budgeting process to develop our budget and adopt a two-year fiscal plan. The zero-based budgeting approach requires that we really think about what we need to accomplish in any given year and what the costs might be. This means that the budget is well-examined and vetted for the City to continue serving the public. Zero-based budgeting differs from traditional incremental budgeting that occurs in most government organizations where budgets grow from year to year without a real connection to what will get done.

This has been total bullshit. The former city manager could not show any evidence that the city actually executed zero-based budgeting. Requests for examples resulted in a single budget item change and an admission that the new budgeting hadn't actually resulted in any notable changes to the budget that wouldn't have happened anyways.

 Is the new CM willing to show the public what budgetary decisions he has made and explain why? Or, will it be more backroom decisions, based on trust rather than transparency? 

While the City Council adopts a two-year plan, staff prepares and presents a five-year fiscal plan that allows us to see what downstream impacts are coming our way and provides for more timely budgetary decisions to occur. A great example currently under implementation is Council’s pension reform strategies that will help offset Public Employee Retirement System (PERS) increases over the next couple of years.
Pension Reform = give staff a raise to cover an inconsequential increase in the amount they pay out of THEIR share of the pension contributions to CalPERS! This increases their lifetime payouts without reducing their paycheck. SWEET. The public was better off without "PENSION REFORM"

Dizzy Yet?

Good, prudent and consistent fiscal management in Encinitas has allowed our organization to serve the community at appropriate levels in spite of the recession that has swept across America. Additionally, the City Council has been able to move forward on critical initiatives, most recently improving the fire and medical response times in Olivenhain and on July 11th approving to move forward with the complete construction of the Encinitas Community Park and improvements at Moonlight State Beach.
Prudent = Borrow?  

They borrowed $20 million right before the downturn. If they hadn't they would have been forced to cutback. They even tried raising fees fees and taxes (e.g. Prop C). 

Here in Encinitas, we remain focused on the prudent uses of citizen tax dollars to continue providing an exceptional quality of life to our residents and businesses.

That is what he says, but ask the CM about questionable transactions and expect obfucation, stonewalling, and being strung along. Need examples? We've got a bunch of questions for to try for yourself. So much fun!

Let's stay connected, Gus Vina

Love the show.

Power to the Sharrows Everywhere

Full Disclosure: The Leucadia Blog spoke with members of the Leucadua 101 Main Street Association  (the author is board member of this organization) and the Encinitas Bike and Ped Committee to create this op-ed piece.

The beautiful 101 corridor from downtown Encinitas through Leucadia is an irresistible, if not unavoidable stretch of pavement for the spandex set. Every weekend, throngs of bicyclists of all shapes, speeds, sizes and levels of experience take to this highway despite the many dangers that wait hidden like roadside IED's.
This is fact: most of the highway lacks marked bike lanes, which forces bicyclists to choose between braving the deadly 'dooring zone' (where a parked driver might unwittingly open a door into the biker's path) or taking up the full right lane, which often leads to honked horns, middle fingers and other forms of road rage from automobiles directed towards bicyclists. It is the bicyclists' right under California state law to take up the right hand lane where no bike lane exists and it is unsafe to ride to the far right, but few drivers are aware of this fact. Some bikers also fail to realize how dangerous it is to hug the far right lane. When there are lines of parked cars, the biker hugging the far right is often invisible to drivers from side streets until the last moment of approach.

Bike vs. car is a scene all of us 101 dwellers, drivers, pedestrians and bikers have at least witnessed, if not had a first hand experience with. And it's one experience I think we'd all be lot safer and better off without.

Imagine...all the bikes and cars...sharing all the road...
The Leucadia 101 Streetscape project aims at such a utopia and the actual, community and City Council approved PLAN includes reduced car lanes (aka “road diet”), comfy 8’ bike lanes both south and north bound, traffic calming measures, diagonal parking and plenty of additional features designed to keep bicyclists, pedestrians and drivers a whole lot safer along the coast highway 101.  However, the new Streetscape is still a long way off. Breaking ground in 2016, the project is a well deserved, but overdue improvement to our little corner of the world where foot power rivals oil as a means of transportation.

But the citizens of the Encinitas Bicycle and Pedestrian Committee are not waiting around for a Streetscape project or the next tragic accident to make our highway safer for all. In fact, they pointed out a great opportunity to make things safer--on the cheap--and rather quickly. This Fall, the City of Encinitas will be repaving  the coast highway from La Costa to North Court (Pannikin) for 'slurry seal prepping'. A tried and true method for getting cars and bikes to share the road more peacefully called 'sharrows' dovetails beautifully with this regularly scheduled repaving project.

Sharrows are chevrons (>>) with a picture of a bike painted onto the road. These sharrows will indicate that cars and bikes must share the right-hand lane. Additional signs reinforcing this law are to be implemented every 1/8 of a mile on preexisting traffic directing structures such as light-poles.
Sharrows have been the toast of downtown Long Beach for 3 years now. In addition, neighboring Oceanside, Carlsbad, and Solana Beach will be implementing sharrows on their roadways in the near future. Funding for the portion of the proposed project between North Court and La Costa would be fully covered by the City’s repaving effort. The cost for the sharrows and signage for the portion of Coast Highway 101 between North Court and K Street is estimated to be $7,500, and funds for those improvements are available from the Traffic Safety and Calming Program Fund through the City.

At the June monthly hearing, the Encinitas Traffic Commission approved a plan to add sharrows and “share the road” signage to the Highway 101 during the slurry seal repaving project. The goal of the sharrows is to spread a little education and awareness, which will lead to a whole lot more sharing of the road between bikes and automobiles.

It is important to note that this plan still needs approval from Encinitas City Council in order to be fully implemented. The sharrows plan is on the Council agenda this Wednesday, July 18th at 6:00pm.
The concept, put forth by the Encinitas Bicycle & Pedestrian Committee and City staff, has garnered support from DEMA (Encinitas 101 Main Street Association), Leucadia 101 Main Street Association, the San Diego Bike Coalition, SANDAG’s Regional Bike Representative and many other concerned citizens. The Traffic Commission voted 5-0 to approve this plan as well. Rob Blough, head of traffic engineering for the City of Encinitas has been credited for genuinely listening to the concerns of the Encinitas Bike and Ped Committee and helping to push the plan forward. 

This vote should be a no-brainer. Having the sharrows plan approved would be a big win for safety and democracy both and hopefully encourage more initiatives to originate from the citizens of Encinitas.

Tuesday, July 10, 2012

Friday, July 06, 2012

Wednesday, July 04, 2012

Keep America Funky

Just took a stroll around Neptune Ave. Lots of super fun driveway parties happening.
God bless 'merica and God bless Loocadeeah!

Funky Little Parade Today!

Sunday, July 01, 2012

Leucadia after dark

Homegrown jazz group The Mattson 2 headlined Summer Fun on the 101 to past sunset.
Homegrown jazz group Boaz & Friends supplied the live soundtrack to the Orate brothers surf film L-Town (thanks DEMA for loaning that amazing screen).
It was amazing to see so many Leucadians enjoying our little Roadside Park. A unique venue!