THE GOOD NEWS: Anaheim’s City Council Majority is clearly acting on deeply felt principle! THE BAD NEWS: the principle is that Anaheim citizens should not be allowed to vote on the City’s major investments if there’s any possible way to avoid it.
CATER is in court today (in this case meaning me, with Cynthia on hand to assist me and Cory Briggs on the phone representing the Inland Oversight Committee, his firm’s own plaintiff in the case), facing an ex parte hearing on the bonds case we filed against the City of Anaheim. That is the first bonds case, as we’re preparing to file another one against this new attempt — because while some of the deficiencies in the City’s first attempt to were addressed, others were not.
The Briggs Law Firm detailed the legal reasons for our intention to file a reverse validation case on this second set of bonds — which most of you will find boring. Both in the letter below, and in Cynthia Ward’s speaking on behalf of CATER in front of an enormously hostile drummed-up crowd, we associated CATER with IOC’s arguments — but I wanted to reach out to the Council as well on a level that they would be more likely to understand. I wanted to share this with the public; now’s a good time.
July 22, 2014
Mayor and City Council
City of Anaheim
200 S. Anaheim Blvd., 2nd Floor
Anaheim, CA 92805
Statement of Opposition to Item 27 on July 22, 2014 Agenda
Dear Mayor and City Council:
I write on behalf of the Coalition of Anaheim Taxpayers for Economic Responsibility, or CATER, of which I am General Counsel. CATER is in receipt of a letter sent to you today by Mekaela Gladden of the Briggs Law Corporation, on behalf of the Inland Oversight Committee (“IOC”). That letter is attached below. CATER formally associates itself with IOC’s legal argument and admonitions to the City Council. That done, CATER reserves its right to take appropriate legal action regarding this new bond indenture.
CATER writes to you separately, and in a less formal tone than did Cory Briggs’s office, to ask a clear and simple question: why, rather than court further delay, lawsuits, and payment of legal costs and fees for both CATER and IOC, do you not simply put this proposed bond indenture to a public vote?
This proposed bond indenture is, in every substantive way, an act by the City of Anaheim, to take on speculative debt for the City of Anaheim, the costs of default upon which would have a massive effect on the City of Anaheim. (If Anaheim argues that it cannot be held financially responsible for a possible default by the new Joint Powers Authority, then it is presumably paying an interest premium for that increased investor risk.) We contend that, under those circumstances, Anaheim’s City Charter and the state Constitution require a vote of the public. While you disagree on that point, surely we can agree that reigning law permits such a vote. You had agendized financing Convention Center Expansion for your February 4 meeting, in time to place it on the June primary ballot, so you could have done so.
You apparently plan to blow past the deadline to place municipal measures on the November ballot (which you could do with permission from plaintiffs in another suit that you lost). Now, at an expense that should not have been necessary had you acted properly, you could still call a special election.
Judging from your July 15 meeting, at which you created the new Joint Powers Agreement, you seem committed to establishing a precedent that Anaheim’s citizens have and deserve no right or ability to closely examine and pass judgment on plans to finance future major public expenditures. This proposal, and your plan to combine the City Treasurer and Finance Director positions under the City Manager’s direct control, suggest that you are devoutly (and unnecessarily) committed to the principle that once Staff develops a plan for major investment, no one, and surely not the public, should be able to stand in its way. Putting aside the legalities for now, we ask, simply as a matter of prudent public policy: WHY?
Greg Diamond, on behalf of CATER
Attached: Letter from IOC
CLICK HERE to read that letter from the IOC to the City Council.
Unless I am missing something fundamental the situation appears quite simple: the bonds are paid off by abd through the General Fund, not a dedicated revenue stream (there isn’t any). Ergo (& to wit) they are General Obligation bonds and must be approved by plebiscite.
As I mentioned to Cynthia the other day: you can put kittens in the oven but that doesn’t make them dinner rolls.
This isn’t really like putting kittens in the oven. It’s more like putting kittens in a cupcake tin and then putting that in the oven — and then denying that you put kittens in the oven at all because it’s the cupcake tin that you put in the oven.
They claim that the bonds are APFA’s bonds, which may mean that they’re sort of like neither revenue or general obligation bonds. I doubt that that is what they’re telling investors.
You’ll enjoy reading the transcript of today’s hearing.
It wasn’t John Glenn in orbit – it was the Mercury spacecraft. Got it.
*P.S. can we call the ACC bonds spam-in-a-can? Did we say how much we loved Gordo Cooper? He had…the Right Stuffing!
I nominate this for the Winshipian Prize. It’s like the Hemingway Award. Sorta.
If that’s the crap they’re shoveling, someone explain to me how the city council delegated authority to issue bonds to this joint agency . . . In spite of the city charter explicitly reserving this authority for the people.
It’d be like Congress creating a treaty with the IRS to regulate what the press can publish. Absolutely ridiculous.
Much more is legal that you’d expect (or that is non-ridiculous) under the Joint Exercise of Powers Act (JEPA) as interpreted by the CA Supreme Court. But Anaheim, naturally, is taking a maximalist position here, which we think pushes things well beyond what is legal.
I’m dealing with the legality of this right now — but, legal or not, politically it should be completely embarrassing to the City. (That’s not my department when my lawyer hat is on, though.)
WE WANT A REPORT!
Calling for an ex parte hearing — “you have come into court tomorrow if you want to resist our motion!” — is generally dicey, because it prejudices the other party (lawyer speak for “sandbagging them”) which can unduly prejudice them (harm their legitimate ability to pursue their interests.)
The judge agreed that we should have at least a minimally fair chance to respond to their motion to accelerate the trial schedule, so we’ll have to get in our response by Tuesday at noon, prior to a hearing on August 18 on that question.
Now, I have work to do. I won’t have time for much blogging until next Wednesday; someone else will have to cover the “Day at the Races” series until then, including adding all of those cities that I didn’t get to.
Excellent, I have a lot in the hopper.
In a nutshell (or paper cupcake liner so we get a nice golden bottom on those kittens? FOR THE RECORD David Zenger is companion-animal-crazy, he LOVES pets and his joke was only that, a figure of speech, the only thing that gets you a butt whoopin’ from Zenger faster than corruption is animal cruelty, so save the ugly emails and get a sense of humor please)
…in a nutshell, the City’s arguments include;
CATER is holding up the City of Anaheim/APFA/Santa’s elves sale of the bonds from March 11, which is costing us money as time and interest rates go marching by, and so we have an urgency issue that needs to be heard immediately.
Read that again, go ahead. Hmm…did we blow past the annoying little detail like the Citi bond buyers BAILED on them? They did not postpone the bonds or put them into a holding pattern until they got rid of pesky CATER, they CANCELLED THEM. So CATER is holding up WHAT exactly? Well we don’t get to find that out until trial. And never mind that last Council meeting they approved the $300MM bonds AGAIN using a replacement JPA because those brats at CATER spoiled the party with the JPA they were using, So how exactly is CATER holding them up, now? Again, we find out at the Hearing…and we have to pass the healthcare bill to find out what’s in it.
The City’s other argument is that we CAN go right to trial because the only information that matters is what THEY say matters, ie the documents they have produced for public consumption. Since they believe there is NO information relevant to the case outside of those public documents (emails, staff updates, or TRANSCRIPTS of meetings etc.) then there is nothing for Discovery to reveal, nothing for a good old fashioned deposition to uncover or verify, and we can skip that whole “prep” thing and just go hammer it out right now.
Did I get that right Greg?
Now this leaves me conflicted.
As a litigant, one is always grateful any time we see opposing Counsel shoot themselves in the foot and then despite the fog of pain have the presence of mind to reload and fire again.
As a taxpayer I am mad as Hell that I am paying the salaries of people who would conjure such ridiculous statements and call them “facts” or worse-legal arguments.
We will keep you in the loop to the extent possible. And of course the offers of help have been very much appreciated, please keep them coming and remember as a 501c4 our donations are none of anyone’s business but ours (literally) we have to tell the government HOW MUCH we took in, but whose name was at the top of the check is for me and my hairdresser to decide, and if you have seen the condition of my roots lately you know I am not sharing much of anything with my hairdresser these days, so your activism is safe with me. So you too can help CATER help protect YOUR assets in Anaheim, and not worry about retaliation.
Thanks for keeping up with us. The cheerleading means a lot on the rougher days when it gets old. Citizens should not have to work this hard to get government to DO THE RIGHT THING!