PATTOO, Part 1: Kris Murray Out-Kleptos Herself with the “Anaheim ‘Taxpayer Protection’ Act”


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kris murray dictator

You can say this about Anaheim Councilwoman Kris Murray, it doesn’t take her long to toot her own horn following a vote of the Council that goes her way.  It seems as soon as the City Clerk reads off the usual majority voting bloc split, a new press release is heating up our email servers.   How DOES she manage to do it all?  Oh yeah, that’s right, she pays Communications Lab owner Arianna Barrios $100 an hour to do it for her, while denying the Mayor the hours HE needs to run HIS department.   (See Murray’s grandstanding at the bottom of this piece for the grisly details.)

Murray’s tireless knack for using public office for the gain of her friends and campaign supporters is frankly getting old. Take, for example, this little gem from Anaheim’s last Council meeting on March 3.   Yes, Kris is now pushing what she has labeled the “Anaheim Taxpayer Protection Act.”   There are no protections for taxpayers in this grandstanding bit of legislative pufferydrunken sailorsThe Act does nothing to slow down the massive spending habits of the Council majority, nor does it rein in the Joint Powers Authorities headed by the SAME five people, three of whom spend like drunken sailors at our expense. 

Wait, drunken sailors stop when they run out of money!  I retract my slur and apologize to inebriated seamen everywhere.  The only change the Murray charter change provides is to make it harder for the Council majority to put a new tax proposal before voters even if more than 2/3 of them support it.

“PROTECT” US FROM WHAT?

During Tuesday night’s Council meeting, I used my paltry 3 minutes of Public Comment time to ask the author of Agenda Item 11 to please explain what she is protecting the taxpayers FROM in this “Act.”   And as I recall I never got an answer, not a real one.  We did get the usual spin and double-speak wrapped in the batter-dipped coating of Policy Wonk buzzwords that make Murray sound a lot more politically astute than she is.

kris murrayThat’s OK, I answered for her, not expecting anything else.  It seems, said I, that Ms. Murray is protecting the taxpayer from the undue burden of having to VOTE on something.  Indeed Ms. Murray seems to think voting is such an enormous cross to bear for Anaheim’s citizenry that she has gone out of her way to prevent our being bothered by it in pretty much every opportunity presented to this current administration. Let’s review the times Murray has “rescued” taxpayers from having to vote on anything since taking office:

  • $158 Million bed tax kicked back to the developer.  TWICE.  15,000 citizens signed petitions demanding the right to vote before TOT could be diverted from the General Fund again.  Murray fought against the effort, and frankly led the charge to strip Mayor Pro Tem Galloway of her honorary title for her participation in the completely legal petition effort.  (But it is okay for Mayor Pro-Tem Kring to use her title and staff time for a useless grandstanding Resolution outside the authority of the City Council for a Charter School that didn’t gain enough legit signatures to pass.  Sure, that seems fair.  NOT.)
  • Fighting District Elections.  Citizens of Latino heritage asked respectfully for Council help in putting this before voters, and were rejected.  They sued, and the Council spent MILLIONS preventing that choice from going to a vote.  Only when the very uncomfortable deposition and discovery process was about to begin did they finally cave in and permit the citizens of this fine city to vote.  What were they afraid of?  Supposedly they were convinced public opinion was on their side (hadn’t Curt told them so?) and Matt Cunningham assured them quite regularly that Anaheim residents would soundly reject this obvious attempt by “the extreme left” to hijack the electoral system.  Uh…wrong again.  Anaheim approved the District Elections changes overwhelmingly, even in those far-right precincts where Kashkari actually led the Governor’s race.  So much for the left wing conspiracy, and so much for Cunningham’s finger on the pulse of Anaheim’s electorate.  Hey, who is Matt backing for 37th SD again?
  • And who can forget the refusal to let the public vote on $200 million in bonds (REPAID AT A TOTAL OF HALF A BILLION DOLLARS) to expand the Convention Center for the benefit of a very small segment of our business community?  Rather than put the item on the Council agenda as scheduled, which offered time to get it onto a ballot with the Charter Changes, staff stalled and delayed for months until the Agenda Item came too late for the June ballot.  This offered an excuse for the Council majority’s voting bloc (absent the Mayor who opposed and Vanderbilt who was not yet there in 2014) to approve the expense in the name of time constraints, claiming that waiting for voters to approve the bonds will take too long. We’ll discuss all that in a future post.

For now let’s stick to Kris Murray’s repeated actions refusing to allow voting on various issues.  It’s no surprise she now wishes to codify an even higher benchmark to meet before future leaders appeal to the taxpaying public to close revenue gaps unanticipated in today’s economy, despite the very real problems that may be facing tomorrow’s citizens.  Sadly the problems of future generations lead back to the very actions we are participating in TODAY.

HOW TO SCREW FUTURE GENERATIONS IN ONE EASY STEP

screwA number of questions were asked Tuesday night, and very few answers were provided. That lack of answers was inexcusable.  As recently as the previous City Council meeting, Lucille Kring demonstrated to us that smart phones are perfectly capable of getting a signal in the middle of Council Chambers, (yeah, we caught that) and that the Finance Director, Debbie Moreno, could have resolved some key issues with a simple Google search.  Seriously, we pay Debbie a good salary, well into six figures, yet she can’t buy an internet-ready iPad?

Since staff has failed to do their homework. I have taken the liberty of doing it for them.

Questions and answers are summarized, and not based on an exact transcript, although I have it on good authority that the elves kept in the Orange Juice basement for such purposes are scrambling to transcribe the last Council meeting for us.  We shall check on the supply of quills, ink, and parchment for the elfin workload. Meanwhile this exchange is my own loose summary – feel free to jump on in if I got anything wrong.  (Oh, I know you will….)

  • Mayor Tom Tait noted this measure would impact future Councils who might need to raise taxes in desperation to close a funding gap. Finance Director Debbie Moreno was asked about the impact to our bond ratings if it becomes harder to put that kind of revenue remedy on the ballot.
  • Councilman James Vanderbilt asked a similar question about refinancing our existing bonds in the future and if this would change our credit rating for that purpose.
  • Finance Director Debbie Moreno, the highly paid professional upon whose expert advice the Council is expected to rely for complex issues that affect hundreds of millions of dollars in public funds, GUESSED at a half answer. She could not tell without speaking to the bond agencies, and of course the Council majority had no intention of waiting for another meeting to let her speak with the bond rating agencies…but she GUESSED that the rating agencies would be more concerned with whether voters approved a tax increase to cover funding gaps than concerned with how easily the Council could put something on the ballot.  Nobody thought to point out that voters could not approve something if it was impossible to put it on the ballot.

girl searching on phoneOur City Treasurer, whose JOB is to answer questions related to bonds, has not been seen or heard from in several years (and may even be imprisoned in the broom closet next to Debbie Moreno’s office and fed the occasional scrap slipped under the door.)   But if Moreno couldn’t stop and ask the Treasurer for his expertise, and Murray wasn’t about to let us stop and ask the bond experts, here is where a quick Google search on a handheld electronic device would have told Moreno in SECONDS that she was wrong.  Indeed, it turns out the very scenario of which both Tait and Vanderbilt had inquired has taken place in Anaheim once before, and offers us an easy answer!  Voila:

Prop. 218 Spurs Downgrade of Anaheim’s Credit

Jan. 24, 1997;  MARLA DICKERSON – TIMES STAFF WRITER

ANAHEIM — Citing concerns that the recently approved Proposition 218 will hamstring the ability of local government to raise tax revenues, Moody’s Investors Service Thursday downgraded Anaheim’s municipal bond rating.

Anaheim now becomes the fifth California city hit with a lower rating from Moody’s since voters approved the anti-tax measure last November. Los Angeles, San Diego, Sacramento and Fresno also have seen their credit ratings decline.

Thursday’s action comes just as Anaheim is preparing to sell approximately $500 million in bonds for street improvements to accommodate the upcoming Disneyland expansion.

Read the rest HERE

oops

Ummmm….

So as it turns out our expert upon whose advice our leaders rely when making decisions worth hundreds of millions of dollars does NOT understand the very basic nature of bond rating structures.  Our Finance Director also did not know they consider lack of tax raising ability to be a liability AND they DID downgrade our bond ratings when that happened with Prop 218’s passage in 1996.  Our crack team of experts also failed to even stop and look it up before answering.  Go team!!!

cheerleader upsidedown go

SIDE NOTE: The 1997 Disney expansion bonds that divert 100% of Disney tax funding for property, sales, and tot revenues from Grand Cal Resort, Downtown Disney, and Cal Adventure Park were not in any way dependent upon taxpayers – ON PAPER – because they were to be paid from the increased revenues expected to be generated by the new Disney developments.  Just as the Convention Center bonds of 2014 are paid by increased revenues EXPECTED to be generated, but of course the General Fund will be covering the payments whether those revenues materialize or not.

So in theory the taxpayers SHOULD not be on the hook for those bonds (and Disney guaranteed the first $250K on the 97 bonds) and yet… and yet the bond rating agencies downgraded Anaheim’s ratings when Prop 218 made it harder to pass tax increases that might be needed to cover bond payments. 

Which means somewhere in the back rooms of the bond rating agencies they understand what the Anaheim City Council really, really, really does not want US to know:  If expected revenues do NOT materialize from the Resort, taxpayers of Anaheim ARE on the hook for those bonds, oh I’m sorry – “LEASE PAYMENTS” to cover the bonds – and the rude reality is that someday Anaheim may have to choose between cutting cops to below the already dangerous levels we have today or raising taxes, in an effort to keep pace with bond payments that are ESCALATING over time.  Just sayin’. 

[We now return to the Murray non-resolution of a non-issue already in progress.]

Finance Director Debbie Moreno also offered a miscalculation on how the bond rating agencies consider our credit worthiness as a municipality.  She opined that the bonds were based on current revenues meeting the lease payments which in turn pay the bonds, and that there is no need to pass a tax to cover the payments. This, of course, is based on today’s dollars.

WHAT HAPPENS TOMORROW?

The lease payments tied to the bond payments will rise over time.  That is a given and we can see the increasing payments in the EMMA MSRB tables tied to the 1997 bonds for the Disney expansion.  By 2037 those payments will eat THREE TIMES more than ALL of the TOT collected in total today.

Series A bonds don’t start repayment until 2024, and when they do kick in they are whoppers.

  • 2024 $37,465,000
  • 2027 $32,900,000
  • 2037 $168,850,000

SERIES B still has one more payment due in 2020, $39,970,000

SERIES C has one more payment to cover, in 2016, for $33,595,000

disney freakyThis is only the 1997 bonds for the LAST boatload of goodies that taxpayers covered for Disney.  We have not yet addressed the payments on the Convention Center Bonds.  That is coming.  Go to the EMMA site for MSRB and check how many bonds are outstanding, most of them floated by the Joint Powers Authorities used as an end run to get around the Charter requirement for voter approval.

Those bond payments are also tied to the City’s most volatile and unreliable income stream – TOURISM.  We know that when tough times hit, families cancel vacations. Businesses tighten travel budgets. We know it because we have lived through it.

As recently as 2012 Moody’s downgraded our 2008 Bonds because of a long term negative trend in our economy. One of the factors they stated would make it worse would be taking on significantly more debt. This was before we committed to HALF A BILLION DOLLARS in bond payments for the Convention Center expansion.

Anaheim Finance Director (and de facto Treasurer) Debbie Moreno.

Anaheim Finance Director (and de facto Treasurer) Debbie Moreno.

Of all people at City Hall, Debbie Moreno should know better.  She should know better as a finance professional, and she should know better from her own personal and career experience in Anaheim.

Debbie Moreno was appointed as Finance Director in July 2012.  She had been Acting Finance Director since November 2011.  She initially had worked for Anaheim beginning 2001, but left in January 2006 to become the City of La Palma’s Director of Finance, and returned August 2007 as Deputy Finance Director for Anaheim.

Moreno of all people should recall the massive financial hit Anaheim took following the 9-11 disasters when air travel ground to a halt and nobody much felt like a vacation was a good thing to be doing.  She left Anaheim only to return just in time for the worst of the Great Recession to take down our funding (while then Mayor Pringle kept spending like the end of time, siphoning off the Reserves to backfill a Public Works budget gone wild.)

Debbie Moreno has been with the City in years when revenues did NOT appear to meet the demands of those bond lease payments, and yet she “guesses” at an answer for our leaders.   At some point the phrase “fiduciary duty” really needs to come up in conversation with her.

But first we have that talk with the Council majority. There is so much to say on this subject, and they grant us merely 3 minutes at the microphone to say it.  But then I remember, I have the keys to a BLOG.  To be continued…

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About Cynthia Ward

I am a truth-teller. It gets me in trouble. But if you ask me if a dress makes you look fat, I will tell you so, and help select another, before you go on television and realize it for yourself. My real friends are expected to be truthful with me as well. A secret shared will be taken to my grave, but lie to me, and it will end up here…on these pages… especially if you are tasked with the stewardship of public resources. I am a registered Republican who disdains the local GOP power structure, a born-again Christian who supports everyone’s right to spend their lives with the partner of their choosing. I am a wife, a mother, a daughter, a sister. I am a loyal friend to those who merit that friendship and when crossed I am a bitch with a capital C. I do not fit into a box, nor do I see others through the stereotypes that politics and public affairs so often tries to shoehorn us into. I think for myself, and so do you. Welcome to our shared space in this world.