Brea’s Folly, Part 5: How Proponents’ Funding Plans are Deceptive (and Ridiculous)


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Fool and His Money Calculations

The other main local political blogger in Brea showed up on the Facebook page I had set up to turn people out for today’s meeting — sure, go ahead, read it and like it! — and dropped this comment there:

Keeping the facts straight, Council should issue an RFP not-to-exceed $9 million for (Option 2) parking, trash and police annex only. Cost will be managed: $3.7 million from returned RDA, $1.5 million balance of Valencia Drive fund. $300 thousand from Gas Lamp Square leaving a balance of $3.5 million. Council’s choice, fund with reserves or bond. REPAID via valet and cell tower revenue and incremental increase in sales tax. Net cost to city/tax payers is ZERO.

(Don’t you love that the parking structure includes taxpayer-funded trash receptacles for the businesses it serves.  Yessir, that’s what taxes are for!)

Because this blogger seems to pride himself on being a well-briefed lickspittle for the local wealthy and powerful, this is probably what they have in mind.

It can be decomposed into the following assertions and arguments:

  1. Council should issue an RFP not-to-exceed $9 million
  2. for (Option 2) parking, trash and police annex only.
  3. Cost will be managed: $3.7 million from returned RDA
  4. $1.5 million balance of Valencia Drive fund
  5. $300 thousand from Gas Lamp Square
  6. leaving a balance of $3.5 million.
  7. Council’s choice, fund with reserves or bond.
  8. REPAID via valet and cell tower revenue
  9. and incremental increase in sales tax.
  10. Net cost to city/tax payers is ZERO.

Let’s see if we can knock down all of the pins with one ball.

  1. The Staff Report is quite clear: $9 million won’t be enough.  Try almost $13 million.  So the first thing that a rational City Council should do is figure out who would pay for any cost overruns in case the self-interested salespeople are wrong and the professional estimators and budgeteers are right.  This alone could take hours.  If they don’t do it, then the default is that the City is left holding the bag.
  2. This is the proposal of Big Landlords Dwight Manley and Mark Caplow, who have complained that their plan was overlooked because some stinker did the math and saddled it with a realistic price tag.  (The nerve!)
  3. There’s no guarantee, at all, that the old Redevelopment money will be distributed.  So, again, a responsible Council must ask: who pays more if it isn’t?  If there’s no clear answer, then the answer is “the City.”
  4. Staff lists no such discrete fund as a possible funding source, so this is presumably fungible money that is in practice best considered part of the General Fund.  Also, while Brea has a Valencia Avenue and a Valencia Street, unlike neighboring Fullerton it has no “Valencia Drive.”  The City website turns up no hits.  So, I’m a little suspicious here.  But presuming that he means “Valencia Avenue,” which is a rapidly developing area far in the City’s east, why exactly do we want to have the already highly subsidized Downtown cannibalize an area that probably has a more reasonable call on City support to get established?
  5. Gas Lamp Square is, I believe, owned by Dwight Manley, so yay for him for kicking in 1/42 of the estimated cost.  (I wonder what terms or conditions might apply.)
  6. The balance isn’t $3.5 million, because the cost wouldn’t be $9 million.  And the RDA funding is speculative.  And there’s no sign of a Valencia Drive Fund.  So the only thing we actually have to count on is the Gas Lamp Square contribution, leaving an actual balance of $12.35 million.  (If that matters to anyone.)
  7. This is where the City can contribute something to funding that the Downtown Owners can’t: the ability to deliver highly desirable tax-deductible municipal bonds.  (See, Anaheim?  I’m not against bond indentures when they’re done right!)  But that leaves a whole lot to be worked out, as in the rosy projecting Downtown Owners should have to backstop the deal with some assets.  (Like, oh, buildings?)
  8. Repaid with valet and cell tower revenue?  Funny thing: the Downtown Owners believe that this revenue belongs to them, but so far as I can tell not even their City Council allies believe that.  Most everyone agrees that this revenue belongs to the City, so repaying the City with its own revenue, while creative, is also sort of nuts.  And anyone from the City who agreed to take they own revenue as payment is completely nuts.
  9. An “incremental increase in sales tax.”  Did I mention that the guy who wrote the proposal considers himself to be a Tea Partier?  (Well, at least he chose a regressive tax!)  I love this idea because, due to this little thing called Prop 13, I believe it would require a 2/3 vote of the public, which it wouldn’t get.  So we’d have to plan for who makes up that revenue when the “incremental sales tax increase” vote fails — and, as above, if there’s no plan to the contrary then the burden would fall onto the City.
  10. Net cost to city/tax payers is ZERO.”

Zero.

Wait a minute.

ZERO?  Did he really say ZERO?

Hoo-boy.  Let’s work backwards up the list.

  • Sales tax increase would be paid by ________?  [TAXPAYERS!]
  • Cell tower and valet funds would come from ________? [THE CITY!]
  • The “balance” would not be $3.5 million, but as much as $12.35 million, and if there’s no firm commitment to the contrary the funds for any overage would come from: [THE CITY!  AND THUS FUTURE TAXPAYERS!]
  • Valencia Drive Fund would come from _________?  [THE CITY!]  (Unless it’s imaginary, in which case it would come from something like Faeries or Elves.)
  • Gas Lamp 1/42 contribution would come from ________? [LANDLORD!]  (yay!)
  • Redevelopment money belongs to ________? [THE STATE!] (And it may stay that way.)
  • So the idea that the Net cost to city/tax payers is ZERO is _______?”  [CRAZY!  FOOLISH!  RECKLESS!  IRRESPONSIBLE!  DANGEROUS!]

See what kind of person I have to argue with in Brea politics?  It almost makes me miss having to deal with Kris Murray and Matt Cunningham.  [ALMOST!]

 


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About Greg Diamond

Somewhat verbose worker's rights and government accountability attorney, residing in northwest Brea. General Counsel of CATER, the Coalition of Anaheim Taxpayers for Economic Responsibility, a non-partisan group of people sick of local corruption. Deposed as Northern Vice Chair of DPOC in April 2014 when his anti-corruption and pro-consumer work in Anaheim infuriated the Building Trades and Teamsters in spring 2014, who then worked with the lawless and power-mad DPOC Chair to eliminate his internal oversight. Occasionally runs for office to challenge some nasty incumbent who would otherwise run unopposed. (Someday he might pick a fight with the intent to win rather than just dent someone. You'll know it when you see it.) He got 45% of the vote against Bob Huff for State Senate in 2012 and in 2014 became the first attorney to challenge OCDA Tony Rackauckas since 2002. None of his pre-putsch writings ever spoke for the Democratic Party at the local, county, state, national, or galactic level, nor do they now. A family member co-owns a business offering campaign treasurer services to Democratic candidates and the odd independent. He is very proud of her. He doesn't directly profit from her work and it doesn't affect his coverage. (He does not always favor her clients, though she might hesitate to take one that he truly hated.) He does advise some local campaigns informally and (so far) without compensation. (If that last bit changes, he will declare the interest.)