CATER makes the Big Time. (A press release.)

This came OVER THE DAMN TRANSOM from CATER’s press secretary, our dear Mary Daniels.  As the Orange Juice Blog top honcho I think of CATER as one of OUR babies, and I am proud of punch of them…. – Vern

Anaheim’s $300 Million-Plus Bond Deal Terminated by Citizen Activist Group

On Friday, May 16th, the City of Anaheim announced that Citigroup had pulled out of their agreement to purchase bonds being sold by the Anaheim Public Financing Authority (APFA) in reaction to a lawsuit filed by non-profit group CATER, the Coalition of Anaheim Taxpayers for Economic Responsibility. The group filed the lawsuit to prevent the sale of lease revenue bonds that CATER called, “a violation of the City Charter and the public trust . . . nothing but a clear work-around to avoid getting approval from voters.”

Around $180 million of the bonds were earmarked to fund the expansion of Anaheim’s Convention Center and a new parking garage, with interest and balloon payments inflating this to around $400 million by the time of repayment. CATER’s position is that the Convention Center expansion is a great project in principle, but its funding plan needs clarification and absolutely must follow the the City Charter. The Charter states that an expenditure of this magnitude must be put before the voters to decide.

The remaining balance included $20 million that had been previously described as intended for firehouses and street repair, but two Anaheim city council members now acknowledge that this is to replenish the General Fund, despite a City policy that dictates a “pay as you go” policy. CATER President Cynthia Ward compared it to “tapping into one’s home equity to pay the light bill at best–and at worst robbing from future residents to create a slush fund today.”

City documents also show significant borrowing to refinance bonds that were about to be repaid, including those with “balloon payments that previous Councils had used to minimize their short-term fiscal shortfall.” CATER assumes that this would be covered by the remaining $65 million planned for immediate sale.   The remaining $35 million would have remained authorized.

Cynthia Ward of CATER claims that  “having had the can kicked to them by city councils of a previous generation, today’s Council wants to pack those costly financial instruments into an even bigger can, and then kick it even harder down the road to future generations.”  She concluded that “eventually the General Fund would collapse under this needless strain motivated by short-term political interests.”

In their lawsuit, CATER held that the bond issue was illegal because the dissolution of Redevolopment Commissions by California State lawmakers left the Anaheim City Council itself serving as their own Redevelopment Agency’s successor for the purpose of winding down previous commitments. It was not formally obligated to pile on any new debts which had been tentatively agreed prior to RDA’s demise.  CATER stated that “the Joint Powers Agreement governing APFA is now an agreement between the Anaheim City Council and itself.  As such, its lawful powers cannot exceed that of the Anaheim City Council, which is required to take such bond proposals to a public vote.”

CATER’s General Counsel, Greg Diamond, who is also a candidate in the June 3 election for Orange County District Attorney, is running on an anti-corruption platform against longtime incumbent Tony Rackauckas.  Diamond says that nonpartisan CATER can transcend party politics partisanship because all who are involved “are speaking from a principled position in favor of good government, which represent the best of our different parties.” He adds, “let’s follow the law here–and let the voters decide whether to engage not only in expanding the convention center but also this  huge “balloon payment’ expenditure.”

CATER is a non-partisan organization that steers clear of involvement in electoral politics.  Its Board and staff range from conservative Republicans to liberal Democrats who are united by their shared loathing for public and private corruption.  They contracted this lawsuit because they believe that honest and proper stewardship of Anaheim’s resources demands that the wisdom of such large expenditures to city funds must be left to the voters to decide.

Anyone interested in becoming a member of CATER can contact president Cynthia Ward at

[See an earlier story this weekend for a list of CATER’s reasonable demands…]

About Admin

"Admin" is just editors Vern Nelson, Greg Diamond, or Ryan Cantor sharing something that they mostly didn't write themselves, but think you should see. Before December 2010, "Admin" may have been former blog owner Art Pedroza.