News Roundup

A few bits of news from Claremont and elsewhere:

• If you've got any cans of old paint, used motor oil, used batteries and such taking up garage space, now's your chance to get rid of the stuff. The City of Claremont is holding a Hazardous Household Waste Roundup this Saturday, February 6, from 9am to 3pm at the Claremont Corporate Yard located at 1616 Monte Vista Ave.
  
  
  
• We didn't see it on the City of Claremont's community events calendar, but this Sunday is the first Sunday of the month, which has in the past been the day the City Council sets up its booth at the Farmers Market in the Claremont Village from 8am to 1pm.
  
  We don't know if the council booth is another casualty of City Hall's budget cutting.
  
  
  
• Meg at M-M-M-My Pomona says the annual Laura Ingalls Wilder Gingerbread Sociable is tomorrow from 1pm to 3pm in - where else? - the Laura Ingalls Wilder room of the Pomona Library at 625 S. Garey Ave. in downtown Pomona. There'll be storytelling, gingerbread, cider, and more. Kids of all ages, from one to 100 and older, are welcome.
  
  
  
• The Fresno Bee has an article about Claremont High School track star Kori Carter signing a letter of intent with Stanford University. Carter will be competing in the high school division of the Run For the Dream Indoor Track & Field Invitation at Buchanan High School in Clovis.
  
  While she's there, Kori can give Claremont's regards to former CUSD superintendent David Cash, who left us for Clovis Unified last year.
  
  
  
• The Sacramento Bee's Kevin Yamamura reports that California not only has the worst Standard & Poors credit rating of any of the 50 states, it is also worse than several countries:
  

  At A-, California still has the worst credit rating of all 50 states. Illinois comes closest to California with an A+ rating.
  
  Countries in the Times' chart with the same A- rating as California include Estonia, Libya and Poland. That's better than Thailand and Greece (BBB+) but not as strong as Botswana, the Czech Republic and Israel (A).

  
  Another sign that Claremont's and CUSD's budget woes won't be going away anytime soon.
  
  
  
• Following up our friend Glenn Southard and his sidekick Michael Busch, we read in the Desert Sun that Glenn's retirement includes almost $162,000 for unused vacation days and sick time he's banked in his time at the city of Indio.
  
  Here's what the Sun said about the details of the deal:
  

  Indio's Glenn Southard is the one of the highest-paid city managers in the state, which is part of the reason for his large final payment. He makes more than $300,000 a year.
  
  According to estimates provided by the city Tuesday, Southard has banked 582.35 hours of vacation, 1,118.55 hours of sick leave and 2.5 hours of administrative leave.
  
  Under the terms of his contract, Southard is entitled to all of the vacation time and half of the sick leave when he leaves City Hall.
  
  Administrative leave — a perk relatively common for city managers — cannot be cashed out, so he would have to use it before leaving, according to assistant to the city manager Mark Wasserman.
  
  That means Southard, who makes $148.74 an hour, would be entitled to 1,087.625 accrued hours of leave — worth $161,773.34.

  
  The Desert Sun tells us that Indio's golden handshake did get approved, by the way, and some people in there are not too happy about that, not that they are people who count for anything.
  
  Coincidentally, the Desert Sun also had an article about how to avoid being a scam victim.

Mailbag

California's elected officials have been so preoccupied with the current budget crisis that they haven't begun to grapple with the issue of public employee pensions, which pose perhaps the greatest long-term threat to state and local governments' pocketbooks.

Years of overly generous, unrealistic pension benefits will come home to roost one day soon, as one of our readers observed:

DATE: Tuesday, June 16, 2009 8:43 AM
SUBJECT: officially a WTF!?!?!?
TO:Claremont Buzz

"WE want to show the governor we're angry," he said. "The union is fed up, employees are fed up."

The SF Chronicle has a database that lets readers look up the 8,000 city employees who make six-figure salaries. 3 at 50 is bankrupting governments. The state's payroll grew last year, while the budget crisis emerged in pretty stark terms. Bridget Effing Healy has a six-figure pension, and Brian Desatnik and Lisa Prasse make...well, I can't even finish that sentence, 'cause it gives me an instant headache.

And so on. I appreciate the work of a lot of government employees. Cal Fire is a terrific agency, and a Highway Patrol officer saved my life once, at considerable risk to his own. But my GOD -- government employees are fed up? "Stop, uh, paying us higher salaries than comparable employees in the private sector! And quit imposing your generous pensions on us! Don't you see how angry we are?"

Ask them again in two years.

DIY: State Budget Remedies

Okay, smarty-pants, you keep telling us how absolutely useless those state legislators are. If only they'd let you show them how to fix Sacramento's budget problems.

Now's your chance. The Los Angeles Times has an interactive widget that allows you to make your own choices about what to cut and/or what to tax.

You can find out more about what you are chopping or taxing by rolling over the item with your cursor.

Have at it!

California Bonds Get Spring Thaw

The Sacramento Bee's Capitol Alert reports that State Treasurer Bill Lockyer is ready to lift that freeze on California bond sales to the tune of $500 million. This will start the process of getting funding to some 5,000 infrastructure projects that have been stalled because of the freeze.

There's no word on where Claremont's Padua Park project falls in the scheme of things. The City is waiting on a promised $850,000 grant that the San Gabriel Rivers and Mountains Conservancy pledged last fall. Like other state agencies, the RMC sells bonds as needed to raise the cash to fund the grants it approves.

The RMC's website gives no indication as to whether or not things have changed.

More State Money Talk

Well, it didn't take long for the great state budget fight to heat back up.

Just yesterday we had a post or two about the financial problems our city and every city in the U.S. is caught up in. We also speculated that there might be more problems on the horizon. Californians were beginning to get comfortable with the notion that the geniuses on both sides of the Sacramento political aisle had solved our state's budget problems.

Now comes a warning from the state's Legislative Analyst's Office (LAO) that we're still likely to face an $8 billion shortfall, despite the budget agreement and the $31.5 in federal stimulus package money California is slated to receive.

The Sacramento Bee's Capitol Alert reported that the legislature's budget analyst, Mac Taylor declared yesterday that "the state's economic and revenue outlook continues to deteriorate." The Capitol Alert post went on to say:

"Even in the few weeks since the budget was signed, there have been a series of negative developments. Our updated revenue forecast projects that revenues will fall short of the assumptions in the budget package by $8 billion. Consequently, the Legislature and governor will need to adopt billions of dollars in additional solutions in the coming months to bring the 2009-10 budget back into balance."

Taylor had some more bad news for the state's political leaders. Because so many of the "solutions" adopted last month are temporary, "without corrective actions, the state's huge operating deficits will reappear in future years - growing from $12.6 billion in 2010-11 to $26 billion in 2013-14."

The Los Angeles Times also quoted Taylor in an article in today's paper:

California's economy in is such bad shape that Taylor's office anticipates that residents' combined personal income will be lower this year than it was last year, leading to fewer tax dollars for state coffers.

"I went as far back as 1950, and I could not find a situation in which personal income had actually declined in the state, so that's a rather unusual event," Taylor said at a news conference Friday.

Taylor's projections assume that the all of the various ballot measures the budget agreement depends on will pass in May. Those assumptions are far from certain, however. The California League of Women Voters issued a press release on Thursday coming out against Props 1A, 1C, 1D, and 1E. The League says these are bad policy:

“We oppose these measures because they are NOT the solution to our long term financial crisis, with the continuing structural deficit in the state budget and flawed budget process,” said Janis R. Hirohama, president of the League. “We make this decision with regret. We would support real reform to make the state budget process more accountable and give the Legislature and Governor effective tools to advance state priorities. However, these hurriedly drafted propositions, produced at the end of a flawed process that kept both the public and most legislators in the dark, will only make our fiscal situation worse.”

This bodes ill for the likelihood of the measures passing because you know there also will be plenty of anti-tax and small-government activists fighting the propositions. Here's the full LWV press release (click on the box in the upper right corner to enlarge):

* * * * *

In case you were curious about how we got into this mess in the first place, there's a really good video that explains how our financial house of cards fell apart. We saw this on the Original Skrip, and also saw it on the Foothill Cities blog back when it was still a semi-regular blog.

The video's 11 minutes long, but it is worth watching if you've got the time to spare:


The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Make a Move

The Sacramento Bee's Capitol Alert reports today that the special, late night State Assembly and Senate legislative session yesterday ended in the early morning with yet another standoff when it became clear that the proposed budget agreement lacked the three Republican votes needed to pass:

Sen. Dave Cox of Fair Oaks, widely viewed as a potential third vote in the Senate, voted no. He was heavily courted by Republican Gov. Arnold Schwarzenegger and Senate President Pro Tem Darrell Steinberg, D-Sacramento, throughout the night, having been called into private meetings in both officials' offices late Saturday night and early Sunday morning.

Cox emerged from Steinberg's office past 1 a.m. and pronounced that he was a no vote, saying he didn't need any more information.

Senate Democrats believe a new $10,000 state tax credit for homebuyers is enough to sway Ashburn to provide the second Senate Republican vote for the plan, however.

Less controversial parts of the package were winning passage with relative ease and little debate in both houses. But the most contentious measure, a bill that would increase a variety of taxes by a total of $14.3 billion, had not been taken up.

Support for the tax-hike package is believed to be set in the state Assembly, but Republican lawmakers in that house were unwilling to support the plan without assured passage in the Senate.

Local Projects on Hold for Now

As we wrote last week, the state's budget problems have effectively halted many infrastructure projects throughout California. For example, Padua Ave. Park in Claremont has apparently been denied $850,000 the City was counting on for construction because the state agency that provided the City grant money can't come through on its pledge due to the state's freeze on the sale of new infrastructure bonds.

Simply put, investors' lack of faith in California's credit-worthiness is causing the state to have to pay high interest rates on the bonds it sells. That's the cost of having to pay to attract skittish bond buyers. With a $42 billion deficit looming over the next 18 months, the state just cannot afford to pay what the bond market is demanding.

The Daily Bulletin has an article today about some of our area's freeway projects that are on hold through at least June, 2009, because of the state's financial problems, and the article notes that even if Sacramento passes a stop-gap measure to close the deficit for this fiscal year, that doesn't guarantee California's bond problems automatically will go away:

Ty Schuiling, who is San Bernardino Associated Governments' planning director, said the agency's plans are contingent upon the state's ability to issue bonds.

"It's not a sure thing that the projects will be delayed or not," he said.

California's ability to use bond revenues for construction projects is hampered by the state budget crisis.

And even if the Legislature and Gov. Arnold Schwarzenegger agree on a budget plan to resolve a multibillion-dollar shortfall, Schuiling noted that there could still be future difficulties if the financially troubled state cannot sell bonds.

"It's not as if bond funds will be available just by pushing a button," he said.

For investors to begin to believe in California again they're going to have to see some signs that the Legislature and the Governor's office are making some structural changes on the way budgets are done in Sacramento rather than using deficit financing and accounting sleight-of-hand to defer those tough decisions until some vague, far off future.

For Democrats, this means less spending; for Republicans, more taxes. There's just no way of getting around that, people.

Santa to Sacto: Here's Your Coal

Click to Enlarge
Sacramento's problems, some of which we discussed yesterday, aren't going away easily, and this is leaving us with the impression that our Governator and our state legislators have been decidedly naughty with our state's finances this past year. Elected officials beware: Santa's got a good memory.

The state's inability to fund its short- and long-term debt because of the Great Credit Freeze of 2008 made the New York Times yesterday. The NYT carried an article about states (not just California) having to suspend a variety of highway and infrastructure projects, and the article explained some of California's unique problems:

Last month, when the state tried to restructure existing debt with an additional $523 million offering, it had to reduce the offering by two-thirds, said Tom Dresslar, the spokesman for Bill Lockyer, the California treasurer.

“The institutional investor interest was nil,” Mr. Dresslar said.

Further, the State Legislature’s inability, with the governor, to figure out a way to deal with the state’s $15 billion budget gap has weakened the market’s confidence in California, something other states could face if the fiscal situation deteriorates.

This month, Standard & Poor’s downgraded the $5 billion in revenue bonds issued by California last month and put more than $50 billion of debt on watch for a downgrade.

“The bottom line is we are not viewed as a quality investment,” Mr. Dresslar said, adding that California is not in position to offer the sort of fat interest rates needed to get offerings off the ground.

It turns out that the financial crisis is rippling through all parts of the state. On Sunday, we wrote about the potential problems facing the city of Claremont in its quest for grant money to fund the Sycamore Canyon Park restoration.

And back on December 18th, the San Gabriel Valley Tribune had an article about the San Gabriel and Los Angeles Rivers and Mountains Conservancy (RMC) having to suspend all its projects (including ones for which funding had been approved) because the state has stopped selling the bonds that generate the RMC's grant monies.

The SGV Tribune article explained the RMC's dilemma:

The area's biggest habitat restoration agency has asked all of its partner cities to halt all new construction. "These projects literally had shovels in the ground, or at least they used to be in the ground until we told them to stop today," said Belinda Faustinos, executive director of the San Gabriel & Lower Los Angeles Rivers and Mountains Conservancy (RMC).

A project to beautify and clean up 26 acres of land near the Canyon Inn in the San Gabriel Mountains was put on hold after a planning agency lost $20,000, said Jane Beesley, also of the RMC.

Below we've posted an image of the letter the RMC sent out to its grantee cities advising them of the cutoff of funds for projects that had been previously approved. (Thanks to the reader who forwarded this to us.)

Click to Enlarge

Item #2 in the letter should be of some concern to the City of Claremont with regards to Padua Ave. Park, which is dependent on an $850,000 grant from the RMC to complete its combined Phases 1 and 1A. Item #2 states that effective 12/18/08 all state entities having expenditure control and oversight of General Obligation bond and lease revenue bond programs shall "Suspend all projects, excluding those for which the Department of Finance (DOF) authorizes an exemption based on criteria described unless the contracting entity can continue with non-state funding sources (private, local, or federal funds)."

In other words, Claremont may be on the hook for the RMC's $850,000 share of the Padua Park construction costs unless the City has an out written into their contract with the company building the park. As the latest sign at the Padua Ave. Park site explains, a good chunk of the project is supposed to be built with RMC dollars:

A funding well runs dry....

The RMC's and the state's money problems may be the reason that the other new sign at the park site incorrectly states that construction began on November 4, 2008. In fact, no construction (other than a ceremonial ground breaking in October) seems to have occurred. Here's that other sign:

City at work?

What all this means is that the city of Claremont may have to retouch that photo of the City Council taken on October 14th showing the Council receiving a ceremonial banner-sized check from Belinda Faustinos, the RMC's executive officer. It's a shame the city didn't cash that big check before the state closed the account.

If the RMC and the City of Claremont want to practice truth in advertising, they might want to use the following photo:

October 14, 2008, Claremont City Council
proudly receives $850,000 rubber check from RMC