It’s taken over two weeks to fully digest what was immediately apparent to me as I watched the November 6 Council meeting – my inquiry into what it really cost’s to support and maintain a paramedic service uncovered issues of much greater significance, and staff couldn’t be less pleased.
The snowball downhill became an avalanche of deceit.
I have hunted down and received, via public records requests to the City of Brea and the OC Auditor-Controller, over 200 pages of data, accounting, meeting agendas, staff reports and minutes… and invested over 1,000 hours since mid-November to review and understand them. I have more to come, one question answered always seems to lead to more questions to ask.
Here’s the really short version of what I discovered:
- The 1978 ballot initiative creating the Paramedic Tax appears to be a fraud. Not a word is mentioned in any minutes, resolutions or the ballot measure language itself that so much as a penny of the taxes collected would be spent on anything other than to create and maintain a mobile intensive care paramedic program.
- Since the RDA was dissolved in 2011, over 44% of the Paramedic Taxes collected have been used to meet RDA/Successor Agency admin costs, pass through commitments and bond obligations.
- In FY2016-17 Paramedic Taxes collected was $3.84 million. The total actually reaching the General Fund was only $2.30 million. The budget for paramedic services was $5.05 million. So, what does it really cost to have paramedic services and where did the city come up with the missing $2.75 million to cover the budget?
- Digging into the whole RDA – Successor Agency – Oversight Committee thing takes us into a completely different discussion. Trust me, we will have that discussion. There is such an egregious lack of a paper trail that we will never know the names of all the guilty parties or the full extent of their complicity.
- From what little data is available, redevelopment in Brea may have created as much as $300+ million in tax increment financed debt for which we’re still on the hook for $196 million that we’ll be paying off from now to 2036.
Back to the Paramedic Tax.
At the November 6 meeting, as Administrative Services Director Cindy Russell began to share staff’s budget update, Council member Hupp interjected a simple question to City Manager Gallardo, “Bill, I know you and staff had a meeting with some concerned citizens in regards to the Paramedic Tax… would you just briefly tell those in the audience listening what you’re doing based upon what happened in that meeting.”
Gallardo responded, “We had a meeting, a very cordial meeting, with some residents interested in finding out the history of the Paramedic Tax and what was approved. The Paramedic Tax was approved in 1978 by over 80% of the Brea voters and this tax goes towards the operational needs of the fire department…”
No, historically, an average of 44% of the Paramedic Tax collected from within the RDA areas was siphoned off to meet redevelopment obligations.
“One of the things from that meeting was how can we better account for… how can we better track the Paramedic Tax? Right now it goes into the General Fund in a lump sum through payments we get from the county then we account for the expenses through the General Fund.”
No, only the tax collected from non-RDA areas has been apportioned to the General Fund by the OC Auditor-Controller. There has never been a Special Revenue Fund created to track and manage revenue from the Paramedic Tax – we have no true record of how these monies were spent.
“At the beginning of the fiscal year we’ll establish a Special Revenue Fund to track inflow of the Paramedic Tax and also track the expenses directly to the Paramedic Program and do that on a go forward basis.”
Because we have no way to audit what we’ve done in the past since we failed to keep adequate records. It will remain a mystery.
“It’s probably appropriate to put something on our website that identifies what its use is, its purpose what its intent is. 80% of calls are medical, basic life support or advanced life support.”
Adding to the mountain of propaganda on a website that precious few Breans access on a regular basis is not an answer. How about we elect a City Treasurer who actually has the skills to act as an advocate on our part and audit the city’s finances?
And yes, 80% of calls are medical in nature… but what portion of the total workload addresses these calls? How much time, effort and equipment fulfills the Fire Departments activities including administration, building and apparatus maintenance, emergency (disaster) preparedness, fire suppression operations, fire prevention activities, regular fire ordinance compliance inspections?
Tossing out impressive sound bites, out of context and without substantiation, is a common method of distracting us from the real truth.
Councilman Simonoff joins the fray.
Councilman Simonoff asked the City Manager, “One of the subjects that came up, and maybe Jim (Markman) you’re a better resource for this question… with regards to how payments are made to the Redevelopment Agency… can that be better explained?”
Thank you Marty for immediately spotting what I did… that the City Manager tried to duck out of answering Council member Hupp’s question.
Gallardo replied, “Let me give it a shot then Markman can clean it up if I don’t say it correctly. A portion of the Paramedic Taxes along with all other taxes paid by anybody that has a property ownership in the Redevelopment Agency project area a portion of those taxes went to the RDA. By operation of law, any taxes paid in the RDA area automatically went to the RDA. That has occurred since 1978.”
Boom! There it is. “By operation of law” means, from the very beginning, revenues generated from tax increment were required by the state to pass through the RDA obligating a portion to meet RDA expenses. This is the genesis of the hoax perpetrated upon Brea’s unwitting voters, 80% of them, in 1978.
Gallardo continues, “The good thing is that the RDA’s were dissolved by the state in 2011 so they don’t exist any more. As we pay down any bond obligations in those project areas, little by little that RDA revenue, I’m sorry, that General Fund revenue lost to the city and also the Paramedic Tax that went to the RDA are slowly but surely coming back to our city for our paramedic services.”
Inside that unfortunate word salad are a truth, dissolution of the RDA was a good thing; a Freudian slip “that RDA revenue, I’m sorry, that General Fund revenue…”; and a complete smokescreen, “slowly but surely coming back to our city…” not until 2036 and we have no guarantee where the “lost revenue” will be spent.
Not to be overlooked, Council member Marick weighs in.
Council member Marick then directed a question to City Attorney Jim Markman, “Did the city have any opportunity or any say into whether the Paramedic Tax revenue went to the RDA or is that how the law was set up?” (Asked and answered… as they say).
Brace yourself, here is how Mr. Markman replied, “There are some misconceptions because no one has been here long enough to remember this other than Wayne Wedin, Rex Gaede and me.
Basically, in ’78, this was put on the ballot for two reasons. One, Brea had two redevelopment project areas and whatever property tax that was there was going to be allocated elsewhere and they were facing Prop 13 which most people thought would pass which was going to freeze property taxes in place so there were a number of problems facing the city at the time funding redevelopment where the source of income, which was going to grow, got frozen at the 1% tax rate and that took away projected tax allocation money.
Also, and The City Council knew that the Paramedic (Tax), which they proposed and was passed by 80%, was sized as to what the rate was as a special tax so they would generate enough revenues to fund the paramedics and account for the fact that money generated in the redevelopment project areas was not going to be there for that purpose unless and until essentially redevelopment went away several years later which is exactly what happened.”
Boom! There it is. That sounds like a confession if I ever heard one! And, if any interested prosecutor is reading this, the case for proving intent seems like a slam dunk as well.
“So, if anyone doesn’t believe that discussions occurred, that they had those numbers figured out… they issued bonds, numerous bonds, for the Redevelopment Agency that clearly state and show you the allocation of what would have been a Paramedic Tax if its in the project area going to redevelopment.
So nobody was ever fooled or surprised by that and they sized it because Brea wanted paramedics in 1978. And, they wanted to fund the paramedic program so they had to set a tax rate that accounted for redevelopment allocation.”
Okay, having already made his confession, what does this tell us? Only that the size of the gang, those poor unwitting co-conspirators, was bigger than we thought. Seems the gang included virtually every member of City Council holding office since 1977.
Again… Mr. Markman continues, “And that’s what’s happened ever since, except for two things that happened. Once we reached the cap on how much redevelopment money could be allocated… money over that cap that’s generated by that Paramedic Tax goes to the paramedics and the redevelopment allocations are now way reduced because all they’re doing is paying debt on our Last and Final ROPS which essentially, for the most part, are bond issuances that are being paid off over the years and, as they are paid off, that money would be reallocated to paramedics remembering, however, that there is a lot more people here than the 17 or 18 thousand that were here in 1978 when the Paramedic Tax was enacted.
That Council knew that that number would grow, the city would grow, that was the whole idea of redevelopment and when that was all over the allocation would go back to the Paramedic Tax so none of this was stumbled into or a surprise to anybody.”
If the City Manager’s responses were a word salad, this is a banquet of b*llsh*t. If anyone can extract a single cogent fact or convincing statement within this medley of malarkey please share it in the comments section.
Well, let’s wrap this up.
You can view the meeting’s streaming video on the city website HERE to verify that my transcriptions are faithful.
The specious responses from the City Manager and Attorney underscore the callow and indefensible decisions made by them and their predecessors. They have raised the exclusion of the public to a level of pure artistry.
Issues over the last couple of years have escalated from petty small town personality politics to clearly criminal enterprises that wasted millions of taxpayer dollars to either line someone’s pockets, inflate someone’s pension or fulfill some small mind’s notion of what Brea should be.