RDA 2.0 – A Really Bad Idea!

On Friday morning, August 2nd, the Development Committee met with only one real item on their agenda. “Enhanced Infrastructure Financing Districts (EFIDs) with presentation by Staff and Larry Kosmont, Kosmont Companies. The presentation from Kosmont, centered around “How do you capture vitality and quality of life in a digital economy?” However a good dose of “state mandates fear” formed the foundation upon which the presentation was built.

Let’s get to the heart of the matter.

There appears to be a growing interest in rejuvenating an old idea, redevelopment. This new… call it RDA 2.0… is a rebirth of tax increment financing for local/regional projects.

Managed by Brea’s Public Financing Authority, new redevelopment districts would be created, property taxes frozen and new “redevelopment” bonds issued to finance some sort of infrastructure projects.

No public vote is required to create these new “enhanced infrastructure financing” districts!

The mantra “no new taxes” is repeated over and over as if that will lull us into a false sense of trust and comfort.

Look, when the property values are reassessed and the taxes unfrozen, the properties will be paying at a much higher rate and the difference will be used to retire the bond debt.

What about this suggests no new taxes?

So, where are these new EIFDs?

The report listed: Central Park Village, Brea Place (Hines), Aera Energy Brea 265, 2830 East Orbiter (adjacent property owned by firm of Planning Commissioner James McGrade), Embassy Retail Court, Brea Mall, Brea Plaza, Former Improv, Gaslight Square, Regal Theatres, Mercury Lane Residential, Downtown hotel, Brea Community Center, Brea Library, and Suzuki Motor of America.

To me, 90% of these properties are either doing quite well as is or they’re in various stages of development… not even yet completed. And the United States Bankruptcy Court confirmed American Suzuki’s plan of liquidation (Chapter 11) on February 28, 2013.

The first city/county EIFD tax increment partnership is the Placentia Old Town district. Over 300 acres with taxes frozen at $365 million and anticipated to be unfrozen at $460 million. For what?

Kosmont lists the following: $22M net fiscal impact to City; $15M to County; 1,600+ housing units; 3,900+ construction jobs; $800M+ construction period economic output; 1,150+ permanent jobs; $164M+ in annual ongoing economic output.

Prove it.

Here is what Kosmont proposes to do in Brea: Kosmont to evaluate: Project and land use review; EIFD boundary alternatives; infrastructure improvements required; Tax increment funding capacity / complementary sources; Orange County cooperation; Implementation strategy and roadmap.

Kosmont proposed timing: Feasibility evaluation – 2 to 3 months; District formation activities – 6 to 12 months.

Stop the madness!

Not a whisper about seeking public review or approval.

In December 2011, the California Supreme Court upheld the complete elimination of redevelopment agencies and TIF along with it. The legal wrangling that followed is complicated and not worth going into detail here.

Suffice it to say Redevelopment was terminated for good reasons. Why, just 8 years later, has it suddenly become a good idea again?

Nothing in life is free.

They try and seduce us with parks and community projects. But where’s the money come from? From schools and our pockets!

From the mid-seventies through 2011 Brea built a boatload of RDA projects. Some were on private land and made reasonable use of the tax increment. Many, like the Civic Center, Community Center, Senior Center, Sports Park and Rails-to-Trails were on public land for which no tax increment existed!

District borders were repeatedly expanded, bonds were repeatedly refinanced and cash was created at every opportunity. Hell, they even tricked us into passing the Paramedic’s Tax, almost half of which never paid for a single thing related to emergency medical services.

No one in city hall can give you an accurate price for one single project. The web of financing hijinks was so complicated they’ve lost all comprehension of what they pulled off for over 40 years. Millions upon millions.

You know what really hurts? We still owe $193,871,104 million dollars which we’ll be paying off all the way through June 2036.

Revenue is down, expenses are ever on the increase, we’re hovering on the edge of unbalanced budgets for several years to come.

Now is not the time to start some fiscal boondoggle, proven to be a failure years ago. Especially if it does little more than provide job security to a handful of city planners having a tough time justifying their jobs anymore.

Tax increment financing (TIF) is no way to defray the cost of urban revitalization… assuming that’s what we want to do in the first place.

Outsider Threatens Term Limits Initiative.

With term limits on tomorrow’s Council agenda, folks are joining the discussion from all sides. Today Council received the following correspondence from a Jon Fleischman, posing as the President of California Term Limits, Inc.

Note: The California Secretary of State has no corporation on record known as California Term Limit’s, Inc. and the PAC referred to by Mr. Fleischman (ID #1351314) was terminated on May 5, 2015 following an FPPC investigation into their receiving a $200,000 donation from out of state.

Dear Mayor Marick and Councilmembers:

It has come to our attention that the Brea City Council will be discussing the issue of term limits for your council members at your meeting this coming Tuesday evening. On behalf of California Term Limits, our state’s official advocacy organization for term limits, I would like to strongly urge you to place solid a measure before voters this November to amend your city charter to include meaningful term limits for council members.

We at California Term Limits believe that government at every level benefits from term limits for many different reasons:

Career politicians aren’t good for our democratic republic.

When people serve in office for too long, they lose the perspective of being average citizens. We find that after two four-year terms council members tend to become isolated, seeking a greater amount of input from city staff, insiders, and institutional donors. We find that long-term politicians are less willing to make hard decisions if it will upset the status quo.

Without term limits, incumbents are hard to dislodge.

It’s the case that because of their ability to raise funds, and their name identification, serving on a city council can be a lifetime pursuit. Again we believe career politicians are a net detriment to governments at every level.

More people, not fewer, should be able to serve as leaders in local government.

Simply put, with term limits, we ensure that a broader cross-section of local citizens have an opportunity to serve.

As an organization that focuses on term limits, we have found that the best formula for applying term limits at the city council level would be to allow any individual to serve up to two four-year terms in their lifetime.

As you probably know, most Orange County cities already have term limits, and Brea most certainly should. If you talk in your community you will find the idea very popular. Our recent polling shows local term limits tend to enjoy the support of over two-thirds of voters.

If as a council you choose to move forward, we would be happy to work with you to make the case to the voters for why this reform is a good one.

If you choose to reject placing this matter before the voters, then we would look forward to partnering with some of you, or with local activist in your community to gather signatures to place this issue before Brea voters. We were recently asked by citizens in West Hollywood for assistance — and our associated political action committee happily spent many thousands of dollars assisting with professional signature gatherers to help get their measure qualified, over the objections of their council. Much to their surprise, but not ours, the voters passed them there!

The California Term Limits PAC has spent hundreds of thousands of dollars around California the last few years advancing the cause of term limits. We look forward to working on this issue in Brea.

Please give your citizens there the ability to decide if they would like term limits for the Brea City Council. Of course I am available to discuss this issue with any of you.

Sincerely,

Jon Fleischman

term limits

A reasonable course of action.

Tomorrow night, following opening discussion, Council should instruct staff to put a public hearing on term limits on their next agenda. At the conclusion of the public hearing Council should instruct staff to again put term limits on the next agenda, to prepare a staff report summarizing Council’s consensus on the public input including a draft resolution to place (or not place) term limits on the November 2016 ballot.

An unreasonable response.

To the handful of folks whining that this is nothing more than political adversaries waging war on each other, getting even for past transgressions, I offer this, “If we suppose them sincere, we must pity their ignorance; if insincere, we must abhor the spirit of deception which it betrays.” Alexander Hamilton.

Term limits do not rob voters of their right to choose, they merely establish a framework within which choices are made.

 

Brea First — of the people, for the people and by the people.

My prime objective, from day one, has been to encourage my friends and neighbors to pay more attention to what goes on at the Civic Center and to make the best use of their vote as possible. I’m pleased to share with you the launch of a new grassroots group, Brea First. Their Director, Chris Gaarder has been kind enough to provide this background.

Brea FirstIntroducing Brea First

By Chris Gaarder, Director

Last Thursday, January 28, Brea First hosted our first public meeting, on “Developing Brea: From Oil to Commercial Success.” We believe it is important to look to the city’s past if we hope to build a better future.

Brea FirstOur speakers, former Mayor Carrey Nelson and Olinda Oil Museum docent Jack Smith, shared valuable insights on how Brea became the city it is today. Brea FirstWe heard fascinating anecdotes from the early oil days to the more recent redevelopment efforts that created much of the city we see today.

That was then, this is now.

While it is tempting to say the past is the past, decisions made 10 or 100 years ago have effects that ripple into the Brea of today and the Brea of our children’s future. Brea First will continue to explore Brea’s history in our upcoming meetings, and we hope to put a special focus on the city’s future.

Our plan is to host a monthly public event providing Breans with information and analyses of our past, present and future, from local and outside experts.

All too often, critical issues of local government do not get the attention they deserve. In the coming months and years, Brea First will work at the grassroots level, putting the welfare of the people of Brea first, by shedding light on the matters having the greatest effect upon our daily lives.

By promoting a better understanding of how Brea’s government works today, the people of Brea can help create a better tomorrow.

Counting our blessings.

Brea contributes a tremendous amount of good to those living in the city and beyond, including strong schools, a vibrant business scene, a high quality of life, and strong bonds among the diverse communities within the city.

There remains, however, longstanding issues poorly addressed and still unresolved. Breans voice continuing concerns over transparency, accountability and the proper role of government.

Our most serious problem: unfunded pension liabilities.

The unfunded public pension liabilities owed to the City of Brea’s past and current employees are particularly troubling. According to Pension Tracker, Brea has the second worst unfunded public pension liability per household ($20,113 in 2013) of any city in Orange County.

That puts Brea among the worst five percent of cities for unfunded pension liabilities per household in all of California. The reality is, left unresolved, Brea could face the crippling of vital services or even bankruptcy. Residents, including city workers and retirees, could be hurt by these looming liabilities.

Bad news, good news.

As bad as the unfunded liability may be, there are a variety of other serious issues facing the city. The good news is, as Brea First brings an array of issues to the fore, we can find workable solutions to the challenges facing Brea.

MTG1_overview

Become part of Brea’s Solution.

Plan to hear our February meeting announced in the coming week. Stay connected by visiting our Facebook Page and Website where you can sign up for our email list.

Brea First is a bright light on the horizon.

Brea’s politics has often been contentious in recent years. We all know it. While important change swept through city hall in 2014, serious issues remain.

I have great expectations for Brea First, confidence in the leadership and am hopeful to see it’s ranks grow at an exponential rate. I hope you feel the same encouragement I feel and make an effort to get involved.