BHGC, An Unmitigated Disaster Waiting To Happen.

Today, Brea Matters again addresses the recent vote by Council to assume title of the BHGC (Brea Hills Golf Course).

Red DiceWhen I launched Brea Matters in October 2011, a key catalyst was former City Manager Tim O’Donnell’s favorite definition of leadership, “Leadership is disappointing your constituents in increments they can absorb.”

Long ago ingrained as the management mantra of Brea’s Council and Staff, it has proven to be sadly accurate in it’s premise.

How Much Have You Absorbed?

In ten years, I’ve lost track but in recent times we’ve “absorbed” the disappointments of the 1976 Paramedic’s Tax, the 1991 RDA bond refinancing that produced a $50 million unaudited slush fund, the loss of the Gateway Center – a prime city asset, loss of the Yorba Linda Police contract, reorganization of the Brea Fire Department.

Plus the mismanagement of Landscape, Lighting & Maintenance Districts (LL&MD) and Community Facilities Districts (CFD), Tiered Water Rates, and these self explanatory fiascos: Koreagate, Madrona, Rock Garden, unfunded pension debt and Brea Envisions

Council and staff count on our short memories and propensity to forgive. Next Tuesday they will once again rely upon their old mantra to get them off the hook one more time.

Misdirection, Misinformation and Misconceptions.

The first thing you’ll be fed is a litany of useless historical “facts” designed to lull you into a dull sense of inattention. Detailed descriptions of the “parties” involved, clarification of the original intent of the title exchange and justification of redesigning the course into substandard quality.

They’ll try to justify the ridiculous $80/yard excavation fee as a basis to project future mitigation fees. Everyone put your calculators away. We’re missing one important factor in the equation, without which no accurate projection is possible. They have no clue exactly what the remaining unmitigated condition of the BHGC is, how many acres… how many yards of “dirty dirt”… remain after the admitted partial mitigation done to save Chevron $13 million in additional costs.

The BHGC: Permitted Uses, Prohibited Uses.

We’re told, by the City Attorney, that permitted uses include a golf course or other outdoor recreational use, and the addition of a community or banquet facility. Prohibited uses include residential development, hospitals, clinics and medical offices.

So, does “permitted” mean legal and “prohibited” mean illegal? These terms have been tossed about as equivalents and they’re anything but!

City Attorney Boga stated that, with certain permissions, the city could do whatever they wished with the property. Permissions from OC Healthcare Agency, US EPA, Birch/Kraemer LLC and Union Oil.

He failed to mention that, assuming getting all of those permissions was even remotely possible, that Chevron would be absolved of their requirement to maintain the parking lot and the city would assume the responsibility.

Plus, changing the BHGC to a non-park use requires voter approval of Brea residents. Really?

When Is Our Voice, Our Vote Obligatory?

BHGCDid we get to vote on whether we were willing to trade the $8 million In Lieu Fees for the eventual title to a semi-toxic stripped down golf course worth, at best $5 million? No.

Did we ever get to vote on whether we believed the city, in addition to routine municipal responsibilities, should be free to commercially compete with all manner of local businesses? No.

Did we get to review the detailed legal documents and agreements required to effect this transfer of title and vote whether we supported the transfer with all of its complicated and fiscally threatening limitations? No.

One member of Council, for reasons I still find incomprehensible, was recused and the four remaining members of Council voted unanimously to take ownership of this white elephant.

Have You Absorbed Enough Yet?

I have! And if response to the prior blog and commentary on the Brea Buzz is any indication, many of you have reached total saturation as well.

You’ve got about two days to make your thoughts and concerns known to Council before they launch into their dog and pony show to justify the unsupportable vote they cast two weeks ago.

Juked out of simply putting their propaganda on the city website, thereby giving it the full weight and credibility of the interwebs, they’re stuck making it look like a formal report Tuesday evening.

Luckily Matters From The Audience follows this sugarcoated attempt to justify after the fact… so those of you with the chutspa are welcome to step up to the podium and give these folks a piece of your mind.

Paramedic Tax Snowballs Into An Avalanche Of Deceit.

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.

paramedic taxAt 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.

paramedic tax“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.

paramedic taxCouncilman 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.

paramedic taxCouncil 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.

paramedic tax“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.

Whatcha gonna do?

 

Paramedic Tax Is A Hoax.

Your property tax dollars, approved by ballot initiative 40 years ago “for the specific purpose of establishing and maintaining a mobile intensive care program known as Paramedics within the area of the City of Brea” have been diverted through the Redevelopment Agency/Successor Agency since 1978.

Every Council resolution creating or renewing the Paramedic Program special property tax, for 40 years, incorporated exactly that language. Not a single member of the Brea City Council (save possibly one) had a clue regarding the magnitude of their blunder – the product of a purposeful deception by members of senior staff.

Sounds a hell of a lot like a slush fund to me.

Based upon documents gathered through the California Public Records Act (CPRA), from both the City of Brea and the Orange County Auditor-Controller’s office, it is fair to assume that every City Manager and Finance Director, at minimum, was aware of the fiscal hoax perpetrated upon Council and an unsuspecting public for 40 years.

How much are we talking about?

Over $50 million of your tax dollars. Supposedly, thanks to some obscure directive in State law, these funds have been funneled through the RDA since 1978. Roughly 40% was spent on administrative costs, debt retirement and other expenses – none of which had diddly to do with a paramedic service.

When the state dissolved Redevelopment Agencies in 2011, things didn’t get much better. In fact, they got worse. Originally we did get our hands on 100% of the tax revenues collected.

In 2011 that was cut almost in half – 55% was paid to the Successor Agency letting them do whatever they wished with it. The remaining 45% went into the Brea Redevelopment Trust where the county followed state directions to pay off residual debts of the RDA.

How much longer will we be paying off RDA debt?

Total debt for the Successor Agency is $196 million. A payment plan has been submitted to the state’s Department of Finance, upon which we will be making payments until 2036. That’s 60 years to retire the debts created by the Redevelopment Agency.

The issue in a nut shell.

The people of Brea clearly expressed what we were willing to be taxed for. There was a legitimate attempt in the beginning, by well intentioned members of Council, to fulfill the people’s wishes.

Underneath it all, the covert diversion of tax revenue has continued, virtually unabated, for 40 years.

The good news.

Facts by the ton, discoveries that would light up the eye of Julian Assange, have been dug out of the archives and studied by a “team” including myself, 2 members of Council and 3 long time community leaders.

The details of decades of staff reports, resolutions, budgets, county tax records are being poured over and the revelations emerging out of the data paint a clear picture of the atrocious irresponsibility that ran amok… without restraint, for 40 years.

The gorilla is being drug into the light and the right people, the people we elected to oversee city business, are back in charge.

Undoubtedly more will be learned in the near future. We may be called back into the voting booth to help rescind a failed tax and approve a remedy that will provide us with the sort of paramedic services we thought we were getting 40 years ago.

Stay Tuned.

We’re a long way from knowing the complete truth and from digging ourselves out of a hole 40 years in the making.

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