Seniors Under Attack by Rialto Mayor and Council

 

A few weeks ago the City Council was tasked with a job. They were asked to look at Rialto’s financial future and take a series of actions to begin to lead us from the eventual cliff. What they did was very different.

The city of Rialto has had a Utility Tax since 2003 according to staff reports. Many cities have utility taxes but Rialto’s is unique since it contains a sunset. Every 5 years our Utility Tax comes to and end forcing the people to vote to reinstate the tax normally for another 5 years. As you will see from Interm City Manager Rob Steel’s presentation.

Rob Steel laid out a very comprehensive breakdown of the history and future of Rialto’s need for this tax. Next was the BAC (Budget Advisory Committee) with their recommendation to City Council. The BAC with much debate and study came to the conclusion that keeping things the way they are is the best bet for Rialto and is the least risky of the options. Rialto City Council barked that the BAC was not formed to mull over the UUT (Utility Users Tax) but to look for alternatives to new monies in Rialto. The problem is without the UUT there is no more of a Rialto. The UUT represents 18% percent of our general fund budget. Our general fund is already barley functioning and under $130 Million in unfunded burdens over the next 10 years and we can’t afford to loose 18% of our budget. Also City Council ASKED the BAC for their thoughts on the UUT and where things should go. Really City Council was simply looking for a rubber stamp to attack seniors and play Russian Roulette with Rialto’s Future.

After this the Mayors true plans and intentions were brought to light. She did all she could to poison the Budget Advisory Committee and bend them to her will. She found out that not everyone believed the same thing but that the recommendation was built off of a majority vote of the residents on the committee not any of the employees representing the various bargaining units. What Mayor Robertson is about to show you is she has little concern for Rialto’s ability to have sustainable growth in a safe city.

Given the chance these people would find any legal way to tip the scales in their favor to win an election for themselves but when it comes to obtaining a ballot measure that will pass and give Rialto the chance at a sustainable future they ignore every poll and conventional wisdom and make the most illiterate decision.

Now Ed Scott wants you to believe that the big bad unions are inside the Budget Advisory Committee meetings strong arming the residents on the Committee. Nothing could be farther from the truth the Union representatives have been helpful and respectful they are not even voting on the various recommendations the Committee is send out to Council (recommendations they choose to ignore). Ed Scott asks the residents to take the Committee by the horns well were doing just that but were taking City Council down to the Corruption starts with the failed leadership of the city. Does anyone believe the way you manage a horrible upcoming situation by spending your savings and saving less? Councilman Ed Scott does!

Ed Scott brings up the Monrovia Example, this has not been brought up but I asked Iterm City Administrator Robb Steel about it here is what he told us:

“Monrovia adopted a multi-prong strategy to pay down its unfunded liabilities for pensions.  The key component of it was to issue pension obligation bonds for their unfunded liability ($111 million).  I have attached the staff report that describes their program, which includes modest employee concessions and other revenue enhancements.  I have also attached the rating agency report on the proposed bond issuance to provide a sense of Monrovia’s overall financial condition.  The basic strategy with POB’s is to borrow funds at say 4% and invest with PERS (or a separately established trust) that earns say 7%.  If the raised monies are used to pay down the unfunded liability with PERS (for example), the City’s annual payments to PERS will be re-amortized and reduced (similar to using one time money to pay down your mortgage, then refinancing the balance).  The freed up cashflow can then be used to sustain services, or pay down the debt even faster.  The potential savings are significant (on $100 million as example, a 3% spread represents $3 million per year in interest savings in year 1).

This can be a good strategy, but it is not without risks.  The City establishes general fund secured debt that must be paid as a priority above all other expenditures, which limits financial flexibility and may force cuts in essential services during a financial disruption.  The bond investors may condition the financing on compliance with certain financial standards (minimum reserves, balanced budgets, etc.) that may seem reasonable but which may limit choices.  It can be a good move; it just warrants some discussion of the risks.  Our neighbor to the east defaulted on its payments for POB’s and spiraled into bankruptcy largely to shed that obligation.  

Jumping in to the hot topic of the day, in order to issue POB’s the City must demonstrate balanced general fund budgets and stable financial futures.  The S & P Report attached describes Monrovia’s current financial posture as quite stable and strong, with but a few reservations.  We would not receive a similar finding, in large part because our revenue stream is interruptible.  It would be very difficult (I think impossible) to borrow monies at reasonable rates when 20% of your revenue stream may be cut off every 5 years.  A permanent revenue stream (of some sort, does not necessarily have to be a utility tax) would be necessary to address this issue and allow the general fund to issue debt with a strong repayment forecast.  Alternatively, the City would need to compress expenditures by 20% to balance its budget and that we know would require dramatic service reductions.  At present, the City General Fund would not in my opinion receive an investment grade credit rating unless we collateralized the debt with something very secure (substantial cash reserve).”

Anyone interested in following in San Bernardino’s footsteps?

Joe Baca Jr. is not a risky guy when it comes to politics. He is a moderate like his father and isn’t known for taking on causes unless he knows for a fact he can shield himself from the consequences. For example when the city was in the process of selling of our water for 30 years he was the lone no vote. This did nothing for the people and Joe Baca Jr was well protected since he knew that the rest of the council was in lock step to sell away Rialto’s Water future. So in this matter why would he risk going after seniors and putting Rialto into a very tough spot financially? He doesn’t have to agree with his fellow council members on anything other than the fact that there is a need for a financial emergency. There seems to be more to this that what we see on the surface and there are a lot of behind the scenes conversations taking place to get everyone on the same page on such a horrible idea.

Not only is Rafael way out of his league here but he missed a golden opportunity to show he is the man of the Hispanic people. He has no idea what he is doing and his ignorance isn’t something that you can say comes from a good place because he is trying to make a difference. To add insult to injury he missed a golden opportunity to plea for better bilingual outreach. He left that up to Mayor Robertson and the Vice Chair of the BAC.

Councilman Carrizales is sitting in a seat where a man once sat who stood up for Rialto better than any other elected official and he had no use of his legs. Everyone is waiting for Councilman Carrizales to work to represent the people on the dias, nothing personal he is a great man and a devoted husband and father but Rialto needs leaders that lead in tough times like these not read off a pre-written script. When people act so far outside their character it leads one to believe what is really going on here.

Joe Baca Jr. went into what they can do in the future if the need for the Utility Tax ever changes but these are just words that will never happen to distract people from what is really going on.

Finally Dennis Barton reminds the Budget Advisory Committee that the council only cares about a recommendation that is unanimous meaning if certain members have different ideas of feeling those are to be shut up and closed down. Then the Mayor pitches a fit because she wants to make sure she is around to control this process and make sure her will is done. Also see Rafael Trujillo’s ignorance of how elections are run because he doesn’t even know that ballot information is in English and Spanish.

 

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