By: Robjamco | Original Article at patch.com
Bergonomics 101
Good morning class this is a story of Municipal M. You may ask just what does the “M” stand for. This is a very good question and I believe it stands for many things. Such as “malfeasance, misunderstanding, miscalculated, misrepresented, misspoken, misappropriated, misinformed, along with many more, however the most important that hasnt been mentioned is MISTAKENLY.
Mistakenly covers all the actions in the past by former and sitting Council members that either
A) by a tall glass ingested every 2 weeks of “wool over the eyes” potion leading to semi-permanent brain dysfunction and a sad case of Staff worship that resulted in a total lack of oversight by Council
or
B) with no serving of magic potion to blame, a complete lack of understanding in the ways and means of Civil servants abuse of the limited powers available to them. Specifically an absolute incomprehension of who steers this ship and why.
For brevity and not to bore you with the details of text, I will be summarizing and parts and portions of a post here on the Patch by others and making specific comments and rebuttals to former Councimen Berg’s comment and statements.
The complete Post and replies can be seen at this link:
http://patch.com/california/banning-beaumont/finance-director-aylward-lied-0
Lets start:
RogerNBerg
“….. The RDA never took money away from the school districts. In fact Beaumont gave them and the special districts more money through increased property valuation.”
Me (and references)
” Tax increment financing allowed redevelopment agencies to capture increased property tax revenue in their project areas to fund their activities. Once a project area was designated and a redevelopment plan was adopted, a base year was set for property tax revenues. All of the other taxing entities in the project area (e.g., school districts, county governments, flood control districts, library districts, etc.) had their property tax revenue frozen at this base year level. Any increased tax revenue above the base year level went to the redevelopment agency until the redevelopment project ended.
To illustrate this point, let’s say the total property tax revenue in a project area was $100,000 during the base year. If that revenue grows to $110,000 in the next year, then the redevelopment agency would be entitled to $10,000, or the tax increment. The other taxing agencies in the project area would receive the same proportion of the initial $100,000 that they received in the previous year. Over time, this meant that property tax revenue going to many local jurisdictions stayed frozen while the amount of tax increment collected by RDAs grew. The redevelopment agencies were entitled to receive the additional revenue for the life of the redevelopment project – which typically lasted for decades.
.. ABx1 26 attempts to honor those debt obligations and other legally enforceable contracts. But the bill stopped RDAs from pursuing any new activities that might continue to divert tax increment dollars away from other local taxing entities.
…While tax increment financing was a boon to redevelopment agencies, it had the potential to limit the amount of property tax revenues distributed to other taxing agencies in RDA project areas.” (from link below)
http://redevelopmentdissolution.lacounty.gov/wps/portal/rdd/about
That my friends is a reference to schools and other local taxing Agencies being deprived.
RogerNBerg
” How in the world do you think all the improvemetns were done at Noble Creek Sports Park? Increased tax assesmsnt due to the new development. The city is owed over 22 million dollars from the RDA for money theat it lended the RDA so the RDA could fund tax producing development in the RDA project area, which included most of the old Beaumont and not any of the newly annexed areas.”
Me
I dont even know where to start on this statement. By definition the tax increment is defined above. If the tax increment INCREASE received due to an increased valuation due to projects undertaken by the City resulting in ever growing tax burdens by surrounding land owners, benefiting the RDA, and depriving other taxing Agencies of increased valuation, I would submit the following question. Was this increase in revenue now available to the RDA, because of Administrative and Joint Powers, at landowners expense in increased taxation a violation of Prop 13 and 218 which REQUIRES voter approval for increased taxation? Of course it is. the proof is in the pudding. The Legislature could no longer afford to fund the lost tax increments by schools. They were legally bound at the State level all funding losses that went into the pockets of the RDA’s.
“….Before 1994, RDAs were allowed to negotiate with local jurisdictions to determine the amount of tax increment that local taxing agencies would receive. These agreements “sometimes were negotiated as part of a settlement of a dispute over the legality of a proposed project area.” In some cases, RDAs agreed to negotiate up to “100 percent pass-through payments to the county and special districts, meaning that these agencies received their entire share of the property tax in pass-through payments.” Most school districts had less incentive to negotiate pass-through agreements since, under state law, “the state reimbursed them for any lost property tax revenue.” However, the reimbursement costs paid by the state “grew rapidly to hundreds of millions of dollars per year.”
http://redevelopmentdissolution.lacounty.gov/wps/portal/rdd/about
In closing Mr Berg I challenge you to explain the how, where and why the City magically came up with $21 million in excess funds that it was willing to lend to an RDA that had a tax increment so pitiful that the repayment of this “loan” could be as long as 60 years and in the best of circumstance payable over 20 years? Of course that doesnt even take into account the 10 year payment plan the City has to DOF that may eventually allow them to seek repayment. The City never had $21 million in excess unrestricted or set aside for specific future uses funds available to use as RDA funding. To make matters MORE MISSAPPROPRIATE and MORE MINDBLOWING your actions as a Councilman led to an expectation of repayment with interest derived at 12%. Im not an Accountant and I dont pretend to be one. Im going to give you the formula you and your colleagues bet the farm on. Your $22 million (please explain where that money came from to all our homeowners in the CFD Areas) MULTIPLIED by the Interest Rate Annually @ 12% and when all this makes sense to you….then you can explain it to us.
It is beyond belief that former Council Members (and some current) continue to believe in the “facts” that fountained from Staff and the how’s and why’s and the “at your direction Council..” excuses offered.
Mr Berg we have philosophical differences and completely different understandings of how Municipal Staff and some Council’s justify and seek ever increasing amounts of taxpayer dollars without approval and oversight. That being said I dont believe your intentions are malicious nor result in your personal enrichment. I would hope that a view point from the other side of the fence might cast new light on an old argument. It would be a MEANINGFUL start to a new understanding and fresh start to the problems we face.
There is no bogeyman with our $21 million dollars in his clutched hand. Staff has admitted and stated there is no good reason to pay the $3 odd million sooner than later in order to receive a Finding of Completion that ALLOWS to ASK for possible $21 million repayment..over 20-60 years.