By Bill Baker, J.D.
Editor and Publisher, The San Bruno Beacon
It is pretty clear at this point that the good people of San Bruno have lost total control of their government and it is now controlled by some very nasty, self-serving characters.
Sad, pathetic, uncaring. A few descriptive words one might ascribe to the San Bruno City Council and their proxies; whose reckless, self serving, mean spirited decisions have been and are leading to the financial destruction of the City of San Bruno, its residents, and businesses. There is no doubt left in my mind that this financial wrecking crew needs to go.
The May 10th San Bruno City Council Meeting showcased the utter contempt that this Council has for San Bruno's most vulnerable residents. I guess it is easy for such people to hammer senior citizens, sick/disabled people, and economically disadvantaged people. Perhaps, when you lack character, common decency, and integrity; picking on the weak and vulnerable is second nature.
At their May 12th Council Meeting, this Council misled San Bruno's residents, while paying lip service to the pleas and heart wrenching stories told by some of San Bruno's most economically vulnerable residents.
At the Council Meeting we heard from: San Bruno senior citizens who stated that they don't know if they have enough money to live on until they die; San Bruno residents who have to choose between buying the medication they need to survive or stay healthy and paying their utility bills; San Bruno residents who are raising families and finding it impossible to make ends meet because of skyrocketing utility bills. These people, and other like them, are systematically being financially destroyed by this misanthropic Council and their highly paid government proxies who are grinding San Bruno's residents and businesses into the ground.
In my opinion, it is as if this Council and their functionaries are using a system of financial eugenics to purge San Bruno of its poor and moderate income residents, a large percentage of which are members of one or more of our City's minority communities. This arrogant, uncaring Council paid lip service to the pleas of the San Bruno residents who showed up to testify about the pain and suffering higher utility rates would cause for them and their families.
The pleas were ultimately ignored by the Council and they punished San Bruno's residents and businesses with horrific water and wastewater increases that will ultimately destroy the lives of many of these people and others in San Bruno. As I see it, this Council and their City Government functionaries, living off of rich taxpayer supplied salary, benefit and perk packages, don't give a dam about anybody except themselves and their cronies. This group that has taken control of our City government is the modern day version of the 'let them eat cake' crowd.
Let's look at the distortions of truth advanced by this Council and their proxies:
1). At the May 12th Council Meeting, San Bruno Administrative Services Director Jim O'Leary contended that the $12 million plus taxpayer dollars squandered by this Council on their failing Redevelopment scheme had nothing to do with the abusive water/wastewater rate increases this Council has been punishing San Burno's residents with almost every year during the past 10 years.
Here is what San Bruno Administrative Services Director O'Leary had to say at the May 10th Council Meeting about the approximately $3.9 million portion of Redevelopment debt borrowed directly from the City of San Bruno's Equipment Reserve Fund by the troubled San Bruno Redevelopment Agency:
San Bruno Mayor Franzella: "The question talked about the 5 million dollars that was lent to the Redevelopment Agency ehhh I don't know that that's still an outstanding balance but I know Council had spoken about that debt being paid off soon but perhaps you could address that
San Bruno Administrative Services Director Jim O'Leary: "Any Redevelopment Agency is required to have debt in order to be eligible to receive tax increment revenue uh in this particular instance, The Redevelopment Agency for San Bruno is relatively new uh the startup costs in the early years of the Redevelopment Agency, in fact the City lent the Redevelopment Agency, I think the total now is 3 point nine million dollars uh the uh for for the past number of year uh at the beginning again the Agency the need of this money for operations and didn't have the ability to pay it back uh the Agency has now reached the point uh where in fact uh the uh this debt, interest is being paid on this debt originally that was not the case but interest is being paid on the debt the uh the borrowing is actually from the City's Equipment Reserve and uh that borrowing and the Redevelopment Operations has no impact on the rates or on the water or wastewater enterprise accounts."
O'Leary is wrong. Here's why:
A). First, O'Leary would have us believe that the San Bruno Redevelopment Agency is "relatively young". Let's take a look at O'Leary's statement. The San Bruno Redevelopment Agency Redevelopment Plan was adopted on July 6, 1999. Project activities can take place over 30 years. O'Leary's "relatively young" Redevelopment Agency is 10 years old. That's 1/3 of the time that project activities can take place. O'Leary's serpentine statement would have you believe that the Redevelopment Agency is a new entity with little or no track record. No, the San Bruno Redevelopement Agency is a 10 year old troubled agency that is draining millions of San Bruno resident's taxpayer dollars out of the City's Equipment Reserve fund to support the massive debt load and real estate schemes concocted by this Council.
B). O'Leary says that the San Bruno [Redevelopment] Agency, "has now reached the point uh where in fact uh the uh this debt, interest is being paid on this debt originally that was not the case but interest is being paid on the debt". O'Leary isn't telling the whole story. I wonder if O'Leary has ever heard of a CPA firm in San Jose called Mayer Hoffman McCann P.C.? They are the CPA firm that did the last audit on the Redevelopment Agency. Here's what Mayer Hoffman McCann wrote in their audit report about the San Bruno Redevelopment Agency:
"At June 30, 2008 and 2007, the Agency owed the City $3,300,811 and $3,427,733 for advances made by the City. As revenue from tax increment continues to increase, the Agency will be able to reduce its reliance on advances from other City funds. The City has not determined a repayment schedule for the debt owed by the Agency."
So, now, in this Election Year, O'Leary is telling us that the Redevelopment Agency found a pot of gold and now has the money to repay the "interest" on this $12 million + debt that has been run up by the Redevelopment Agency? Great, let's see the proof. However, even assuming that we are not being jerked around on the interest repayment issue, the fact remains that there is still no plan to repay the principal on the Redevelopment debt in a worsening economy.
No matter what type of "happy face" this Council and Administrative Services Director O'Leary want to paint on this bleak picture, the fact of the matter is that this Redvelopement Agency has run up a debt of $12,900,000 +. This Redevelopment scheme is a ticking financial time bomb. It is not unlike the subprime mortgage disaster that only worked if property values continued to increase. And, not unlike the subprime disaster, somebody is making a lot of money and the taxpayers (in this case San Bruno's taxpayers) are going to end up holding the proverbial bag.
The absurdity of this money losing redevelopment scheme is brought into focus on page 7 of the auditor's report:
"The incremental assessed property-tax value of the redevelopment area for fiscal year 2007-08 was $635.5 million and for fiscal year 2006-07 was $530.9 million. The Agency is anticipating a 10% increase in the incremental assessed property-tax value for the 2008-09 fiscal year that will be sufficient to meet current debt service requirements and to continue promotion of additional development in the redevelopment area."
Property values have plummeted between the time the Redevelopment audit report was published and today. The 10% increase in assessed property value they were projecting is probably not even close to being a reality. Even assuming the best case scenario of a 10% increase in incremental assessed property-tax value you are still only covering the debt service and not paying the principal. It would now appear that the Redevelopment Agency is not even covering the debt service on the money they borrowed.
The $3,300,000+ that the Redevelopment Agency owes the City of San Bruno could be earning interest at a rate of about 3%. Therefore, on top of all the other problems inherent in this redevelopment scheme, the City of San Bruno is losing about $99,000 a year in interest on this taxpayer money this Council is gambling on this redevelopment scheme.
Since this auditor's report was published in 2008, we found out that San Bruno's City Treasurer may have also lost a big chunk of the Redevelopment Agency's money on bad investments. The San Bruno Redevelopment Agency may have even more financial problems than indicated by the last auditor's report.
C). During his Council presentation, O'Leary also stated:
".....the [San Bruno Redevelopment Agency] borrowing is actually from the City's Equipment Reserve and uh that borrowing and the Redevelopment Operations has no impact on the rates or on the water or wastewater enterprise accounts."
When I first heard this, I almost fell off my chair laughing. O'Leary and other San Bruno City Staff members spent a lot of time at the May 10th Council Meeting saying that the rate increases were necessary, in large part, to buy equipment. Then, O'Leary said that the millions of dollars of Redevelopment spending has been funded by draining money out of the City of San Bruno's Equipment Reserve Fund. O'Leary then came up with the ridiculous conclusion this borrowing by the San Bruno Redevelopment Agency, from the City Equipment Reserve Fund had no effect on the water - wastewater rates. Nonsensical deceptions aside, the fact remains that this Council, the City Manager, and other top City Management employees have known, for more than a decade, that a large amount of money would be required to maintain and replace San Bruno's water and wastewater systems. Yet, like a gambler gambling away the money their family needs for rent, food, and clothing; this Council gambled away $3.9 million of City money on a troubled redevelopment scheme on top of the $12 million they already squandered on this scheme.
To justify the brutal annual rate increases resulting from their reckless gamble of taxpayer money on troubled Redevelopment schemes, this Council and their City government proxies have spent a lot of time talking about how run down the City's water system and wastewater system is and how much money is needed to fix it. Yet, as was previously mentioned, this Council had no problem gambling away more than $12 million of San Bruno taxpayer money, needed to repair the water-wastewater system they know needs repair, on their troubled Redevelopment scheme.
And that brings us back to O'Leary's ridiculous statement that the Redevelopment Agency's borrowings and operations have no impact on the rates or on the water or wastewater enterprise accounts. These borrowings and the Redevelopment Agency's activities have a major impact on water and wastewater rates. The simple fact is that scarce City financial resources were squandered on this Council's Redevelopment scheme instead of on maintaining and repairing San Bruno's decaying water and wastewater system.
This Council had no problem transferring $3.9 million to pay for their Redevelopment disaster. The would also have not had any problems spending this $3.9 million on San Bruno's aging water and wastewater systems. Instead of running up a total debt of $12.9 million to pay for Redevelopemnt this money should have been spent on the water and wastewater systems. Once again, by their own admissions, this Council has stated that they have known for at least 10 years that millions upon millions of dollars will be required to maintain and rebuild San Bruno's aging water and wastewater systems. And knowing this fact, this Council, acting in their capacity as Redevelopment Agency Members, have squander $12.9 million on the troubled Redevelopment scheme instead of focusing their efforts and scarce City financial resources on the decaying water and wastewater system.
D). During the May 10, 2009 San Bruno City Council Meeting, this exchange took place between Mayor Franzella and San Bruno Administrative Services Director O'Leary:
Franzella: "The question was asked on the Lehman Brothers loss. How does that effect the uh, rates..[O'Leary hesitates]..Franzella: "The question was asked about the Lehman Brothers""
San Bruno Administrative Services Director O'Leary: "Uh the City uhm as many others Cities in San Mateo County, and many cities and other investors uhm across the country uhm did in fact uh have money in the San Mateo County Investment Pool that uh uh was lost as a result of Lehman bankruptcy back in September of 2008 uhm this loss was accounted for in the current year. The biggest uh the biggest impact of the loss was uh to the Redevelopment Agency ehr I'm sorry, to the General Fund, the City's General Fund uh but in fact uh the two Enterprise Accounts uh suffered uh some eh the two enterprise uh experienced some loss as their portion of this overall loss uh the impact on the rates that the that City Council is considering uh that loss was accounted for this year and it has no impact on the rates that are being proposed for next year."
Uh, once again, Mr. O'Leary's statement is, misleading and inaccurate with, what in my opinion is, an intent to obfuscate the facts. This guy gets somewhere between $11,723 to $14,386 per month in salary as well as a platinum plated benefit and perk package from San Bruno's taxpayers. One wonders if O'Leary gets paid by the number of "uhs" he can parse his serpentine statements with.
The City of San Bruno lost somewhere between $1.466 million and $2.246 million of San Bruno taxpayer money on bad investments. To say that this catastrophic loss has no impact on water and wastewater rates is as ridiculous as saying that subprime mortgages had nothing to do with the collapse of the US banking system. The loss of this San Bruno taxpayer money means that it is not available to pay for the maintenance and rebuild of San Bruno's water and wastewater systems.
Every dollar that San Bruno's City Council and Manager lose or squander on bad investments and failed real estate schemes means that there is one less dollar to pay for the maintenance and replacements of San Bruno's water and wastewater systems. This expense is then passed on to San Bruno's ratepayers.
2). During the Council Meeting, San Bruno's City Manager Jackson tried to undermine an informative flier published by the San Brunans for Better Government (SBBG). This flier was responsible for bringing many San Bruno residents to the Council Meeting to oppose the rate increases despite the best efforts of the City to obscure and hide the rate increases from the public and engage in a campaign of deception about the rate increases. Unlike the rate increase notices, required by law to be sent out by the City of San Bruno, most of the the San Bruno residents who showed up at the May 12 Council Meeting received the SBBG flier.
Admitting that the City of San Bruno was, in fact, raising water rates by 40% and wastewater rates by 33% as truthfully described in the SBBG flier, Jackson treated everyone to several minutes of bureaucratic doublespeak, in an attempt to further obfuscate the facts, by saying that the information in the SBBG fliers was inaccurate because the rate increases were not 40% a year. We can easily dismiss City Manager Jackson's serpentine efforts by simply stating that the SBBG rate increase flier never inferred or directly stated that the rate increases were 40% a year. San Bruno City Manager Jackson made up this fairy tale so that she could draw negative attention to the SBBG rate increase fliers notifying San Bruno's residents about the rate increases manufactured by San Bruno City Manager Jackson and her Council sponsors.
This shameful performance by San Bruno City Manager Jackson is especially insulting to the intelligence of San Bruno's residents because it has been inferred, in the statements of many San Bruno residents who spoke at the May 12 Council Meeting, that the City of San Bruno never sent out the rate increase notifications as required by law. Many of the people who attended the Council Meeting and spoke specifically stated that they never received any warning (as required by law) about the rate increases. We still have no proof that the City of San Bruno sent out the rate increase notifications as required by law.
3). Also, during the May 12 San Bruno City Council Meeting, Councilmember Ruane said that this Council was making the hard decisions to raise water and wastewater rates because past Council's had not had the courage to make these decisions. Which former Council is Ruane talking about?
San Bruno Mayor Larry Franzella has been the Mayor of San Bruno since 1999, he also served as a Councilmember in the late 1980's and early 1990s. With the exception of Councilmember Medina, the Members of the San Bruno City Council have each served on the San Bruno City Council for more than 13 years. Councilmembers Ruane and O'Connell have been on the Council since 1995. Councilmember Ibarra has been on the Council since 1996.
Ruane is trying to lay off the problems created for San Bruno by the incompetence and malfeasance of this Council on Council's from the 1980's? The 1970's? The 1960's? Ruane and his Council cronies have been making damaging, bad decisions that have resulted in the financial demise of San Bruno for the past 14 years. Political hacks like Ruane don't admit to their mistakes. They are always trying to find someone else to blame for the problems they create.
4). The May 12 Council Meeting also featured San Bruno City Councilmember Irene O'Connell's attempt at self absolution. It was almost as if O'Connell was channeling the disembodied voice of President Nixon's ghost saying, "I am not a crook". O'Connell launched into a wandering, feverish discussion about how everyone in town has known her since she was a girl and how everyone knows her family and how cronyism and corruption did not exist on the Council and if anybody had any proof to come forward and give the Council proof and they would make sure it was looked into.
Ah, yes, Hamlet, Act 3, Scene 2, "The lady protests too much, methinks." Councilmember O'Connell's claims that she is not corrupt and the Council is not corrupt; when she has not been charged with being corrupt, are interesting.
Councilmember O'Connell's demand for anybody having evidence of Council corruption to come forward and present the evidence to the Council so they can look into it is also interesting. Unfortunately for Ms. O'Connell, the City Council is not a law enforcement agency. Allegations or evidence of corruption and/or other misdeeds by any Member of this Council would have to be sent to the appropriate law enforcement agency first. I'm sure O'Connell would love to be able to have this Council sit as the chief investigator and arbiter of allegations pertaining to corruption or misdeeds by Councilmembers.
