Thorny Rose take on the State of the City

Wayne Lusvardi, chairman of the anti-Measure D group Citizens for Responsible Government, which opposes the measure on Pasadena’s Feb. 5 ballot, didn’t show up at the Doo Dah Parade Sunday to take his turn as the city’s annual Thorny Rose, but he did compose a long rebuttal to Mayor Bill Bogaard’s State of the City address. A shorter version will run as a printed letter to the editor in the Star-News of Jan. 22; the entire text, links and all, without any trimming or copy-editing, appears below.

Rebuttal to State of the City Address of
Mayor Bill Bogaard
January 18, 2008
Mayor’s Speech: http://www.insidesocal.com/pasadenapolitics/2008/01/sahtsee.html

A BUDGET REALITY DISCONNECT
Citizens for Responsible Government

Pasadena Mayor Bill Bogaard’s State of the City speech (“A Vital Connection”) delivered
January 17 reflects a vital disconnection with the mood of the citizenry and from the facts about the status of the City budget as we face a likely national economic downturn, an avoidable State budget deficit from overspending, and the specter of imposing new “blue sky” taxes on the Internet if Measure D is passed and Congress lifts the Federal moratorium on Internet taxes which is likely as soon as the public heat is off national elections in November 2008.

It is not possible in this amount of time to actually rebut the Mayor’s message in full and in detail, nor might it be useful. But let me make a few comments about the most imminent issue – Measure D – the Internet Tax – and the Utility User’s Tax on Water and Electricity as well as the large budget surplus the City has amassed in its Stranded Electricity Reserve Fund without first offering its customers a rebate.

Pasadena’s Water and Power Department says each customer’s electric bill includes a rebate but doesn’t disclose how much this discount is on each bill. Everyone’s utility bill is a “Bermuda Triangle” of undisclosed discounts and overcharges siphoned into the City’s General Fund. This “trust me – your utillity bill is correct” policy must be made more accountable. This sort of chicanery is why the California Supreme Court forced cities in California to obtain a majority vote before imposing Utility User Taxes.

As to the Utility User’s Tax on telephone and Internet usage known as Measure D, the Mayor is concerned that the City will lose $10 million per year in revenues for “critical City services.” Not mentioned in the Mayor’s report of the City’s economic situation is that Pasadena ran a $26 million budget surplus last year. If Measure D – the Internet Tax – is defeated Pasadena will merely have a $16 million budget surplus and there will be no effect on vital city services or city employee’s salaries or overtime. What the political fight over Measure D is all about is Internet taxation, for the first time and forever, and how much budget surplus the City should responsibly have – a whole lot or somewhat less than prior years.

What Mayor Bogaard conveniently avoided saying is that Pasadena has averaged a $21.6 million General Fund budget surplus over the last 8 years and has a whopping $633 million in cash and investments, including over $60 million surplus from overcharging of our electricity bills in its stranded electricity reserve fund. Pasadena has refused to rebate you the electricity customers these overcharges and instead is proceeding to plan to spend the money on a list of “Unfunded Priority” luxury projects such as a boondoggle park over the 210-Freeway that will expose children to auto exhaust fumes and will be an attractive nuisance. None of these “Unfunded Priority” projects will increase the Gross Domestic Product (GDP) of the City or raise the property tax base.

Pasadena’s cash, reserves and investments are tantamount to a bank account of $11,669 for every household in the City. Do you think the City of Pasadena should be holding a bank account of $11,669 for your household especially while we enter a likely economic downturn? To put this in perspective the average credit card debt per household is about $2,500 per household according to the U.S. Federal Reserve.

Pasadena doesn’t need a $10 million per year phone tax and sleeper Internet tax. The City of Pasadena has gorged itself on taxes for the last 8 years has had an average annual General Fund surplus of over $21 million per year.

Click here to see read the City of Pasadena General Fund financial statements showing a surplus for 2007 of $26 million.

http://crgovernment.net/yahoo_site_admin/assets/docs/2007_General_Fund.5121405.pdf

Click here to read the city documents showing that the City of Pasadena was holding $633 million in cash and investments as of September 30, 2007. http://crgovernment.net/yahoo_site_admin/assets/docs/cityfunds.4215423.pdf

Click here to read the financial statement notes showing that the City of Pasadena is hiding $60 million in a slush fund inside the City-owned Pasadena Water & Power fund.

http://crgovernment.net/yahoo_site_admin/assets/docs/Pagefrom_PWP2007_annual_report.5121433.pdf

Click here to read the City of Pasadena payroll report showing grossly overpaid City of Pasadena employees, with 412 employees making more than $100,000 in 2006. http://crgovernment.net/yahoo_site_admin/assets/docs/pasadenasalaries.4214842.pdf

Pasadena collects the highest General Fund revenues per household per year – $3,761 – of all the largest cities in Southern California. A General Fund is for city operations such as police, fire, libraries, and parks. By comparison, the City of Glendale does police, fire, libraries and parks for $2,307 per household per year. Even the wealthy and cultural arts City of Santa Barbara runs its municipal services for only $2,920 per household per year. And Santa Barbara has roughly the same crime rate as Pasadena.

Rebuttal to Councilman Sid Tyler
Allow me to also respond to City Councilman Sid Tyler’s recent claims that: Citizens for Responsible Government wants to wipe out $30 million in Utility User’s Taxes on electricity, water, and natural gas, not just $10 million on phone/internet taxes; that the City has no flexibility to fund a half percent ($1 million) shortfall in its General Fund Reserves; and his claim that the City has a “right” to impose a Utility User’s Tax.

No less than the California Supreme Court has ruled that overcharging for municipal and public utilities is illegal. Pasadena has no “right” to continue Utility User’s Taxes without a vote of the people. Pasadena has called a phony financial “emergency” when it has over $6 million in its Utility User’s Tax Reserve Fund, a $60 million surplus stashed in its Stranded Investment Fund, and over half a billion dollars in cash and investments.

Contrary to Sid Tyler, Citizens for Responsible Government has no intention to wipe out the entire $30 million in revenue the City now imposes on residents utility bills. CRG is about “responsible” government, not no government. Pasadena needs to eliminate the phone/internet tax because it doesn’t need $10 million in taxes when the City ran a $26 million surplus in 2007 and averaged over $21 million in surpluses the last eight years.

The claim that the City has no “wiggle room” with its Reserve Funds to plug a half-percent ($1 million) shortfall in its General Fund Reserves is absurd. Sid Tyler’s statement is like a family saying it only has 7.5% of its annual income in savings instead of 8% when it has over 3 years of annual income sitting in its checking account.

There is a “Vital Disconnection” between what the City says in its official pronouncements and the reality of its Budget surpluses. Don’t believe the City’s deceptive statements that it passed an Amending Ordinance to Measure D which exempts the Internet from taxation. That Amending Ordinance has tricky wording that only exempts “Internet Access” not Internet Usage. Measure D is an EXPANSION of a tax to include the Internet not a mere Continuation of a tax. Vote NO on Measure D on February 5, 2008.
Wayne Lusvardi, Chairman
Citizens for Responsible Government