An Ominous Cloud Forms Over The New Community Center
Oops! The new Fullerton Community Center opens up tomorrow, but this news alert might put a damper on the festivities. It turns out the state has rejected redevelopment funding for the project even though it’s already been completed, meaning the city’s troubled general fund may be on the hook for an extra $19 million that it does not have.
It looks like a generation of reckless redevelopment spending has led us to a very dark place.
RDA Woes Trigger Fullerton, Calif., Downgrade
Friday, October 5, 2012 | as of 12:53 PM ET
Standard & Poor’s downgraded Fullerton largely based on California’s rejection of its recognized obligation payment schedule for the city’s role as successor agency to its former redevelopment agency.
California cities could elect to become the successor agency to their RDAs after legislation dissolving the agencies went into effect early this year.
S&P lowered the city’s long-term rating to AA-minus from AA and assigned a negative outlook to lease revenue bonds issued by the Fullerton Public Financing Authority.
Standard & Poor’s also lowered its long-term and underlying ratings to AA-minus from AA on Fullerton Redevelopment Agency certificates of participation and the city’s previously issued revenue bonds.
“The negative outlook reflects what we view as the city’s exposure to previously state-rejected redevelopment projects which, if not approved, could affect Fullerton’s credit fundamentals in the future,” analysts said in the report. “In addition, city officials estimate some continued structural imbalance in the general fund, despite some previous budget reductions to offset historical revenue declines.”
A portion of the disputed bond proceeds has not been spent, but $22 million was used to build the city’s community center.
The state rejected that as a valid redevelopment project because the city, as opposed to its redevelopment agency, had signed the contracts with the developer as was the city’s practice pre-dissolution, according to the report.
The city has resubmitted its request to the state Department of Finance, but if it rejected again, the city could be on the hook for $19 million.
However, city officials told analysts that it would use reserve money from the city’s general fund to cover the bond payments.
Analysts credited Fullerton for continuing to budget appropriate amounts in the general fund to fund both its Series 2010A bonds, which were backed by federal subsidies that now may not be available, and on the COPs issued for the RDA.
The 2010A debt was issued as federally taxable recovery zone economic development bonds. The city has budgeted for the full cost of payments on the bonds regardless of whether it receives the federal subsidy.
62 Replies to “An Ominous Cloud Forms Over The New Community Center”
“city officials told analysts that it would use reserve money from the city’s general fund to cover the bond payments”
Oh, they will? I wonder if the “city officials” asked the council about that.
We don’t bother with that. We ask Gin Flurry and she mumbles something or other.
Why would you blame someone who is NOT on city council, and has not been involved in Fullerton politics for 10 years? I know you hate Flory (for whatever reason), but to blame her for this is a bit disingenuous. I hate to be the voice of fairness, but no one else on this blog seems to be interested in intellectual honesty.
Borrowing our way out of this mess just got even more impossible.
Now we have a homeless shelter.
Lets do this!
the restrooms on the west end have showers!
I’m seriously thinking about moving out of Fullerton. It is so poorly managed that I don’t know if they can dig their way out of this mess.
I suggest LA or San Bernardino.
Totally what happens when people stop paying attention.
Genacos report is really referring to our city at large. Well lets wait to the election to see if people will vote to change the state of our fiscal irresponsibility . complacency of our finances.
“The state rejected that as a valid redevelopment project because the city, as opposed to its redevelopment agency, had signed the contracts with the developer as was the city’s practice pre-dissolution, according to the report.”
That seems like an awfully technical violation, given the penalty. OK, if I get elected, I think that I will try to reverse this legislatively. Anyone want to ask Huff for comment?
Since there is no tax Greg doesn’t like. Let’s do a word tax:
.01 per word
That covers the $19,000,000.
But like most democratic policies in California, there’s a catch: Since Greg had been recieving public assistance (unemplyment, food stamps etc…) the stae will forgoe the tax payment and will make it up from the General Fund.
The result: We pay Greg’s salary for blogging, he skips out on the TAX, and we cover it from our taxes (General Fund).
Now that’s America!
He made $1999 last year as a lawyer.
No, I made less than $2000 while just starting my own law practice (late in the year.) I made more money before then working as a contract attorney.
I don’t get a salary for blogging. You’re thinking of some of Tony’s employees.
If you get elected? Pigs will fly out of your anus first.
I think you meant to say:
If I lose by less than 40 points I won’t slink off to infect another metropolitan area with my twisted sense of self importance.
Do I really need to clue you in on the wording of campaign promises, “Fred”? You guys want me to campaign, you get upset when I campaign — what is it with you fickle people?
“what is it with you fickle people?”
I guess ALL the people who respond to you are, “fickle people” That “over-generalizing” as you say.
No, that statement applies just to the fickle ones.
Nobody cares if you campaign or not. It just happens that you haven’t because:
1) You don’t know how.
2 You have no money because you only made $1999 in 2011.
3) You are too fat and lazy to put on clothes and leave your dingy apartment.
Oh — also, you changed the subject. From what I can tell, this is a ridiculous penalty to the city that can and should be addressed legislatively.
I realize that that undermines your desire to see Fullerton go bankrupt so that you can introduce workhouses here. (Read Dickens if that reference eludes you.)
It was musical chairs and the music stopped. A lot of cities out there are getting hammered. What kind of shape will Irvine be in when this is all over?
Redevelopment was used and abused and now it’s time to pay the check.
Who is left holding the check. And the check is owed to whom?
The people, of course, are the ones left holding the check. Unfortunately, the Culture of Corruption got up to take a leak when the waiter brought it out.
I don’t think there’s a single municipality out there that didn’t have partially completed or funded projects when RDA’s were shut down. It’s good to shut down RDA’s, but it wasn’t very orderly in it’s execution.
“Who is left holding the check. And the check is owed to whom?”-Government should be a Zero Sum game, but it’s not.
Just in case any of you out there are in doubt as to who’s supporting the likes of Gin Flurry/Jan Flory, I invite you to look at the list of retirees making well over a $100k per year from the city of Fullerton who have pooled their money to try and get Jan Flory elected to the Fullerton City Council…
* Pat McKinley
* Chris Meyer
* Paul Dudley
..as well as a current city employee who’s a “plan check specialist”,named “Nick Lopez” who gave $500 to make sure the gravy train keeps rolling.
I also found it interesting that “Stewart Shanfield” who list himself as a “Surgeon at St. Judes” donated money to Jan’s campaign?
I’m pretty sure that he’s the same horse’s ass that chided residents for sullying the reputation of the Fullerton Paramedics after they delayed treating Kelly Thomas.
I also noted that the General Manager to the notorious police bar hang-out, “Heroes”, named “Billy McKinley” (related to Pat McKinley?) is listed as having having donated $725 for “Flory For Fullerton” t-shirts.
I’m also left wondering why John Phelps, President of the Wilson Phelps Foundation, would donate $10,000.00 to Jan Flory’s campaign.
p.s. It takes awhile for the city’s server to download this document, however I guarantee it’s worth the wait, in order to educate Fullerton voters how the City Council is being bought out by the employees that are supposed to work for the residents of Fullerton.
How many times do the employees of a corporation get to vote for the Board of Directors?
That’s essentially what this is.
Perfectly legal too.
Shine on you crazy Diamond.
I don’t know what these simpletons over here on the FFFF blog would do without your brilliant metaphors and condescending tone.
They’re so beneath you Greg, why don’t you let me deal with these chumps so you can focus all your energies on your own blog?
Send me your resume and portfolio and I’ll decide whether to entrust you with this sacred burden.
Ridiculous is what government is all about. So sorry it took you so long to get it.
Yeah, government actions can be good, bad, or in-between. I realize that you may find this a complicated concept.
They’re turning your city into the laughing stock of OC. Dirty police force, majority of Council recalled, illegal taxes and now billed for $19M that you ain’t got.
You folks took your eye off the ball for a few years and the shysters ruined your town.
This is no big deal. Another 19 on top of 500-just pan out the projections over a longer period with increased rate of return assumptions and increase the fluoride in the water. You guys got it covered right?
Yawn, the City will get the $19M approved. The State just doesn’t understand the transaction. After all they are so bright that they have given us nearly a decade of budget deficits…
The downgrade might and could get expensive.
Uh, they understand the transaction. It was signed by the City, not the Agency. And they want the dough. Fullerton is screwed.
For the uneducated, the City and the Agency sign an agreement every year that the City will act as the Agency’s agent to build projects, but is still the agency’s money and project. The Controller’s green eye shade types don’t understand local government finance (or, for that matter state finances). The downgrade was actually good for investors, as the value of the bonds on the open market rose 5%. What is not to like!
I’m not sure I’m following your logic?
You said that the downgrade in credit rating was actually good for investors, correct?
Why is it then that if my personal credit score drops, that businesses want to charge me a higher interest rate to borrow money from them?
So I’ll guess that your saying that if anyone would want to invest in these municipal bonds, that we as residents would have to pay them a higher interest rate in order for them to lend us money.
How is this good for Fullerton residents?
I guess I am uneducated as well.
You are telling us that a downgrade that leads to an interest rate hike to borrow resulted in a 5% rise in the principle value?
Principle and yield always run inverse to one another. At least that is what I was taught in Economics and Finance in college. A downgrade results in an interest rate hike due to the cost of borrowing rising due to the lowered credit rating.
Explain to me how a downgrade of credit is good?
I am uneducated too.
What is the good of being in debt? In these devastating last few years I and my neighbors are struggling for income as our investments (well theirs, not mine) are losing value. Worse, my paid-off home has lost 70% of its value while my neighbors are upside down.
I am having to face going back to work with my limited equipment, old body, and debt-free existence to survive without having to go into debt. My young neighbors are having to face the same with debt they can only hope to pay off sometime in their lives. My old neighbors have no ability to earn and are facing losing their home to live out their years in their motor home.
What prospect does Fullerton have? To tax the children? And to pay off whom?
It may not make sense, but that is exactly what happened in the bond market on the day of the announcement. I hold some of these bonds, and they went from 102 to 107.
So what? Rating goes down, yield goes up. So does the interest rate for refinancing.
Damn you’re dumb. Are you Chris Meyer?
So i have this straight, the bond price went up which means the yield went down after a downgrade? IE the cost for borrowing went down. A miracle of finance.
Hold those bonds you own and take them to the Vatican immediately as you are witnessing and possess something on par with “The Miracle of Our Lady of Fatima”. The Pope needs to hear about this…..
Is your real name Josinta???
The State also gave the green light for [email protected], so you got that part right.
Ever lasting 9/11, a day everyone will remember forever. LE and Fire will suck off it forever, even if they were not there. What a shame. 9/11 heros and the aftermath of leaches.
Ever lasting War on Drugs set the table, 9/11 provided the feast. No sarcasm intended. It’s been a pretty insidious thirty years.
“Home is where yor heart is” very very many have moved out so to speak.”
I tell people Im from Brea CA, tired of the sad confused looks on peoples faces, then there are the questions. 🙁
Anybody who thinks the state will approve this the second time around must be sucking on a bong, especially if Prop 30 goes down.
The rules of the game have changed. The only way the state can stay alive is by stealing from the local governments to fill their financial holes. Particularly when the fed starts squeezing Sacramento by reducing their funding which is bound to happen with a $16T plus debt with annual deficits over $1T.
The only way the local governments can stay alive is by stealing from you.
It always rolls downhill.
The City should recoup by selling off the real estate it has been amassing. The Restaurant on the hill for a start, calling it a Park, indeed.
That Park is my favorite place to walk-off prime rib and booze.
$19 million is about what Ramos-Cicinelli-Wolfe-Hampton-Rincon-etc. will cost the city in lawsuits. Perhaps if they paid this out of pocket the problem would be solved?
Fullerton couldnt get insurance without opening their police books to them, according to Tuco, so they didnt, Fullerton is going to pay by itself.
Next time, show your work.
The redevelopment tit was bound to run dry sooner or later. Good riddance, it closed a chapter large-scale thievery.
I have a general question and could someone answer it for me: What is the current status of the Fox Theater? It looks like it’s turning into a City equipment yard.
I was wondering the same thing as I drive by the property daily. I thought it was going to be a bustling hub of commerce by this time but it appears to be something I would find at Calico Ghost Town.
Is the theater going to open, where is the old marquee and will it ever be installed, questions like this and others kind of puzzle me.
Shortages of funding will hurt Fullerton for quite a while. Not having access to major bond funding due to these $10,000,000 + costs whether to cover for police abuse or redevelopment screwups will ensure that the City will be short of money to do any major cleanups.
My suggestion: Open more bars in downtown Fullerton. It worked for Blankhead and Doc Hee Haw covering for their friend Daryl Gates oops Pat McPension! (I forgot Gates died, McPension was just sleeping at those meetings.)
I’ve missed you all. I’m sure you miss me too. The circle jerking still continues with all 10 of you I see. I miss the tugs.
Hey its, SICKO PSYCHOSEXUAL TURD.
Nice day for the SlideBar. Beautiful day. Lets all get in a circle and eat Mac n Cheese and do shots.
Have a good weekend.
O’Malley must be back from vacation.
is Omaley that scrawney guy with the crazy eyes and flecks of spittle at the corners of his mouth whose picture was in a thread last month? WOW, between him and that Shonee fellow with the bong they really ought to submit to being drug tested before they are allowed to participate at any further city council meetings
The List of Psychopathy Symptoms: Hervey Cleckley and Robert Hare
“1. Considerable superficial charm and average or above average intelligence.
2. Absence of delusions and other signs of irrational thinking.
3. Absence of anxiety or other “neurotic” symptoms. Considerable poise, calmness and verbal facility.
4. Unreliability, disregard for obligations, no sense of responsibility, in matters of little and great import.
5. Untruthfulness and insincerity.
6. Antisocial behavior which is inadequately motivated and poorly planned, seeming to stem from an inexplicable impulsiveness.
7. Inadequately motivated antisocial behavior.
8. Poor judgment and failure to learn from experience.
9. Pathological egocentricity. Total self-centeredness and an incapacity for real love and attachment.”
“6. LACK OF REMORSE OR GUILT: a lack of feelings or concern for the losses, pain, and suffering of victims; a tendency to be unconcerned, dispassionate, coldhearted and unempathic. This item is usually demonstrated by a disdain for one’s victims.
7. SHALLOW AFFECT: emotional poverty or a limited range or depth of feelings; interpersonal coldness in spite of signs of open gregariousness and superficial warmth.
8. CALLOUSNESS and LACK OF EMPATHY: a lack of feelings toward people in general; cold, contemptuous, inconsiderate, and tactless.
9. PARASITIC LIFESTYLE: an intentional, manipulative, selfis, and exploitative financial dependence on others as reflected in a lack of motivation, low self-discipline and the inability to carry through one’s responsibilities.
10. POOR BEHAVIORAL CONTROLS: expressions of irritability, annoyance, impatience, threats, aggression and verbal abuse; inadequate control of anger and temper; acting hastily.”
Hes got #5, 6, 7, 8, the other lists #7, 8, 10, Covered with an A+ 🙁