The Shameful Water Triple (Er, Quadruple) Dip

UPDATE: Of course the comment from “Do the math” is right on the money. The 10% in-lieu fee is defined as a percentage of gross revenue – including the in-lieu fee itself! This tricky little dodge adds 10% of the 10% – an add-on of yet another 1% to the cost of your water bill! Uh, oh! Quadruple dip!

The Desert Rat

Way back in 1970 the Fullerton City Council passed Resolution No. 5184 dictating that 10% of the gross revenue collected by the Water Department was a reasonable amount to cover ancillary costs from supporting City departments. Here’s the key language from the Resolution:

That an amount equal to ten percent of the gross annual water sales of the Municipal Utilities Department during the fiscal year ending June 30, 1970 is hereby transferred to the General Fund in payment for the services of the Finance Department of the City and of the City Administrator, the City Attorney and the City Clerk to the Municipal Utilities Department of the City as a part of the operating costs of the waterworks system of the City during the fiscal year ending June 30, 1970.

That at the end of the fiscal year ending on June 30, 1971 and at the end of every fiscal year thereafter, a sum equal to ten percent of the gross annual water sales of the Municipal Utilities Department of the City shall be transferred to the general Fund of the City in payment for the services, during such fiscal year, of the Finance Department of the City and of the City Administrator, the City Attorney and the City Clerk to the Municipal Utilities Department of the City.

What sort of justification proved that 10% of the water revenue in 1970 should have gone to the General Fund is anybody’s guess.

In 1982 the City Council passed an ordinance permitting itself the authority to collect an “in-lieu” fee from  the water utility as a fixed percentage of revenue. Despite the name change, the City continued to add the historic 10% to Fullerton’s water bills, and rake it off directly into the General Fund – without so much as a second thought.

A bit confusing? Not really. The original justification for the fuzzy 10% figure was to reimburse the City for vague incurred costs; calling it an in-lieu fee never changed the inescapable fact that the 10% amount was supposed to pay for actual costs associated with running the waterworks. Either way, as of 1997 and the implementation of Prop. 218, that became illegal.

Flash forward to today, and peruse this year’s budget documents. The Water Fund is Fund 44. Check out the total column on the right.

Summary of Appropriations by Fund.

Notice the amount directly allocated in the 2011-12 budget to the City Manager and Administration: $1.7 million ($29,917 + $1,678,962).

Now let’s see some actual charges. Observe Fiscal year 2009-10, over there, in the left column.

Summary of Expenditures and Appropriations by Fund

Good grief! As you might have guessed (based on this year’s budget), in 2009-10 the City directly charged the Water Fund over $1.5 million for the City Council, City Manager, and Administrative Services; plus fifty grand for Human Resources, and $100,000 for Community Development!

And this means that those services that were originally being used to justify the 10% levy on our water bills are already being charged directly to the General Fund. Double Dip!

Of course it gets worse. We now know the 10%  is a double dip; but hold on to your water bill. Because the directly charged costs for “administration” are considered part of the base waterworks cost; the automatic 10% in-lieu fee (which was supposed to pay for “administration” but that pays for nothing), is applied to that! That increase this year is at least $170,000, if you add 10% to that $1.7 million figure we saw in the first table. Triple Dip!

And that, Friends, is a triple gainer off the high board and right into the deep end of the pool.



Your Tithe is Man-dated At The Altar of The Almighty Bureaucrat

The upkeep just kept getting more expensive...

Everybody who goes to church is familiar with the concept of tithing – literally giving one tenth of your income to support the church and its good works. Of course the act is voluntary.

The people who pay for water from the Fullerton Water Works have been paying a tithe, too. You see, since 1970 the Citycrats have decreed that ten percent of the cost of a monopoly supplying you with water will be added to your bill, and then be immediately re-directed to the City’s General Fund.

In the early days, when water was dirt cheap it was a way to help pay for certain indirect costs of employees who were considered overhead support for the water works. It was called an “in-lieu franchise fee” like the ones the City charges other utilities to operate in Fullerton. Still, there was an immediate problem that nobody addressed: it was bad management, and bad accounting, and opened the door for all sorts of abuse. Decades later, in 1997, Proposition 218 was passed that specifically addressed the scam of governments charging “fees” that were nothing more than hidden taxes – just like Fullerton’s 10% in-lieu fee. It was now required that fee amounts be established through objective supportable analysis that was conducted transparently, in the light of public scrutiny. No longer could governments legally charge for more than any service was worth.

But Fullerton did. For 15 years the City continued to charge, then rake off a ten percent tribute from the Water Fund that went to pay for things like pensions and pay raises for all Fullerton city employees, stuff that had nothing to do with providing water to you. Not only did the city councils know about the scam, they heartily approved the slight-of-hand, year after year.

Meantime, the cost of water skyrocketed, increasing nearly 350% between 1997 and now, jacking up the illegal tax from $700,000 a year in 1997 to over $2.5 million a year now. That’s a rate of about 23% a year, just in case you’re inclined to keep track. A staggering total of almost $27 million has been surreptitiously extorted from you since Proposition 218 went into effect.

Those who support this cheapjack end run think it’s right and proper for you to pay this tithe without your knowing it, and without your consent. After all they’ve had plenty of opportunity to insist, at least, that notification of the 10% diversion be made on each water bill. But they never have. And that’s because their first priority is continue funding six-figure pensions, automatic raises for employees, and all the other things that constitute business as usual in their Church of The Almighty Bureaucrat. It’s their church, and as far as the High Priests and pharisees are concerned, you taxpayers can just sit in the back pew, way, way back there in the dark, and keep your mouths shut.

“Dick” Ackerman Moral Weathervane of the Anti-recall Team. Part 3.

Heh, heh. When nobody was looking the collection plate went missing.

When you are a moral vacuum like Dick Ackerman, you really don’t stand for much of anything except your own well-being. Public service? Hell, no! It’s all about personal service. Everything else is just platitudes and bull shit.

An indication of Mr. Ackerman’s future career path was clearly established with the creation of a fake charity by his wife that was simply a mechanism to get state legislators (one of whom was Mr. Ackerman) alone on Maui with lobbyists for big corporate interests who actually paid for the whole junket. Ackerman is hilariously quoted as saying how beneficial these get togethers were, as if being lobbied in Sacramento (instead of Hawaii by the same cast of characters) was somehow just so much more darned inefficient. FFFF posted all about the utterly phony Pacific Policy Research Foundation, here.

I don't even know how I got into the room...

That was just the start of Mr. Ackerman exploiting Mrs. Ackerman for family gain. And it wasn’t enough that The Dickster got the missus on the Metropolitan Water Board where she naturally supported huge water rate increases (true, that bar was already set really, really low).

In the summer of 2009, while The Dick was illegally lobbying the State Legislature in the sordid the OC Fair Swindle, his protege, 72nd  District Assemblyman Mike Duvall was caught bragging of nasty sexual accomplishments with a lobbyist; maybe the idea of nasty accomplishments with lobbyists ignited a fire in Dick’s political loins. By the end of September his wife, Linda Ackerwoman was running to replace the disgraced Duvall!

Now people endowed with a normal dose of shame would have simply receded into the background after the man they promoted was busted for moral turpitude. But the Ackermans are not so endowed. Dick’s immediate impulse was to promote the candidacy of the wife, a woman who had, apparently, never even held a job except as a “consultant” raiding her husband’s campaign accounts.

Well, okay. Lot’s of unqualified dimwits run for the Legislature. The real problem was that the Ackermans didn’t even live in the district. The Ackermans live in a top-secret gated community in Irvine! The State Constitution says you have to live in a district a year, but what the Hell, the State Constitution is for losers!

So Dick and Linda cooked up a fake address in the rumpus room of a Fullerton stooge. Well, technically they were carpetbaggers; but since nobody really believed they spent a night living in Fullerton a better word applies: fraud.

You mean they never really lived here. I guess I slept through that. Again.

As expected, Mrs. Ackerwoman got the endorsements of the Three Deteriorating Dinosaurs, all the statewide Redevelopment money, and the big corporate interest lobbyists. They ran one of the slimiest campaign anybody could remember. It hardly mattered. The Ackermans still lost to Chris Norby by a whopping 20 points in the Republican Primary. Within a few weeks they had reregistered to vote in the leafy precincts where their Irvine mini-McMansion is located. How’s that for a big F-you, Fullerton?

The point of the story is simple:  there is no basement so low that Dick Ackerman & Co. won’t crawl into it in order to pull a string or make a buck. And if you don’t recognize Dick as the moral barometer of the anti-recall campaign, you don’t know Dick.

State Assemblyman Norby Settles Santa Fe Lease Issue

I was there. So was Ackerman, McClanahan, Catlin and Bankhead.

Here’s a copy of a letter to The Fullerton Observer by our State Assemblyman, Chris Norby, who puts the lie to the notion that Tony Bushala got some oct of subsidy in his lease deal with the Fullerton Redevelopment Agency. It’s funny how those who have routinely handed out millions in corporate welfare to their pals and cronies have chosen to attack Tony for actually paying to renovate the City-owned building!

Well, such are politics. The anti-recall crew are incapable of defending the Three Dessicated Dinosaurs so they have to attack the messenger of the Recall. Anyway, here’s Norby’s letter:

Santa Fe Depot Redevelopment Deal the Best We Could Get

I hesitate to get in the middle of your lively give-and-take with Tony Bushala (Mid-Sept Observer page 9 “Redevelopment Foe Also a Recipient,” and the Early October page 2 Rebuttal ).

However, since I was one of five Fullerton City Councilmembers (including Don Bankhead, Molly McClanahan, Buck Catlin, and Richard Ackerman) voting to approve the old Santa Fe Depot lease, allow me to defend our action.

That lease was the only way to save the historic structure from demolition and make an outdated building commercially viable.

In 1987, the Santa Fe Railroad sold the depot to a private developer who then sought a demolition permit. To avert its razing, the Fullerton Redevelopment Agency acquired the depot and sought bids for those who could preserve, restore and operate it. Agency staff recommended that the Bushala Brothers, Inc. (BBI) be awarded the project.

BBI was the only firm not requesting public subsidies. It offered a $41,000 up front payment to the agency plus $340,000 to restore the building to its original condition. As BBI had just completed an award-winning restoration of the old Ice House (just across the tracks from the depot) it was well qualified. When the depot restoration actually cost $540,000, the overruns were covered by BBI.

BBI also applied for and received the depot’s recognition on the National Registration of Historic Buildings and Places.

The monthly lease payment to the agency is $1,326, which is adjusted annually for inflation. While the Observer contends this is below market rate, it was the best offer we had at the time to restore this historic building. In addition, BBI pays $12,000 annually in building maintenance and for all property taxes and insurance.

The agency retained all rental income from Amtrak for the waiting room and ticketing areas. The rest of the depot was largely baggage storage rooms and an abandoned loading dock – areas difficult to lease out.

I have been critical of redevelopment agencies’ abuse of eminent domain, handouts to developers and diversion of property taxes from public schools. However, I have voted for agency-funded public projects (roads, parks, libraries) and for the preservation of historic buildings, such as the Santa Fe Depot.

One could argue that an old depot was not worth the public investment. However, given the council’s commitment to save the structure, I believe this was the best deal we had.

Chris Norby Fullerton Current California Assemblymember and former Fullerton City Council & Redevelopment Agency Member, 1984-2002


A Lot of “Ifs” Could Put Nelson or Norby In Congress

Courtesy of Redistricting Partners


Tomorrow the new redistricting lines for Congress will be released by the Citizens Redistricting Commission. If the lines hold and my hunch about Ed Royce moving next door into the 48th District is correct, then those of us in the 40th Congressional District could soon have an opening for a new U.S. Congressman.

I spoke with both State Assemblymen Chris Norby and Supervisor Shawn Nelson about all the “ifs” today and they are both considering that job.

If that happens, then we would have a whole new set of “ifs.” For example, who would run for Supervisor or State Assembly? If Bruce Whitaker ran for State Assembly and won then who would run for Council? And if…well, you see where this thing is going.

Norby Hires New COS

According to our old Friend, Allan Bartlett (who apparently has had his posting priviledges at Red County restored), our Assemblyman Chris Norby has hired a new chief of staff to replace his old one. The new guy is named Bryan Lanza, who may count as his main claim to fame resigning from Abel Maldonado’s staff when the latter RINO went along with a big Demo tax deal.

Now, I’ve never heard of a government employee of any kind resigning on a matter of principle, so if it’s true, good for him.

The Sudden Relevance of Chris Norby?

Mr. Speaker! Let's kill Redevelopment once and for all!

Way out here at the end of Screech Owl Road the silence is almost absolute – only occasionally ruptured by the stray thump of Marine helicopters in the distance. It gives a man time to think in peace and quiet, and I’ve been thinking about Chris Norby ever since his post the other day about the possibility of a stake in the heart of Redevelopment.

I started watching Norby’s political career in Fullerton back in the early 80s. During his days on the City Council he was effectively marginalized by the various majorities who saw Norby as an annoyance and an irritant. His 18 years saw almost no accomplishment at all; ditto his seven years as a County Supervisor, years in which his colleagues saddled you Orange Countians with a massive unfunded pension liability.

The gods were certainly kind to Norby when they presented him with an unforseen chance to extend his professional political career in the form of an open mike and an open Mike’s mouth. Still, what the gods giveth with one hand… 2010 saw a big Democratic majority and an opportunity to pass a budget with a mere 50%+1 of the Legislature. Total irrelevance for an OC Republican, right?

Well, maybe not. For those sly gods also finally presented Norby with an opportunity to be a Capitol player via a monstrous budget deficit and a Democratic governor who actually seems sincere in willing to dismantle Redevelopment – as well as to divert special taxes away from make-work, feel-good programs like the First Five scam.

Chris who?

Governor Brown will have to fight the entrenched Redevelopment lobby that has tentacles wrapped around members of both parties, and a budget proposal that goes after it may well need to be supported by Republicans, too. And when it comes to pulling the plug on Redevelopment nobody has a better record than Norby. A Brown-Norby alliance? Relevance at last? Who knows?

Better late than never.

Redevelopment on the Chopping Block?

Dear Friends, I just returned for my first full legislative term here in Sacramento, having gained valuable experience serving for the past 10 months since the special election. One announced reform I can embrace is the new governor’s goal of abolishing redevelopment agencies and restoring their funds to counties and schools. As a longtime critic of these agencies, I’ve been called by numerous media outlets and colleagues on issues related to this little understood level of government.

Redevelopment agencies capture 12% of all property taxes statewide-that’s $6 billion annually diverted from school districts, counties and municipal police and fire protection. The funds are largely spent subsidizing private development projects whose promoters acquire land under threat of eminent domain, while 20% pays for low income housing projects.

The government should not be in the business of subsidizing private developers, nor of building housing projects. That’s the job of the private sector. This money needs to be restored to pay for infrastructure and services. Public money should build classrooms, not Costcos.

The agencies cannot be closed, however, until their nearly $100 billion indebtedness is paid off, but a phase-out over time could start, and long-evaded sunset clauses enforced.

While the legislature requires me to be in Sacramento on a weekly basis through June, I’ll keep regular district office hours every Friday. Visit or call 714-672-4734. I’m there for you.

A Colorfully Gesticulating Norby Loses The Skirmish, But Wins The Battle

Who will win the war? Follow the money.

The GOP Initiatives Endorsement Committee met this past Saturday to debate whether it should recommend to the State GOP to endorse Proposition 22.

Watch and see what happened during the questions and answer period. The proponents for Yes on 22 focused their argument on misdirected “local control,” and the fear that if it doesn’t pass Arnold Schwarzenegger will raid the cities’ Redevelopment funds and give them away to the schools. Hooray! The only problem is that by the time this is voted on Arnold will about as lame a duck as Daffy, and probably already reading the script for Terminator 5.

Did the most vocal Yes on 22 proponent, Jon Fleischman (hot dog alert @ 3:18), really think the voting members  in the room would be dumb enough to buy that “Arnold will cook up a bad budget” line? Well, they did – the vote was 9 Ayes and 8 Noes.  However, good news came on Sunday when the recommendation of the Initiatives Committee was tossed out by the GOP party who gave a thumbs down to the Prop 22 proponents.

Check out Chuck Devore, one of the few non-repuglicans in office. He gets it.

And yes, I really do have to wonder if Fleischman was on the Yes on 22 payroll. The Howard Jarvis group was no doubt bought off by the purchase of a slate mailer.