Archive for Government Fiscal Issues

Turn Down the Lights v. City of Monterey – CEQA Lawsuit Against LED Streetlights – Court Documents

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For background, see Using the California Environmental Quality Act (CEQA) to Turn Out the Lights – Prosperity Forum – January 10, 2017


News Coverage

Monterey Has Spent $80,000 Against Lawsuit Over Lights – Monterey Herald – October 26, 2013

Monterey Battles Residents Over Energy-Efficient Light Bulbs – Monterey County Weekly – July 14, 2017

City of Monterey Loses Lawsuit Over StreetlightsMonterey County Weekly – January 5, 2017


Court Documents

Turn Down the Lights v City of Monterey – Petitioner’s Petition for Writ of Mandate and to Enforce CEQA (March 22, 2012)

Turn Down the Lights v City of Monterey – Respondent’s Demurrer to Petition for Writ of Mandate – Memo of Points and Authorities – August 13, 2012

Turn Down the Lights v City of Monterey – Respondent’s Answer to Petition for Writ of Mandate (November 28, 2012)

Turn Down the Lights v City of Monterey – Petitioner’s Notice of Motion and Motion for Order Augmenting the Record with 421 Pages (July 22, 2013)

Turn Down the Lights v City of Monterey – Respodent’s Opposition to Petitioner’s Motion for Order Augmenting the Record (August 5, 2013)

Turn Down the Lights v City of Monterey – Petitioner’s Memo of Points and Authorities in Reply on Motion for Order Augmenting Record (August 8, 2013)

Turn Down the Lights v City of Monterey – Monterey County Superior Court Order Granting Petitioner’s Motion to Augment the Record (October 3, 2013)

Turn Down the Lights v City of Monterey – Petitioner’s Opening Brief (November 23, 2015)

Turn Down the Lights v City of Monterey – Respondent’s Motion to Strike Extra-Record Documents (December 23, 2015)

Turn Down the Lights v City of Monterey – Respondent’s Opposition Brief (December 23, 2015)

Turn Down the Lights v City of Monterey – Petitioner’s Reply Brief in Support of Petition for Writ of Mandamus (February 16, 2016)

Turn Down the Lights v City of Monterey – Petitioner’s Memorandum of Points and Authorities in Opposition to Motion to Strike (February 26, 2016)

Turn Down the Lights v City of Monterey – Respondent’s Reply to Petitioner’s Opposition to Motion to Strike Extra-Record Documents (April 29, 2016)

Turn Down the Lights v City of Monterey – Monterey County Superior Court Request for Further Briefing – Supplemental Briefing Order (August 1, 2016)

Turn Down the Lights v City of Monterey – Petitioner’s Supplemental Brief in Support of Petition for Writ of Mandate – September 2, 2016

Turn Down the Lights v City of Monterey – Petitioner’s Supplemental Brief in Support for Petition for Writ of Mandamus (September 12, 2016)

Turn Down the Lights v City of Monterey – Respondent Request for Judicial Notice (City of Monterey Documents) – September 12, 2016

Turn Down the Lights v City of Monterey – Respondent’s Supplemental Brief (September 26, 2016)

Turn Down the Lights v City of Monterey – Respondent’s Request for Judicial Notice (City of Monterey Documents) September 26, 2016

Turn Down the Lights v City of Monterey – Petitioner’s Supplemental Reply Brief in Support of Petition for Writ of Mandamus (October 3, 2016)

Turn Down the Lights v City of Monterey – Petitioner’s Opposition to Respondent’s Request for Judicial Notice – City of Monterey Documents – October 3, 2016

Turn Down the Lights v City of Monterey – Monterey County Superior Court Decision (December 20, 2016)

California Attorney General Opinion Says Frequently-Used School and Community College Bond Deals Are Illegal

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On January 26, 2016, the California Attorney General issued an opinion on a practice regarding bond measures that has long been questionable but continues to be rampant at California school and college districts: contracting with a firm to provide both pre-election bond measure “financial planning services” and post-election bond measure “financial advisory services.” That firm then typically makes a major contribution to the campaign to pass the bond measure.

The practice is described in Chapter 7 of the July 2015 California Policy Center report For the Kids: California Voters Must Become Wary of Borrowing Billions More from Wealthy Investors for Educational Construction.

Not surprisingly, the practice was determined to be illegal under most circumstances. The Howard Jarvis Taxpayers Association called it “good news” for taxpayers and a “long-overdue slap-down” of “the incestuous behavior of school districts with political consultants and bond salesmen.” See Attorney General Reins In Shady Bond Practices – January 31, 2016.

California Attorney General Opinion

OPINION of  KAMALA D. HARRIS, Attorney General – MANUEL M. MEDEIROS, Deputy Attorney General – No. 13-304 – January 26, 2016 (see the five questions and answers, below)

School and community college districts throughout the state have adopted such contracts. Often these items are listed on board agendas with vague language, probably to disguise the purpose from the public.

Some Examples

Martinez Unified School District approved this contract on September 29, 2015: http://laborissuessolutions.com/wp-content/uploads/2015/09/2015-09-29-Isom-Advisors-AKA-Urban-Futures-Contract-with-Martinez-USD-for-Bond-Measure-Services.pdf

Pay to Play San Rafael City Schools Connect the DotsSan Rafael City Schools gave a financial service firms a no-bid contract in June 2015 for $15,000 in pre-election and $65,000 in post-election advisory services for two bond measures. The firm contributed $9500 to the campaign to pass the bond measures.

Solano Community College District: Critic Questions Actions of Measure Q Bond Underwriters – Fairfield Daily Republic – September 13, 2015

News Coverage

California School Bonds Can Be Source of Scandal – commentary by Dan Walters – Sacramento Bee – February 8, 2016

Many other districts have used the same loophole to avoid competitive bidding on contracts and also solicited bond issue campaign funds from financial houses.

State Treasurer Bill Lockyer, and later successor John Chiang, were concerned about the practice, and asked Attorney General Kamala Harris whether it’s legal for those in the bond financing business to get involved in the campaigns. Harris, in an opinion issued last month, declared that it is illegal for firms to provide “pre-election services” in return for a promise to get the underwriting business should the bond measure pass.

…if school districts are cut free from the state’s underwriting of school construction, they need some new ethics standards.

California AG’s Opinion Targets School Bond Practices by Kyle Glazier – The Bond Buyer – January 28, 2016

School and community college districts violate California law if they hire outside firms to campaign for bond ballot measures or purposely incentivize municipal finance professionals to advocate for passage of a bond measure, the state’s attorney general said in a formal legal opinion…

A previous Bond Buyer investigation found a nearly perfect correlation between broker-dealer contributions to California school bond efforts in 2010 and their underwriting of subsequent bond sales, and financial advisors have similarly been accused of using “pay-to-play” tactics. Former California Treasurer Bill Lockyer questioned the legality of the practices…

California Muni Dealers Can’t Fund Bond Campaigns to Get Hired by Darrell Preston – Bloomberg – January 28, 2016

Former Treasurer Bill Lockyer, who sought the opinion in 2013, praised the ruling, and said it could open up school districts and vendors to prosecution.

“It makes it clear that prior practices of this sort are illegal,” Lockyer said in a telephone interview Thursday.

Lockyer sought the opinion after finding school districts in the state entered agreements with underwriting firms in which the districts award the dealers the right to sell the bonds in return for providing services to pass an initiative.

He said at the time the agreements raise “substantive questions” about whether school officials broke the law by using public money to advocate passage.


THE HONORABLE JOHN CHIANG, CALIFORNIA STATE TREASURER, has requested an opinion on the following questions:

1. Does a school or community college district violate California constitutional and statutory prohibitions against using public funds to advocate passage of a bond measure by contracting with a person or entity for services related to a bond election campaign?

2. Does a school or community college district violate California prohibitions against using public funds to advocate passage of a bond measure if the district enters into an agreement with a municipal finance firm under which the district obtains pre- bond-election services in return for guaranteeing the firm an exclusive contract to provide bond-sale services if the election is successful?

3. In the case of an agreement as described in Question 2, does a school or community college district violate California law concerning the use of bond proceeds if the district reimburses the municipal finance firm for the cost of providing the pre- election services from the proceeds raised from the bond sale?

4. In the scenario described in Question 3, does a school or community college district violate California law concerning the use of bond proceeds, even where the reimbursement is not an itemized component of the fees the district pays to the firm in connection with the bond sale?

5. Does an entity providing campaign services to a bond measure campaign in exchange for an exclusive agreement with the district to sell the bonds incur an obligation to report the cost of such services as a contribution to the bond measure campaign in accordance with state law?

CONCLUSIONS

1. A school or community college district violates California constitutional and statutory prohibitions against using public funds to advocate passage of a bond measure by contracting with a person or entity for services related to a bond election campaign if the pre-election services may be fairly characterized as campaign activity.

2. A school or community college district violates prohibitions against using public funds to advocate passage of a bond measure if the district enters into an agreement with a municipal finance firm under which the district obtains pre-election services (of any sort) in return for guaranteeing the firm an exclusive contract to provide bond-sale services if the election is successful, under circumstances where (a) the district enters into the agreement for the purpose (sole or partial) of inducing the firm to support the contemplated bond-election campaign or (b) the firm’s fee for the bond-sale services is inflated to account for the firm’s campaign contributions and the district fails to take reasonable steps to ensure the fee was not inflated.

3. In the case of an agreement as described in Question 2, a school or community college district violates California law concerning the use of bond proceeds if the district reimburses the municipal finance firm for the cost of providing pre-election services from the proceeds raised from the bond sale.

4. In the scenario described in Question 3, a school or community college district violates California law concerning the use of bond proceeds if the district reimburses the municipal finance firm for the cost of providing pre-election services from the fees the district pays to the firm in connection with the bond sale, whether or not the reimbursement is evident as a component of the fees the district pays to the firm in connection with the bond sale made on an itemized service-by-service basis.

5. Where an entity provides campaign services to a bond-measure committee in exchange for an exclusive agreement with the district to sell the bonds, the entity has an obligation to report the value of its services as a contribution to the bond-measure campaign in accordance with state law.

Nine Fall 2015 Commentaries on California School and College Bond Measures

San Joaquin-Delta Community College District on Verge of Violating Proposition 39 Requirements for Bond Measures

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I sent this email (below) on September 14, 2015 to the elected board of trustees, the top administrators, and the independent citizens bond oversight committee for the San Joaquin-Delta Community College District, based in Stockton.

The district wants to use $500,000 to develop a “facilities master plan” as a first step required by state law to ask voters to approve borrowing money via bond sales for facilities construction. That $500,000 would come from proceeds of bond sales authorized by voters in March 2004 as Measure L. Voters would consider the bond measure in 2018 or later.

A board vote on the proposal is scheduled for September 15, 2015. See the staff report: Request to Authorize the Creation and Funding of a “Facilities Master Planning Project” and to Authorize Contract Negotiations for Architectural Services to Develop the Campus & Facilities Master Planning Services

While this scheme sounds like an easy way to get money to hire an architectural firm to develop a plan for future bond measures, it appears to violate 15-year-old state laws (Proposition 39 and Assembly Bill 1908) that impose extra protections on bond measures that win voter approval at a 55 percent threshold.

Considering that the California State Controller and multiple county grand juries have criticized the district for inappropriate or questionable expenditures of bond proceeds authorized by Measure L, the district’s continued practice of using funds for expenditures that are ambiguously legal (at best) may compromise the willingness of voters to approve another bond measure for the district. Has the district taken into consideration the risk of negative public response to this proposed bond expenditure?

In 2016, California voters are likely to decide on a $9 billion statewide school construction bond measure and perhaps 150 or more local school and college construction bond measures. Would this expenditure add to the growing list of abuses of California school construction bond measures and thus contribute to jeopardizing passage of additional bond measures in 2016?


From: Kevin Dayton
Subject: To trustees, administrators, bond oversight committee for San Joaquin-Delta Community College District: Item 9J on 9/15 board meeting agenda may not be legal
Date: September 14, 2015 at 1:41:43 PM PDT
To: xxxx
Cc: xxx

Dear Board of Trustees, administrators, and Measure L Citizens Bond Oversight Committee for the San Joaquin-Delta Community College District:

At its September 15, 2015 meeting, the board will consider Item #9J, a proposal to spend $500,000 of bond proceeds from Measure L (approved by voters on March 2, 2004) for a newly-created “project” to develop a Facilities Master Plan. This plan will prepare the district for a bond measure to bring before voters in 2018 or later. Here is the item:

A. Authorize the creation of a new bond project entitled “Facilities Master Planning (FMP) Project” using Measure L Bond funds with an initial budget of $500,000 from bond program contingency.
B. Authorize negotiations with the top-ranked qualified architectural firm Gensler/LDA to provide the services to develop the campus and facilities master planning and possibly other capital planning and design services, per the Request for Qualification (RFQ) LA-RFQ-51.
C. Authorize the Superintendent/President or authorized designee to execute the final agreement following successful negotiations.
D. Qualify the other two (2) firms that were interviewed to provide services for the District for projects as needed.

Note that Article 13A, Section 1 of the California Constitution restricts how a community college district can spend borrowed money obtained through bond sales authorized through ballot measures approved by 55% of the voters under the criteria of Proposition 39 (2000). Bond proceeds can be used for “construction, reconstruction, rehabilitation, or replacement of school facilities, including the furnishing and equipping of school facilities, or the acquisition or lease of real property for school facilities.” And voters must be provided with a list of the specific school facilities projects to be funded by the bond measure.

Some questions you need to consider before approving the $500,000 in Measure L funds to be spent on creating a Facilities Master Plan for a future bond measure:

1. A list of specific intended projects to be funded by Measure L was provided to voters in the ballot information for the March 2, 2004 election. In this list of Measure L projects, which project describes the development of a Facilities Master Plan for another bond measure?

2. Is development of a Facilities Master Plan a legitimate “project” that can be funded by bond proceeds authorized by voters under the criteria of Proposition 39?

3. Is it reasonable to assume that voters who approved Measure L expected that the bond proceeds would be used to develop a Facilities Master Plan for another bond measure?

4. Is it fiscally responsible to borrow money from investors and pay them back over many years – with interest – to pay for development of a Facilities Master Plan for another bond measure?

5. Does the use of Measure L funds to develop a Facilities Master Plan for a future bond measure remain justified even if voters end up rejecting the bond measure(s) meant to fund the projects in that Facilities Master Plan?

6. What are the terms of maturity and interest rates for all of the bonds that provide the $500,000 in funding for this contract?

7. What is the total cost of developing the Facilities Master Plan if the district includes the interest that must be paid on the $500,000 in bond proceeds?

8. Has the district consulted with its Citizens Bond Oversight Committee for an assessment of whether this proposed specific expenditure of Measure L bonds complies with Proposition 39 and complies with what was presented to voters as Measure L in 2004?

Regardless of whether the San Joaquin-Delta Community College District is justified in seeking voter approval to borrow more money for construction, the district needs to follow the law when it spends borrowed money authorized by a previous bond measure. This proposal on the board’s September 15, 2015 meeting agenda is possibly illegal and needs thoughtful consideration.

Kevin Dayton
President and CEO
Labor Issues Solutions, LLC

News Coverage: California Voters Must Be Wary of More Borrowing Via Bond Sales for School and Community College Construction

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In July 2015, the California Policy Center released a 361-page report For the Kids: California Voters Must Become Wary of Borrowing Billions More from Wealthy Investors for Educational Construction. (Links to individual sections are below.)

For the Kids - California Voters Must Become Wary of Borrowing Billions More from Wealthy Investors for Educational ConstructionAs of August 26, 2015, the report has received the following news media coverage:

Six California School Districts Will Ask Voters on November 3 to Borrow $1.2 Billion From Bond Investors – commentary by Kevin Dayton – Flash Report – August 17, 2015

Unions Seek Control of Recent California School Bond Measures – commentary by Kevin Dayton – Union Watch – August 11, 2015

School Bonds May Equal Taxpayer BondageVictorville Daily Press – August 8, 2015

California Schools Stick Taxpayers with $149 Billion in Bond Debt – Breitbart News – August 5, 2015

California is in Huge Debt Hole Because of School Bonds – KFBK News Radio 1530 AM/93.1 FM in Sacramento – August 4, 2015

“For the Kids” Borrowing Will Saddle Kids with Debt – opinion piece by Gloria Romero in Orange County Register – August 4, 2015

Tough Education Reform, not More Borrowing and Spending, is What Students Need – commentary by Ed Ring – Union Watch – August 4, 2015

Specter of School Bonds Is Haunting Californians – opinion piece by Ed Ring in Sacramento Bee – August 2, 2015

Statewide Report Criticizes Passage of School Bonds – lead story in California League of Bond Oversight Committees Review – July 29, 2015

Doing the Math, Bond Debt for California Schools May Not Pencil OutModesto Bee – July 28, 2015

First look: Poll finds support for testing — Pell grants for prisoners — Washington state chief: Put more dollars into education – Politico (Morning Education) – July 28, 2015

School Bond Proposal Stirs California DebateThe Bond Buyer – July 27, 2015

Report: Voters Better Start Learning How Construction Bonds WorkLA School Report – July 27, 2015

Deceptive Ballot Language for Solano College Bond Measure Not Unusual – opinion piece by Kevin Dayton in Vacaville Reporter – July 25, 2015

Statewide Report Criticizes Passage of School BondsFresno Bee – July 24, 2015 (reprinted as Report Criticizes Passage of School Bonds in California in Education Week – July 27, 2015)

Here are links to each section of the report:

###

Revised: A Timeline of Activity Concerning What Will Be $9.95 Billion Borrowed through Proposition 1A Bond Sales for California High-Speed Rail

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UPDATE – April 13, 2014: I’ve added information at the bottom of the chart below based on two additional Official Statements issued by the State of California since I wrote the original article.

“Long-Term Bonds Outstanding” for California High-Speed Rail Prop 1A remained at $703,530,000 as of September 1, 2013 but dropped (for the first time) to $623,705,000 as of February 1, 2014.

I presume some of the money borrowed by the State of California through these bond issues is being used to fund the “connectivity projects” authorized for $950 million in a part of Proposition 1A (now California Streets and Highways Code Section 2704.095):

2704.095. (a) (1) Net proceeds received from the sale of nine hundred fifty
million dollars ($950,000,000) principal amount of bonds authorized by this
chapter shall be allocated to eligible recipients for capital improvements to
intercity and commuter rail lines and urban rail systems that provide direct
connectivity to the high-speed train system and its facilities, or that are part of
the construction of the high-speed train system as that system is described in
subdivision (b) of Section 2704.04, or that provide capacity enhancements and
safety improvements. Funds under this section shall be available upon
appropriation by the Legislature in the annual Budget Act for the eligible
purposes described in subdivision (d).

SB 1029 (enacted in July 2012) appropriated $819,333,000 for state, regional, and local agencies other than the California High-Speed Rail Authority to help fund connectivity projects. (Note: this does not include the $1,100,000,000 appropriated for “bookend” projects, which includes $600,000 to electrify and update the Caltrain rail system and $500,000 to upgrade unspecified rail systems under a Southern California Memorandum of Understanding with the California High-Speed Rail Authority.)

Some questions to which I don’t know the answers:

  1. Why did the amount for “Long-Term Bonds Outstanding” go down between September 1, 2013 and February 1, 2014?
  2. How was the California State Treasurer able to issue bonds under Proposition 1A before the state legislature appropriated money in July 2012?
  3. Have any of the proceeds from Prop 1A bonds been spent on “bookend projects?” What happens if some of the $1.1 billion appropriated for “bookend” projects is spent but doesn’t become part of the California High-Speed Train System in the end? Will that money be transformed into connectivity funding?

Are the $1,274,000,000 in appropriations listed below for “Connectivity?” Or are they for “Bookends?” (Only $950,000,000 Can Be Spent Outside of High-Speed Train Service)

$706,000,000 Peninsula Corridor Joint Powers Board (Caltrain) – Electrification Installation of an electric rail system that phases out diesel trains and blends the Caltrain system with the high-speed rail line. With matching funds, total spending is $1.456 billion.
$42,000,000 Peninsula Corridor Joint Powers Board (Caltrain) – Advanced Signaling System: Communications Based Overlay Signal System (CBOSS) Positive Train Control (PTC) Project Design, installation, testing, training and warranty for an intelligent network of signals, sensors, train tracking technology, computers, etc. on the Caltrain Corridor to meet mandated federal guidelines. With funds from BART and the Santa Clara Valley Transportation Authority, total spending is $231 million. This work began in September 2013.
$26,000,000 Santa Clara Valley Transportation Authority (Caltrain) – Advanced Signaling System: Communications Based Overlay Signal System (CBOSS) Positive Train Control (PTC) Project Design, installation, testing, training and warranty for an intelligent network of signals, sensors, train tracking technology, computers, etc. on the Caltrain Corridor to meet mandated federal guidelines.
$500,000,000 Southern California Memorandum of Understanding Regional rail projects that improve local networks and facilitate high-speed rail travel to Southern California. Projects will be selected by local transit agencies, in conjunction with the High-Speed Rail Authority, and state funding will be matched by additional investments to make the total investment in these projects $1 billion.

Original Post – May 13, 2013: It seems that 99.999% of Californians are unaware of how, when, and how much the State of California has borrowed for California High-Speed Rail by selling bonds to investors. My requests at two board meetings of the California High-Speed Rail Authority to be open and transparent about the details of the bond sales – even to the point of having an agenda item at each meeting dedicated to the topic – have been ignored, of course. Their strategy is to keep the public and the news media uninformed, probably because the details are not comforting.

It appears the California State Treasurer has sold about $700 million worth of Proposition 1A bonds to date. While early bond sales for California High-Speed Rail appear to be segregated from bond sales for other purposes, recent sales suggest that California State Treasurer Bill Lockyer was correct when he said the high-speed rail bonds were “mixed together” with bonds for other purposes. That was his response to my questions at the California League of Bond Oversight Committees annual conference on May 10, 2013. Someone in the bond industry told me this mixing was “unusual,” but perhaps we’re misunderstanding what’s going on.

People have asked me how the state was able to sell California High-Speed Rail bonds before the legislature and governor first authorized the sale of bonds in July 2012. I do not know.

I have not been able to figure out how much in interest has been paid so far, where the money was obtained to pay the interest so far (perhaps appropriations for the California High-Speed Rail Authority from the General Fund?), and the current debt service on the bonds.

Basically, we’re all ignorant peons left in the dark by the forces that control everything.

Here’s a preliminary timeline of activity concerning bond sales for California High-Speed Rail, with links to source documents. It’s nothing great, but it’s a step in the right direction for people to fill in the blanks and try to figure out what’s going on. If you see a mistake or know something to be added to it, please let me know.

Amount Borrowed Through Bond Sales (Principal, Does Not Include Interest) Date and Action Link to Source Documents
$0 August 26, 2008 – Governor Schwarzenegger signs into law Assembly Bill 3034, which puts the “Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century” (Proposition 1A) on the November 4, 2008 California ballot. According to the bill, the state would borrow $9.95 billion through bond sales in order to “encourage the federal government and the private sector to make a significant contribution toward the construction of the high-speed train system.” Borrowed money would be available for the California High-Speed Rail Authority to spend under specified conditions and criteria for planning, land acquisition, design, engineering, and construction. The California High-Speed Rail Authority would be required to pursue and obtain other private and public funds, including, but not limited to, federal funds, funds from revenue bonds, and local funds. The California State Treasurer would sell the bonds as authorized by an appointed California High-Speed Passenger Train Finance Committee under terms and conditions specified in committee resolutions. Bonds could have a maturity period as long as 40 years. The committee would consider program funding needs, revenue projections, financial market conditions, and other necessary factors in determining the term for the bonds to be issued. Each year, the state would collect taxes and fees for the General Fund that would pay principal and interest to bond investors. In addition, the board of the California High-Speed Rail Authority could request a loan from the Pooled Money Investment Board to make a loan against the amount of authorized but unsold bonds. Assembly Bill 3034 – Proposition 1A
$0 November 4, 2008 – 52.7% of California voters (including 78.4% of San Francisco voters) approve Proposition 1A. November 2008 Election Results
$0 January 16, 2009 – the High-Speed Passenger Train Finance Committee approves Resolution I under the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the principal amount not to exceed $32,010,000. The committee also approved Resolution II under the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, authorizing the issuance of State of California High-Speed Passenger Train Refunding Bonds in the aggregate principal amount outstanding not to exceed $32,010,000. January 16, 2009 Minutes – Resolution I – Resolution II
$0 February 1, 2009 – Long Term Bonds Outstanding State Public Works 2009
$0 April 6, 2009 – “The High Speed Rail Authority had been financed via a commercial paper issue.” April 6, 2009 Minutes
>$0< April 15, 2009 – the High-Speed Passenger Train Finance Committee approves Resolution III under the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, (i) amending the provisions of Resolution I authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the principal amount not to exceed $32,010,000, and (ii) authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the principal amount not to exceed (a) the principal amount unissued under Resolution I of $32,010,000 and (b) an additional principal amount not to exceed $448,790,000, for a total principal amount not to exceed $480,800,000. The Committee also approves Resolution IV under the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, authorizing the issuance of State of California High-Speed Passenger Train Refunding Bonds in the aggregate principal amount outstanding not to exceed $480,800,000. April 15, 2009 Minutes – Resolution III – Resolution IV
$90,045,000 April 22, 2009 – the California State Treasurer sells $90,045,000 of Safe Reliable High Speed Passenger Train 21st Century Series A Build America Bonds, Federally Taxable.CDIAC Number: 2009-0940 Standard & Poor’s Rating: A Moody’s Rating: A2 Fitch Rating: A –Term: 30 years Rate: VAR%

At the August 6, 2009 board meeting, the Authority executive director noted that this money was a piece of a $4-5 billion state bond sale and would be used by the Authority in FY 2009-10.

2009 Annual Report
$90,045,000 July 1, 2009 – Long Term Bonds Outstanding 2009 Treasurer Publication
$90,045,000 August 1, 2009 – Long Term Bonds Outstanding Official Statement
$90,045,000 October 1, 2009 – Long Term Bonds Outstanding Official Statement
$258,395,000 October 8, 2009 – the California State Treasurer sells $168,350,000 of Safe Reliable High Speed Passenger Train 21st Century Series B Build America Bonds, Federally Taxable. CDIAC Number: 2009-1481 Standard & Poor’s Rating: A Moody’s Rating: Baa1 Fitch Rating: BBB Term: 30 years Rate: 6.933% 2009 Annual Report
$258,395,000 January 20, 2010 – the High-Speed Passenger Train Finance Committee amends Resolution III with resolution V and Resolution IV with Resolution VI. These two resolutions reflect changes to the General Obligation Bond Law that became effective January 1, 2010, and other technical amendments. January 20, 2010 Minutes – Resolution V – Resolution VI
$258,395,000 February 1, 2010 – Long Term Bonds Outstanding Official Statement
$258,395,000 June 30, 2010 – Long Term Bonds Outstanding Official Statement
$258,395,000 October 1, 2010 – Long Term Bonds Outstanding >Official Statement
$309,060,000 November 19, 2010 – the California State Treasurer sells $50,665,000 of Safe Reliable High Speed Passenger Train 21st Century Series C, Federally Taxable.CDIAC Number: 2010-1714Standard & Poor’s Rating: A-Moody’s Rating: A1Fitch Rating: A –Term: 30 yearsRate: 7.438% 2010 Annual Report
$410,050,000 November 22, 2010 – the California State Treasurer sells $100,990,000 of Safe Reliable High Speed Passenger Train 21st Century Series D. CDIAC Number: 2009-1695Standard & Poor’s Rating: A-Moody’s Rating: A1Fitch Rating: A-Term: 30 yearsRate: 5.133% Official Statement – see earlier Official Statement
$410,050,000 June 30, 2011 – Long Term Bonds Outstanding 2011 Annual Report
$410,050,000 September 21, 2011 – High-Speed Passenger Train Finance Committee approves Resolution VII, which amends Resolution III authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the principal amount not to exceed $480,800,000, and (ii) authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the principal amount not to exceed (a) the principal amount unissued under Resolution III of $70,750,000 and (b) an additional principal amount not to exceed $59,250,000, for a total principal amount not to exceed $130,000,000. The Committee also approves Resolution VIII under the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, authorizing the issuance of State of California High-Speed Passenger Train Refunding Bonds in the aggregate principal amount outstanding not to exceed $540,050,000. September 21, 2011 Minutes – Resolution VII – Resolution VIII
$410,050,000 August 1, 2011 – Long Term Bonds Outstanding Official Statement
$499,285,000 October 25, 2011 – the California State Treasurer to sell $91,225,000 of Safe Reliable High Speed Passenger Train 21st Century bonds as Series E. Official Statement
$499,285,000 November 1, 2011 – Treasurer Lockyer Comments on Revised High-Speed Rail Business Plan. November 1, 2011 Press Release
$499,285,000 January 1, 2012 – Long Term Bonds Outstanding Official Statement
$499,285,000 February 1, 2012 – Long Term Bonds Outstanding Official Statement
$499,285,000 June 30, 2012 – Long Term Bonds Outstanding 2012 Annual Report
$499,285,000 July 18, 2013 – As required under Proposition 1A, Governor Jerry Brown signs into law Senate Bill 1029, which appropriates $2,609,076,000 in Proposition 1A funds plus $3,240,676,000 in federal funds for the first operating segment of the High-Speed Rail between Madera and Bakersfield, $1,100,000,000 for “Bookend” funding, $106,000,000 to CalTrans for capital improvement projects to intercity and commuter rail lines and urban rail systems that provide direct connectivity, and an appropriation of $713,333,000 for “Connectivity” funding. Senate Bill 1029 (2012)
$499,285,000 February 1, 2013 – Long Term Bonds Outstanding Official Statement
$499,285,000 March 18, 2013 – California High-Speed Rail Authority approves Resolutions #13-03 and #13-04 requesting the California High-Speed Passenger Train Finance Committee to authorize the sale of $8,599,715,000 in bonds. Resolution #13-03 – Resolution #13-04
$499,285,000 March 18, 2013 – the High-Speed Passenger Train Finance Committee approves Resolution IX and Resolution X to authorize sale of $8,599,715,000 in bonds. Resolution X
$499,285,000 March 29, 2013 – the High-Speed Passenger Train Finance Committee previously adopted Resolution III authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the Principal Amount Not to Exceed $480,800,000 (“Resolution III”) and Resolution VII authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the Principal Amount Not to Exceed $130,000,000 (“Resolution VII”). As of March 29, 2013, the State had issued $100,990,000 State of California High-Speed Passenger Train Bonds, Series D, currently outstanding in the principal amount of $99,000,000 (the “Resolution III Bonds”) pursuant to Resolution III. $38,775,000 remains in principal amount of bonds or commercial paper notes under Resolution VII, and the Committee now desires to authorize the issuance of bonds to refund any bonds issued from time to time under Resolution VII (the “Resolution VII Bonds”). Resolution XI
$538,060,000 April 11, 2013 – the California State Treasurer to sell $38,775,000 of Safe Reliable High Speed Passenger Train 21st Century bonds as Series F. Official Statement
$703,530,000 April 11, 2013 – the California State Treasurer to sell $165,470,000 of Safe Reliable High Speed Passenger Train 21st Century bonds as Series G. Official Statement
$703,530,000 September 1, 2013 – Long Term Bonds Outstanding Official Statement
$623,705,000 February 1, 2014 – Long Term Bonds Outstanding Official Statement

After Seven Years, California High-Speed Rail Still Lacks Comprehensive and Credible Plan for Financing System

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The California State Senate Transportation and Housing Committee held an informational hearing on March 27, 2014 entitled “Toward a World-Class Passenger Rail System in California:  Evaluating High-Speed Rail’s Potential for Success.” (See agendabackground information, a report from the California Legislative Analyst’s Office, and the video of the hearing.)

Of greatest concern to committee chairman Mark DeSaulnier (D-Concord) was the lack of a comprehensive and credible plan for financing the system in the California High-Speed Rail Authority Draft 2014 Business Plan.

Some things never change!

I have saved this old email from Governor Arnold Schwarzenegger’s office forwarding an opinion piece published in the May 4, 2007 Fresno Bee. In it, he claims to support High-Speed Rail but doesn’t want to provide significant money for it in the 2007-08 state budget because “there is still no comprehensive and credible plan for financing the system.” He compares the speculative nature of funding sources for High-Speed Rail with the well-outlined plan for complete funding of projects authorized in a proposed water bond – a ballot measure that has never come before California voters.

See the phrases highlighted in bold font below.


From: governorsofficeofexternalaffairs@gov.ca.gov

Date: Fri, 4 May 2007 08:57:45

Subject: Must Build High-Speed Rail

 

Fresno Bee: State Must Build High-Speed Rail

Governor Arnold Schwarzenegger

As the recent Bay Area freeway collapse illustrated — and as a recent Bee editorial correctly pointed out — Californians need and deserve a diverse array of transportation options. I absolutely believe high-speed rail should be one of those alternatives.

A network of high-speed rail lines connecting cities throughout California would be a tremendous benefit to our state.

Not only would its construction bring economic development and the creation of hundreds of thousands of new jobs, but once completed, we would also see improvements to our air quality, reductions in greenhouse gas emissions, congestion relief on our highways and greater mobility for people living in the Valley and other areas of our state currently underserved by other forms of transportation.

Yet it’s been more than 10 years, and the state has already spent more than $40 million in initial planning for the rail line. But there is still no comprehensive and credible plan for financing the system so we can get construction under way.

The High-Speed Rail Authority, the commission in charge of developing a plan for high speed rail in California, estimates the cost of building the system to be more than $40 billion.

Yet so far, the only financing party identified with specificity is the state, which the Authority proposes float a $9.95 billion bond. The remaining 75% of the project cost, or more than $30 billion, has yet to be identified with any specificity or confidence.

Before asking taxpayers to approve spending nearly $10 billion plus interest, it is reasonable to expect the authority and its advisers to identify with confidence where we will find the remaining $30 billion.

A perfect example of what I’m talking about is my $5.9 billion water infrastructure package. By using a public-private partnership approach, we’ve identified a plan that lays out exactly how we are going to pay for every piece of the proposal, from the reservoirs to the groundwater storage to fixing the Delta to our conservation efforts.

For the reservoir portion, the estimated building cost is $4 billion. We’ve proposed $2 billion in general obligation bonds for the public portion and $2 billion in lease revenue bonds to be paid for by the water users themselves, i.e. water agencies, irrigation districts, cities, etc. And to ensure that this funding materializes, we are requiring that contracts be in place to pay for the lease revenue bonds before public dollars are spent on the projects.

Identifying the exact funding sources for large transportation projects is more problematic, which is why we need the authority to come up with a well-thought out financing proposal before moving forward.

I want to commend the authority for its great progress so far in completing the necessary environmental studies and identifying future rights-of-way that we would need to acquire.

Yet even the authority’s executive director, Mehdi Morshed, says the longer the state waits to build a high-speed rail network, the more expensive it will get. I could not agree more.

That’s why I have directed my recent appointees to work with the authority and its financial advisers to develop a comprehensive plan for financing the project in its entirety, so we can make high-speed rail a reality in California once and for all.

Last year, my administration increased funds for the authority to continue its work, and this year, my budget proposes additional funding.

I am willing to explore multiple approaches in order to fund the balance and execute this project — whether through federal grants, local participation, vendor support, co-development opportunities, public-private partnerships or any other realistic financing plans in which the authority expresses confidence.

I look forward to working with the authority and reviewing its proposal as soon as possible.

But let me be clear: I strongly support high-speed rail for California, and especially for the San Joaquin Valley. Increasing the Valley’s transportation options, especially after voters passed Proposition 1B to repair Highway 99, would better serve the region’s growing population and enhance the Valley’s critical importance to our state’s economy.

The promise of high-speed rail is incredible. Looking forward to the kind of California we want to build 20 and 30 years from now, a network of ultra-fast rail lines whisking people from one end of the state to the other is a viable and important transportation alternative and would be a great benefit to us all.

With a responsible plan in place, we can feel secure in delivering high-speed rail and bringing greater opportunity — and a brighter future — to all Californians.

###

Background

Governor Schwarzenegger had initially included only $1.2 million in his original proposed 2007-08 state budget to keep the California High-Speed Rail Authority operating. (The California High-Speed Rail Authority reportedly had requested $103 million.) The Los Angeles Times reported in the April 29, 2007 article State Puts Brakes on Bullet Train Plan that “Schwarzenegger’s budget would reduce the authority to an office with no more than six full-time employees — without the 75 consulting firms with 300 employees it has now. Outside contracts would need to be canceled, route planning put on hold and environmental and engineering work frozen.” He also proposed again postponing the 2008 ballot measure to authorize bond sales.

Environmental and transit groups criticized this. They claimed he was betraying a commitment to reduce greenhouse gas emissions through Assembly Bill 32, the Global Warming Solutions Act of 2006 that he signed into law.

In the end, the budget signed by the Governor included $1,159,000 for support of the High-Speed Rail Authority.

Another Tax Reform Group Backed by Unions: Don’t Be Fooled

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Perhaps the description “venerable” would be appropriate for a group called the California Tax Reform Association, which has been involved for almost 40 years in various campaigns to increase income taxes on “the rich” and corporate entities. (See Coalition Seeks to Eliminate Tax Breaks for Rich, CorporationsLos Angeles Times – November 21, 1991.) In recent years, the California Tax Reform Association made a public appearance when its executive director signed a support argument for Proposition 24, an unsuccessful ballot measure in November 2010 to “close corporate loopholes.”

On January 29, 2014, the Los Angeles Times ran a column by George Skelton (Lack of Leadership a Big Obstacle in Updating Prop 13) about proposed changes to Proposition 13 that would result in higher tax assessments against commercial property owners. It cited the executive director of the California Tax Reform Association, but did not indicate the agenda or backers of this organization for readers.

George Skelton began writing for the Los Angeles Times in 1974 and the California Tax Reform Association was founded in 1976, so perhaps it was assumed that everyone knew about this group and its historical influence. One might feel a little melancholy to see how the California Tax Reform Association has not kept up with changing times: it hasn’t posted on its web site since May 2012 and it does not appear to use social media.

My article Taxpayer Group Pushing to Gut California’s Prop. 13 is Union Front Group, posted on February 4, 2013 in www.UnionWatch.org, reveals the funding sources and leadership of this organization. It’s a front for public employee unions.

Five Winning Issues for a Republican Candidate for California State Treasurer – My Article in www.FlashReport.org

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San Francisco Chronicle columnist Debra Saunders began her January 15, 2014 column “Who Wants to Lose to Gov. Jerry Brown?” with the following observation:

How near death is the California Republican Party? It’s this bad. Democrats hold every statewide office. Term limits have opened up a few offices; still, no serious Republican plans to run for attorney general, lieutenant governor, treasurer or controller this year. If the lead Democrat for any of those offices dies in September, there will be no Republican in the race to win in November.

Saunders identified two Republicans “fighting over the honor of losing to Gov. Jerry Brown,” (Tim Donnelly and Abel Maldonado, who dropped out two days later), a state senator running for Insurance Commissioner (Ted Gaines), and a public policy institute director running for Secretary of State (Pete Peterson). She also pointed out the lack of Republican candidates to challenge the weak Democrat incumbents for Lieutenant Governor and Attorney General and to run for the open seats for Controller and Treasurer.

This column inspired me to write a commentary posted on www.FlashReport.org today (January 20, 2014): “It’s Winnable! Conditions Are Ripe for a Republican to Get Elected in 2014 as California State Treasurer.” I provide five issues “for a libertarian populist-style Republican who can credibly argue to The People against crony capitalism and build a majority coalition of support from voters on the Left and Right.”

Are you such a potential candidate?

Proposed New Sacramento Kings Arena: Another California Infrastructure Project Burdened by Visions to Change the World

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California can’t build a bullet train to transport people in two hours and forty minutes from San Francisco to Los Angeles. That’s too mundane. Instead, California High-Speed Rail is burdened with revitalizing Central Valley cities, employing the homeless, saving the planet from global warming, creating jobs, ending poverty, planting trees, transforming society, etc.

It’s not surprising that the California High-Speed Rail project is about to wither away after five years of visionary leftist nonsense. The project became too much for too many.

As the hyperbole rises to the absurd about the proposed new Sacramento Kings basketball arena, I’m predicting this “Entertainment and Sports Center” will suffer the same fate. See my December 16, 2013 article in www.FlashReport.org entitled Regional Sports and Entertainment Facilities in the Urban Core Attract Costly Political Meddling: Sacramento Kings as a Case Study.