Saturday, April 14, 2012

Illegal Water Tax Not Quite Dead

Ending the illegal 10% water tax is only part of the solution

It shouldn't come as a surprise to anyone that the end of Fullerton's decades-old water tax will not mean the end of Fullerton's financial woes.

As far as anyone can remember only a handful of Fullerton employees fill out time sheets and account for their time spent on specific tasks or projects.

This was the case in 1970 when the City Council voted to tax the Water Fund 10% of the gross water sales.  The blanket application of a percentage-based tax instead of the actual specific costs for service is indicative of poor management from people who had no idea just how much time and effort their employees spent working on water projects and tasks.

The City Manager has placed the elimination of the water tax on Tuesday's City Council agenda citing legal reasons, not economic reasons.  He has very few economic reasons to support any tax because he has no proof of the time and effort spent by employees working on the system except for certain water system employees and engineering employees.

That being the case, how did the City and their consultant, Municipal & Financial Services Group, produce this chart?


Somehow city staff and the consultant concluded these figures and presented them to the Water Rate Study Ad Hoc Committee as facts for consideration when determining just how much water rates should be increased.

If we take a leap of faith that these numbers are remotely accurate, then there are no other costs.  Therefor, any newly discovered "costs" are truly fabricated from thin air.

And then there is yet another problem.

Tuesday's City Council agenda contains a resolution which will, in essence, stop the water tax for May and June of 2012 and from then on.  However, the 1970 resolution states that the 10% tax will be applied at the conclusion of the fiscal year.  In other words, NO MONEY SHALL BE TRANSFERRED until June 30.  Somehow, the City Manager has taken it upon himself to transfer funds BEFORE June 30.  That's illegal.

Read the resolution for yourself, in particular the last paragraph:

Also, the agenda includes a rate hike to cover the "pass-through" increases from Metropolitan Water District and the Orange County Water District.  The problem I have is that MWD will not be raising rates on Fullerton until January while the rate hike to you and I goes into affect on July 1.  

The bottom line is that you, the ratepayer, must attend the City Council meeting on April 17, 2012 at 6:30PM (303 W. Commonwealth Ave.) and speak out on the continued gross financial mismanagement.

Friday, April 13, 2012

Why can't the City of Fullerton track labor for the Water Fund (or anything else)?

After listening to the City Manager and various department managers discussing their budget woes at the City's Budget Workshop on Tuesday night it occurred to me to ask a basic question.

Having worked for a few different employers over the years one learns that employee time sheets are an important tool for allocating labor costs and client billing.  "If you cannot measure it," says professor Barry McCarthy "you cannot manage it."

Something I heard, I can't recall just what specifically, caused me to rise out of my seat and approach the dead microphone.  The question was so simple I thought I might be asking a "stupid" question.

My question: "Do employees bill their time to specific projects or funds?"


The answer: "No."

A short time later, Director of Engineering Don Hoppe told me his Engineering Department does track time based on the engineering project.  So, while nearly all of City Hall fails to track employee time, a fundamental principle of management, Don Hoppe's engineering team gets an "A".

If the City were anything like a business, it would have failed decades ago.  But they can simply raise taxes (fees) and continue their charade until someone notices.  Like when water rates skyrocket.

Several managers that I spoke with after the Budget Workshop said they wanted to know how much time their employees are spending on specific projects and tasks but that the current (and new) accounting system just isn't set up for that type of data input.

Of all of the jobs I have ever had, in the public sector and private sector, only two employers did not have employees fill out time sheets and list what work they did.  Both companies went out of business years ago.

The City's inability to account for labor and, therefor actual costs, is at the heart of the issue.  It also blows a titanic hole in labor  arguments about efficiency and effectiveness of employees.

And so City Hall, when faced with running out of money, looks to the taxpayers for the bailout.  Its time to end taxpayer funded bailouts and require employees to track their time based on project funding - just like that which the City requires of their own consultants and contractors.

Wednesday, April 11, 2012

How much overhead gets billed to the Water Fund?


Looking further into "costs" of service for our water, how many different ways is administrative overhead charged to the Water Fund?  This pie chart shows several.

  1. "Administrative Services" (8% direct allocation from water bill)
  2. "Other Expenses" (2% direct allocation from water bill to pay Community Development Department, Human Resources Department, Parks & Rec Department, the City Council, and the City Manager)
  3. "Franchise Fee" (11% direct allocation from water bill to pay for the Finance department, City Administrator, City Attorney, and the City Clerk for their respective DIRECT SERVICES to the Municipal Utilities Department- see Resolution 5184 below) 
Resolution 5184, 1970

Good grief!  That's 21% of the Water Fund or $4,746,000.  If that number sounds familiar, it should.  That's the same amount being allocated to the Maintenance Services Department which are probably direct costs and not bloated overhead.

No wonder City Hall doesn't want the Water Fund audited!

The bottom line here is that everyone it seems has their hand in the Water Fund.  Adding additional taxes to current or future water rates is unacceptable and will not solve City Hall's spending problem.  

Tuesday, April 10, 2012

The Trench Tax

One of the attempted, and thus far rejected, justifications for a percentage-based franchise fee that was concocted by City staff was the Trench Tax.

The Trench Tax was created as a means to pay for the damage created by having wet utilities (water lines, sewers, etc.) buried in the street.

Keep in mind that the Trench Tax is part of the New & Improved Franchise Fee and does not include the cost of the Maintenance Services Department repairing the street each time their is a water leak or water line repair.

According to three licensed civil engineers that I have shown the transfer study to, trench settling occurs when the soil is not compacted appropriately.  Using the correct backfill material and compaction standards will create a base capable of supporting the road.  In lay terms, when done correctly, trench work does NOT accelerate deterioration of the street.  Also, when contractors want to dig in the street, a city inspector comes out to make sure that the street is constructed and restored correctly.  This is a double standard with no inspector verifying the City work.

Aside from the Trench Tax, Maintenance Services Department bills their time spent working on broken water lines to the City's General Fund, at least that is what Dave Schickling reported at the April 9, 2012 meeting.  I have found no evidence to support this claim but since there is no audit of the Water Fund, we cannot possibly know if money was paid to the General Fund to reimburse for the Maintenance Services Department's water-related work.  More importantly, this cannot be part of the Franchise Fee because that is suppose to cover certain administrative costs (which we were taxed twice for as well and is indicated in the pie chart - Franchise Fee vs. Other Expenses vs. Administrative Services).

And then there is this pesky but colorful pie chart which shows that the Maintenance Services Department accounted for 21% of the budgeted cost to maintain the Water System, or $4,746,000 in 2011.  

We are left contemplating just how many ways City staff will attempt to tax our water to fix the same piece of asphalt.  Here are at least two:
  1. Trench Tax (a.k.a New & Improved Franchise Fee, less rent-back)
  2. Allocation of Water Fund from water bill for Maintenance Services
But it gets worse.  How much bureaucratic overhead is paid for through your water bill and what does it actually cover?  Find out tomorrow.

Join NOCCC To Meet Your Local Candidates - TOMORROW

North Orange County Conservative Coalition 

Local elected officials go on to become our State and National leaders. The important decisions we make at the Ballot Box on June 5 and in November effect our daily lives and our future. 

REMINDER
Join NOCCC To Meet Your Local Candidates 
THURSDAY 


Please invite your neighbors, friends and familyand especially NEW VOTERS!

 

TOMORROW! Thursday, April 12, 2012
7:00 – 9:00 pm

Let's talk about how Orange County 
and the media will cover the elections 
          with special guest speaker and Master of Ceremony

Brian Calle        


Please join us as Brian introduces many of our invited local candidates running for office including 3rd District Orange County Board of Supervisors; Anaheim, Brea, FULLERTON, La Habra, Orange, Placentia, Yorba Linda City Council; School Board and Orange County Republican Party Central Committee.
Brian Calle is an Opinion Columnist for the Orange County Register and President of the Young Executives of America. He is also the Managing Director of Gambit Consulting Group, a Senior Fellow at the Claremont Institute, Editor of FreedomPolitics.com, a Distinguished Speaker in the Friedman Foundation School Choice Speaker's Bureau and a member of the Board of Governors for the University of Southern California.

**One hour from 8:00pm - 9:00pm will be set aside for
folks to meet and chat with candidates who wish to stay. 

       ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Foxfire Restaurant Conference Room, 5717 E. Santa Ana Canyon Road, Anaheim, 91 Freeway @ Imperial Highway 

Dessert & Coffee provided. $5 suggested donation to help cover costs.
Please RSVP to DesarĂ© deseric@sbcglobal.net or Karlakarladowning@aol.com
Why not dine at the Foxfire Restaurant before the meeting?
Separate reservations required through the restaurant.

Please visit our website www.nocconservatives.org
for news, events and updated election information.

Water Rate Study Ad Hoc Committee Calls On Council to Rescind Water Tax

Last night the Water Rate Study Ad Hoc Committee voted unanimously to recommend to the Fullerton city Council that the "in-lieu" franchise fee, or "water tax" as it has become known as, should be suspended indefinitely.

Another motion was made to recommend an audit of the Water Fund.  The motion failed 5-5.

Some members stated they had enough reports and felt spending more money would not provide any answers.  One member even said that no matter what is discovered in the audit, it would not be enough for some.

Others, like myself, feel it is a disservice to the public to not account for the misappropriated funds.  As we look to answer the question of how much was overcharged to ratepayers, we realize we cannot arrive at a fact-based answer.  Instead, the city's staff will have the Ad Hoc Committee look at what could or perhaps should be charged to the Water Fund.  That may be an appropriate step going forward but without an audit we will never know where our money went.

Water System Manager Dave Schickling offered up the City's Comprehensive Annual Financial Report as an audit that covered the Water Fund.  Unfortunately, the CAFR does not look at the Water Fund in any detail.  Instead, the accounting consultant was provided total dollars into and out of the Water Fund.  This may show that the Fund is operating in the black but does nothing to ensure that the transfers were legal or that the funds were used in support of water projects and system management.

I asked the Director of Engineering, Don Hoppe, and the Water System Manager, Dave Schickling, about how Maintenance Services bills their time to repair water leaks and the street that they dig up.  They said the time is all billed to the General Fund.  At the May 23, 2011 meeting the Water Rate Study showed that Maintenance Service accounted for 21% of the operations and maintenance of the water system.  This created some confusion, at least for me, because the Rate Study showed these maintenance costs as being part of the allocation from the Water Fund and not part of the franchise fee.  In the end, I am left to guess where at least $22.5-million was spent.

The chart below shows that Maintenance Services expenses accounted for 21% of the O&M expenses, "Other Expenses" as 2% (read the footnote on the chart to see what "other" refers to), and then the Franchise Charge at 11%.  According to the City, this chart represents all of the costs and expenses necessary to operate the Water System and consequently the Water Fund.

City Manager Joe Felz will be compiling what he believes to be a list a various "costs" to bring back before the Ad Hoc Committee.  The purpose would be for the Ad Hoc Committee to determine what "costs" are appropriately associated with and billed back to the Water Fund.

The Ad Hoc committee seemed somewhat unified in a desire to have only the actual costs billed to the Water Fund, but as we have seen, those "costs" are subject to staff interpretation.

Since last night's meeting, many members have expressed their concern over the way the entire Water Rate Study has been handled.

I think a large part of the problem has been the business-as-usual approach by staff to have a committee rubber stamp studies, reports, and recommendations all at the behest of city staff.

That's not to say the process yielded no results.  In fact, early in 2011 I made it my goal to end the water tax.  Last night, the first milestone was reached with the Ad Hoc Committee's recommendation.

As a final thought on water rates and the City's handling of this issue, I want to draw your attention to the City's Budget Study Session tomorrow.  The purpose of the meeting is for the City Manager and department managers to present their respective budgets.  This is where we find out how much of our money the City would like to spend and where they will spend it.  Even though the Ad Hoc Committee recommended that the City Council end the water tax completely, the City Manager, Joe Felz, intends to move the budget forward on the assumption that the General Fund will continue to receive a percentage of the Water Funds revenue.  So you see it is business as usual at the Fullerton City Hall.

Business as usual left us with an $8-million budget gap in the two-year budget for 2011/2012 and 2012/2013.    The proposed budget for 2012/2013 & 2013/2014 will have a $5-million deficit with the ending of the water tax and the official plan is to ignore it.

Monday, April 9, 2012

Water Rate Study Ad Hoc Committee Meeting Tonight

Water Rate Study Ad Hoc Committee meeting tonight
City Yard (1580 W. Commonwealth Ave.)
6:00PM 
Park in the gated employee parking lot


Please bring your neighbors and speak up.

Greg Sebourn

Orange County Bail Bonds

The Beauty of a Storm

The Beauty of a Storm
Orange County, Ca.

My Grandma - A Eulogy

LET'S TALK ABOUT 1914 FOR A MOMENT.



FOR STARTERS, GRANDMA WAS BORN TUESDAY, DECEMBER 22, 1914 IN HER FAMILY'S ATWOOD RANCH HOUSE.



IT IS WORTH NOTING THOSE ALSO BORN IN 1914:

JACK LALANNE

JOE DIMAGGIO

DANNY THOMAS



AND WHO DIED IN 1914:

JOHN MUIR, THE FAMOUS NATURALIST FOR WHICH NUMEROUS ROADS, PARKS, HOTELS, AND NATURE RESERVES ARE NAMED.



IT IS ALSO WORTH NOTING THAT IN 1914 WOODROW WILSON SIGNS MOTHER'S DAY PROCLAMATION AND BABE RUTH MAKES HIS MAJOR LEAGUE DEBUT WITH THE RED SOX. MOTHER'S DAY AND BASEBALL- TWO OF MY FAVORITES!! (PERHAPS HER NICKNAME "BABE" CAME FROM BABE RUTH???)



GRANDMA WAS BORN INTO A PERIOD OF TIME FILLED WITH TURMOIL. IN JUNE OF 1914 ARCHDUKE FRANZS FERDINAND WAS ASSASSINATED. WITHIN ONE MONTH WORLD WAR I RAGED ACROSS EUROPE. TWO DAYS AFTER HER BIRTH HOWEVER, GERMAN AND BRITISH TROOPS INTERRUPTED WWI TO CELEBRATE CHRISTMAS. (PERHAPS THEY PAUSE KNOWING THAT A GREAT WOMAN WAS BORNE) WORLD WAR I CONTINUED UNTIL THE TREATY OF VERSAILLES IN 1919.



ALTHOUGH SHE WAS ONLY 5 YEARS OLD, SHE SAW THE LEAGUE OF NATIONS CREATED AND THE 19TH AMENDMENT WAS APPROVED BY THE U.S. CONGRESS GUARANTEEING THE RIGHTS OF WOMEN TO VOTE.



SHE LIVED THROUGH MANY NOTABLE EVENTS. LIKE THE 1933 LONG BEACH EARTHQUAKE OR WHEN ATWOOD FLOODED ALONG WITH MOST OF ORANGE COUNTY IN 1938 AND THE FLOOD-WATERS CLAIMED MORE THAN 50 PEOPLE, 43 OF WHICH WERE FROM ATWOOD! ALL OF THIS DURING A TIME THAT WE READ ABOUT IN SCHOOL AND KNOWN AS "THE GREAT DEPRESSION". SOMEWHERE IN ALL OF THAT SHE FOUND THE LOVE OF HER LIFE, GRANDPA LEO, GRADUATED HIGH SCHOOL, GOT MARRIED, AND HAD KIDS!



THEN THERE WAS WORLD WAR II. FROM PEARL HARBOR TO HIROSHIMA, GRANDMA WAS RAISING MY UNCLE BOB AND MOM ARLINE. WITH AIR-RAID SIRENS AND BLACKOUTS SHE WAS A WIFE AND MOTHER. WHAT A TIME TO RAISE CHILDREN! I BET GRANDMA'S PARENTS WERE ABEL TO TELL HER A THING OR TWO ABOUT RAISING KIDS IN WARTIME.



GRANDMA WAS THERE WHEN THE BOY SCOUTS OF AMERICA HELD THEIR 3RD ANNUAL NATIONAL JAMBOREE IN 1953. SHE SAW AIRBASES OPEN IN '42 AND CLOSE IN '99. SHE WATCHED WALTER KNOTT START UP HIS BERRY FARM AND WALT DISNEY TURN ORANGE GROVES AND STRAWBERRY PATCHES INTO DISNEYLAND!



SHE SAW THE HORSE AND CARRIAGE FADE AWAY INTO HISTORY AND SPACE TRAVEL EXPLODE BEFORE HER WITH THE FIRST LUNAR LANDING. JUST IMAGINE HOW MUCH TECHNOLOGY HAS CHANGED OVER THE LAST 100 YEARS. FROM TUBE RECTIFIERS TO SUPERCONDUCTORS; FROM TRANS-ATLANTIC TELEGRAPH CABLES TO SATELLITE TV.



SHE SAW MORE IN HER 93 YEARS THAN MOST OF US WILL EVER READ ABOUT, LET ALONE LIVE THROUGH!



OF THOSE 93 YEARS IT IS MY HONOR TO HAVE BEEN HER GRANDSON FOR 35 OF THEM. SHE WAS MY MOTHER WHEN MOM HAD TO WORK. SHE WIPED MY NOSE AND PUT FOOD IN MY MOUTH. SHE LET ME PLAY WITH GRANDPA EVEN THOUGH SHE NEEDED HIM TO TAKE HER TO THE STORE. SHE WAS MY GRANDMA AND I WILL MISS HER IMMENSELY.



JUST LOOK AROUND THIS ROOM; SHE DID THIS. SHE IS RESPONSIBLE FOR BRINGING SO MANY GOOD PEOPLE INTO THIS WORLD AND TOGETHER TODAY. THIS IS HER LEGACY.



A Dedication To My Loving Wife, Stacey. Thank you for all you do for me!

Brad Paisley - I Thought I Loved You Then


I remember trying not to stare the night that I first met you
You had me mesmerized
3 weeks later in the front porch light taking 45 min to kiss you goodnight
I hadn’t told you yet but I thought I loved you then

Chorus
Now you’re my whole life now you’re my whole world
I just can’t believe the way I feel about you girl
Like a river meets the sea
Stronger than it’s ever been
We’ve come so far since that day
And I thought I loved you then.

I remember taking you back to right where I first met you
You were so surprised
There were people around
But I didn’t care I got down on one knee right there
And once again I thought I loved you then

Chorus
Now you’re my whole life now you’re my whole world
I just can’t believe the way I feel about you girl
Like a river meets the sea
Stronger than it’s ever been
We’ve come so far since that day
And I thought I loved you then.

I can just see you with a baby on the way
I can just see you when your hair is turning gray
What I can’t see is how I’m ever gonna love you more
But I’ve said that before.

Now you’re my whole life now you’re my whole world
I just can’t believe the way I feel about you girl
Well look back some day at this moment that we’re in
And I'll look at you and say I thought I loved you then
And I thought I loved you then...

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