I am hoping each of you experienced a very merry Christmas. This year, our local motorcycle community was challenged with overcoming the grief and sadness of having two prominent riding members, Anthony “Tony” Princotta, and on the next day, Cerestine “Tina” Viramontes, taking their last ride to heaven. Dealing with such tragedies brings us to the realization of how blessed we are to have another day to spend with family and friends. We are grateful to live in a community where organizations like Bridge to Home, Family Promise, Samuel Dixon Family Health Centers, and many others are there to help those in need. Plus, we also acknowledge our responsibility to keep our community on a “straight and narrow path,” so as to remain a great place to live.
With the future in mind and with the Lighting District issue “front and center” for a city council decision, it is important we realize this issue goes way beyond the purchase of street lights. This issue is a representation of how the City of Santa Clarita will communicate information regarding projects, in addition to how the city will handle charging for services from this point on.
With that in mind, I thought it would be appropriate to share some background information, and then review the timeline and council actions on the street light issue.
First and foremost, as a general-law city, Santa Clarita does not have the authority to initiate taxes. Instead, assessments are levied against property using a process defined in Proposition 218. Known as the “Right to Vote on Taxes Act,” this piece of legislation permits the City of Santa Clarita to raise revenue for projects and services which provide a “Special Benefit” to properties, provided they are established by a vote of the affected property owners. The most recent, large-scale example of using this methodology was when the city established the “Parkland and Open Space Preservation District.” During the campaign to establish this Assessment District, we were constantly assured by our city council that revenue collected by a 218 Assessment District cannot – and will not – be used for any purpose other than as defined in the proposal, and later reflected in the engineers report.
As concerned community members, we cannot allow Proposition 218 Assessment District revenue to be used for purposes outside of the District’s defined objective. We must not permit the management of separate assessments to be lumped together, so one assessments election can affect another assessment’s resources, projects, services and liabilities. Why? Because if we allow those things to go unchecked, there is no assurance district resources will not be used inappropriately and result in uncontrolled raises in our property tax bill.
In addition, Proposition 218 allows the City of Santa Clarita to include automatic cost escalators in Assessment District definitions. Currently, the city council and city staff favor using the Consumer Price Index to determine each year’s maximum assessment increase. But as concerned community members, we need to push back when a year’s assessment is raised by more than necessary to fund the district’s activities. When the “Parkland and Open Space Preservation District” was established, a “Financial Accountability and Audit Panel” was put in place. It may be time to do the same for the other Proposition 218 Districts, as well.
Last week, the city’s communication manager commented on my column. While I still take exception to several of her comments and the Frequently Asked Questions currently posted on the city website, I believe maintaining a healthy dialog is beneficial to us all. To that end, I took Ms. Lujan up on her offer, and gave her a call. We had a productive and friendly conversation, but since it was the end of the week, we lacked sufficient time to adequately address all our mutual concerns. I therefore decided to hold off my impression of the city’s comments for another week. In the meantime, so you may more fully understand the issue, let’s follow the timeline and the money by using information provided by city council staff reports.
The streetlight issue was placed before the community on May 23, 2017, Agenda Item 15, where staff advocated for the purchase of 16,125 streetlight poles from Southern California Edison at a projected cost of $9.6 million. The Staff Report continued by showing the cost of electricity being reduced by $8.85 per streetlight per month, if the purchase was consummated and the streetlights were converted to LEDs, at a cost of $5.6 Million. The estimated reduction in electricity cost was therefore $1.7 million per year. Adding in the cost of maintenance, the staff’s estimate of the yearly savings was reduced to $749,000 per year, or $22.5 million over 30 years.
All very interesting, except the dissertation ended with the statement, “Approval of the recommended action allows the city to enter into a Purchase and Sale agreement with SCE …. Staff will return …. with recommended financing options.” In plain English, the staff and council approved a purchase without knowing how they were going to pay for it.
“On September 27, 2017, the city (staff) sent out a Request for Proposal (RFP) identified as LMD 17-18-18 soliciting for Street Light transition services,” (LED Implementation), even though a funding source had not been named or approved.
On January 23, 2018, Agenda Item 11, the city council approved a contract with Tanko Lighting, not to exceed $4,444,513. It was to be funded by the Santa Clarita Lighting District fund 354, which is the LACO CLMD 1867 Lighting District supported by ad valorem (property tax) revenue. The staff report also stated, “All funds … will be returned to the Santa Clarita Light District Fund Balance upon issuance of permanent financing by the City Council.”
Then, on February 27, 2018, Agenda Item 6, the city council approved the use of “Revenue Bonds” of up to $17 million to finance the streetlight purchase and conversion to LEDs. “The total payment amount calculated to the final maturity of the bonds is estimated to be $25,630,052.” If you have been following the money, you can see the amount exceeds Mr. Tonoian’s May 23, 2017 savings estimate of $22.5 million, putting us in the hole by $3.1 million. Who gets to pay for these bonds? “The Bonds are secured from the installment payments. Pledged to the payment of the installment payments by the city are (1) assessments levied on Streetlight Zone A and Streetlight Zone B, and (2) the ad valorem revenues from Streetlight Maintenance District No. 2, formally County District CLMD 1867, which the city has ALWAYS included in its streetlighting budgets.” Let that sink in for a minute. You will not be saving, you will be paying more.
So why proceed if there is no savings? I suspect the answer is in the staff report where it says, “At Council’s discretion, the City may lease up to approximately 4,500 poles based on potential demand and location, to telecom Companies for there internet and phone equipment.” In other words, more cell phone towers close to your home, and a revenue-generating scheme for the city.
Finally, on November 13, 2018, agenda item 8, the “other shoe fell” with the council providing the go-ahead to staff to initiate a Proposition 218 election process. The direction included removing the maintenance cost of 13 parks from certain Landscape Maintenance Districts and moving the costs to the General Fund. This action does not require a Proposition 218 Ballot and could even more easily have been accomplished by a council administrative action. In addition, nowhere in the staff report does it recommend, nor did the council direct the election be accomplished for all zones with a single vote. This is clearly being done to manipulate the election outcome.
Starting with the first informational letter, the information provided has been deceptive. It stated within, “Marking the ballot with a ‘Yes’ will indicate you support maintaining streetlight services in your neighborhood and marking the ballot ‘No’ will indicate you are opposed.” Nothing could be further from the truth. This ballot will not determine if the streetlights in your neighborhood will be lit up brightly. It will determine a realignment and escalation of additional costs, not only to streetlight operation, but park and landscape funding, using a very unfair, and possibly illegal, single-vote process.
When confronted with opponents to this action at the last city council meeting, our five council members seemed confused and uninformed. But, with this issue being piecemealed in front of the council for the last year, and our council always telling us how they research and understand every agenda item before them, what conclusion should we draw? Our city council members are supposed to be representing and looking out for us, their constituents, not just trying to milk the community for all they can.
The ballot information requires far more than clarification, or a better sales pitch, as stated by Councilmember Miranda. As informed and concerned community members, there are two things we can do. First, VOTE NO on your assessment ballot and immediately return it to the city. A second, and more far reaching action, is to be at the January 8, 2019 city council meeting and voice your opinions and concerns. The best thing the council can do at this point is cancel the election and start over in a more fair and transparent manner.