The name’s Bond… RDA Bond.

All across the state, there is turmoil and confusion regarding the dissolution of Redevelopment Agencies. Brea is no exception. Except if you read the lead article in the current issue of BreaLine.

This 8 1/5 x 11 inch piece of real estate has become the number one launching pad for some of the most misleading, braggadocios and self serving “news” coming out of City Hall.

If you buy off on what staff writers pass off as journalism, our “… legacy of positive growth and significant infrastructure improvements is proof that redevelopment worked very well for Brea.”

There Have Been Benefits.

Hey, I’ll be the first to admit that a new high school, two fire stations, our civic and community centers and 750 new workforce housing units certainly benefit the community. I suppose the Brea Mall does as well.

These projects are a partial list and likely do not account for the majority of projects completed since the agency was founded in 1972. Oh, and before you start believing that “Brea was an early adopter” nonsense being spread around, The California Community Redevelopment Act was passed in 1945.

The passing of Prop 13 in 1978 firmly established the adversarial relationship between the state and cities, and it seems pretty clear that neither party is interested in mending fences… even if it could be paid for with future “tax increment.”

So What Is Tax Increment Anyway?

They toss this, and countless other cityspeak terms, around with apparently little or no interest in actually educating the general population. It’s not rocket science and it’s what’s saving our collective assets at the moment.

Simply put, when a redevelopment area is designated it’s property taxes are frozen at the current level. Then comes the fun part of floating bonds (federally insured), dreaming up projects (none of which actually get publicly approved), aggregating land (remember all the eminent domain battles), finding willing developers (eager to take advantage of the windfall) and painting intersections blue, turning abandoned railroad right-of-ways into trails and building a bigger better clubhouse on the old golf course.

Yeah, I’ll bet those projects are in perfect synch with redevelopment guidelines.

Poorly Written Legislation.  Surprise!

Unless there is better clarification in the law, successor agencies may be charged with meeting enforceable obligations entered into by the redevelopment agency as well as performing many other wind down functions. They will operate under Oversight Committees who will determine what will and will not move forward. It’s unclear what the full extent of Brea’s liabilities might ultimately be.

Statewide, for every $1 in revenue collected last year there was $18 of total indebtedness remaining. What’s the story here in Brea? Are our projects going to generate sufficient tax increment to keep us solvent? Anyone besides me interested in getting some answers in language we use every day? The career bureaucrats up in city hall need to remember that us folks out here on the street don’t speak gibberish.

Fast forward to today.

Yup, Brea’s RDA created almost $200 million in outstanding bond debt. Take that death grip off your wallet, it’s not up to you to pay it. Federally insured, remember? Tax increment, remember?

The mechanics for repayment should already be built into the process. Problem is, no one knows for sure. If they say they do, I’ll go out on a limb here, they’re lying.

Bond holders knew the risky nature of those tax free bonds. Real estate values could decline. Oops. Full tax increments may not be realized. Oops. Changes might occur in California law. Oops. Thanks Jerry.

Are The Skies Falling?

I think it’s very possible we may end up with a few orphaned projects. But Brea has always been good at sucking in unsuspecting developers, at holding their feet to the fire to milk projects for all they can get and in exchange maybe expediting a permit here and there or bumping up project density to help make projects pencil out.

I’m not suggesting for a moment that we launch into default panic.

But I do think it’s time for folks to step up and start asking the hard questions and demanding answers we can understand. Keep talkin’ that smack, keep printing that propaganda, and you’ll hear from us loud and clear come November.

45 thoughts on “The name’s Bond… RDA Bond.

    • Sally, I think it’s called reading between the lines. I fear we’ll need to do more and more of that, between now and November, if we’re really interesting in getting to the truth. To bad so many politicians and bureaucrats spend much of their careers justifying themselves rather than serving the public that put them in office and covers their paychecks.

  1. “… keep printing that propaganda, and you’ll hear from us loud and clear come November.” But will they really, Rick? Are there enough people in Brea who actually understand any of this, or care enough to do anything about it?

    The citizens of my community are largely ignorant of municipal shenanigans, and even when they know about them, only a handful are willing to go public with their concerns. Mostly, they are content to think the problem is in someone else’s community. It is part of the same phenomenon in which people hate Congress, but think THEIR Congressman/woman is doing a great job.

    • I appreciate your being so direct and to the point Susan. You’re right, a painfully few Breans take the time to even register to vote and most of them let the opportunity pass them by. One can buy a list of “high propensity voters” to use during campaigning and it’s small enough to make direct mail affordable and productive.

      I’ve mentioned it before, our city manager’s favorite quote about leadership. It bears repeating, “Leadership is disappointing your constituents, but in increments they can absorb.” (Marty Linsky, John F. Kennedy School of Government, Harvard University).

      Too many, finding themselves at the seat of power, seem to have succumbed to this approach and, finally, it is beginning to backfire on them. Their constituents have absorbed all they can and, now saturated with the effects of poor governance — even malicious malfeasance in some cases — they are as ready as they have been in decades to turn from their typical apathetic attitudes and stand firm against those who would take advantage of them.

      Yes, historically speaking, I would have to agree with your assessment. My fervent hope is that we’re actually on the brink of change, not from the government as repeatedly promised, but from the men and women who are our neighbors.

      The ones struggling to put food on the table, pay for their children’s education, manage a balanced family budget with diminished income, hold on to their home even though they’re upside down with their mortgage and their pleas to their bank fall on deaf ears… the ones wondering if they’ll ever see a day when they can retire and relax with the knowledge that their health and wellbeing are assured.

  2. I, too, would like to think we are on the brink of change, but I am not so sure. I actually worked a primary election where there was nothing going on at the national level and we had less than 25 voters from each party. All day. Of those, only two were under 25, and both of them were home schooled.

    It isn’t true of our whole town, but the district where I work the polls has registered to vote in massive proportions. We get a 90-95% turnout in presidential election years. It may be significant that 3 of our last 6 mayors are also from that district. But this is the same district where we had the abysmal turnout mentioned above for state and local issues.

    Instead of being “mad as hell and not going to take it anymore,” people distract themselves with other pursuits and act as if governance and malicious malfeasance are not really happening. What’s up with that? Plausible deniability, maybe? If they “don’t know” they are not responsible?

    I certainly don’t know what the answer is, but I appreciate that someone is writing a blog that asks some tough questions about local issues in particular.

  3. I’m just now reminded of a dream I recently had where I was interviewing Jerry Brown, and my question to him before I woke up was, “How do you feel about bringing about the current economic woes our state currently faces?”

    Now, I don’t know why I was interviewing him, but I seem to remember that he invited me to the interview. I guess he didn’t expect such harsh questions, which is probably why I woke up at that point.

  4. This is likely to be going on in other cities in the State of CA after all the Redevelopment fund money has been pulled. Just like changes in Facebook, people will figure out a new place for them to be gotten.

    • Denise, very good point. So many CIP projects were dependent on RDA money that, somehow, a newer, bigger, better version is likely to emerge. Whether it’s good for the people or not will remain to be seen.

    • Dennis, thanks. There are some who would label me a nuisance, but they get regular checks with the city logo on them so I’m not overly concerned.

  5. There are a lot of good uses for Redevelopment money. The issue could be that small cities have a smaller pool of talented people willing to work in government and that affects what happens to the city budget these days. Larger cities have an advantage just in the number of people and the size of the budget they have access to to deal with big budget changes like this.

    • Maria… some uses locally (especially those which actually produce sizable tax increment) have been well received, others the complete opposite. I wonder if sticking the local school board with higher property taxes was really offset by the new high school campus with it’s much larger maintenance cost? I also wonder what definition was used to suggest that the property was “blighted” in the first place.

      Of course the school district, I believe, is still part owner of their old property which… thanks to RDA involvement, has been transformed into another big strip mall generating rent and sales tax. “Oh what a web we weave when first we practice to deceive.” – Sir Walter Scott

      At the prevailing rate for public employees, there is no shortage of willing participants, even in tiny little burgs. Coping with their excessive compensation and massive pension liabilities, payroll being any community’s largest expense, will be especially challenging in the years ahead.

      Redevelopment, with it’s own lengthy list of shady issues, is finally getting it’s plug pulled… but thanks to an absence of thoughtful planning and legislation, no one has a clue how to gracefully dismantle these cumbersome organizations or to positively ensure that none of the statewide One-Point-Something Billion (with a “B”) dollars in federally backed bonds end up in default somehow. What we neither need, nor necessarily want, is another bogus federal bailout.

      Here’s an idea. How about we get more people off their apathetic butts to elect public “servants’ who understand what it means to live within your means. Of course people will also need to stop whining about needing more and greater entitlements and objecting to the increased taxes required to pay for them in the same breath. Oh, and those not paying their fair share are precluded from dipping into the public wallet for anything!

  6. Politics as usual…

    You know…instead of electing public representatives to terms, maybe it should be treated like Jury Duty…or even on a volunteer basis. Have the average citizen serve a week on the City Council, as State, & U.S. Representatives. I bet then you would see a lot less red tape and waste.

    • You know Chris, that’s a very interesting idea. Most cities have pure volunteer positions, commission and committee members, and you never hear of them getting caught up in the machinations of local politics. They donate their time, often years, to help with Parks & Rec or Cultural Arts, they get a fancy plaque and a pat on the back when they leave and, with one notable exception (me) never bite the hand that feeds it. To heck with term limits, make ’em all short term voluntary assignments and I agree, I’ll bet you get a whole different class of individual.

  7. When most people hear phrases like “federally insured” (just like the FDIC or Fannie & Freddie) they probably think that someone else will cover the bill, when it’s actually all of us collectively. And the bills are adding up faster and faster.

    • True Mitch. So maybe we won’t pay it with our right hand… maybe it will be our left. I hadn’t really thought of it quite in that way before. Jeez, how many routes are there into my wallet?

  8. “Anyone besides me interested in getting some answers in language we use every day? The career bureaucrats up in city hall need to remember that us folks out here on the street don’t speak gibberish.”

    I think a lot of that gibberish is purposefully gibberish-y. It seems that all politicians know exactly how to make something unbearably boring/complicated in hopes that the public won’t pay any attention.

    • Oh yeah, it’s too commonplace not to be intentional Matt. Most folks in town could turn on council meetings on Tuesday evenings via public access but they don’t. So much more to see on Entertainment Tonight or Jeopardy! Like Susan suggested, these folks are getting exactly what they deserve.

  9. We say “tutto il mondo è paese” (the whole world is a village) meaning that the same things happen all over. You’ve read that Italy is slowly recovering from government debt at expenses of people (45% of Gdp go in taxes, meaning that entrepreneurs pay over 66%, since you have to include Vat too!). So we know that beyond great government project (no matter at what level) there’s always more taxes and waste of resources! Glad your town have people like you looking closer to what the government is spending.

    • Fabrizio, grazie per il commento. Sono contento che si è scelto di leggere il mio blog e fare un’osservazione intelligente. Siamo di una mente e dello spirito!

  10. Keep asking the hard questions until you get the answers!

    If “Brea Matters” blows enough smoke, eventually people will be convinced there is a bonfire party somewhere. I think the voices trying to cut through the smoke and trying to explain what is truly going on have an uphill battle. I think it is awesome you are doing that, Rick!

    • Gina, yes, the privatization of most services has saved the public on many occasions… though we can’t deny that, health care as an example, has become as cumbersome and problematic as socialized medicine in other countries. Underneath it all lies the motivators of greed and self-service. Short of the old fashioned “ride a rail out of town” I’m not sure how we solve those issues.

  11. Like most government efforts, this idea started with good intentions. Also, like most government programs, these great ideas simply don’t work and evolve into many negative unintended consequences. The fact is that the private sector can do everything better, cheaper and faster than government and that the world would be better served if government did less.

    Thanks for letting the world know about these situations.

    • The state’s intention was to replace blighted areas with “workforce” (affordable) housing and property use that dramatically increased tax increment. Instead, city’s saw an opportunity to knock off a few pet projects, most of which had no positive financial impact for the community, and small minded politician’s found new and innovative ways to get their name put on brass plaques. These were not unintended consequences.

      I agree, the private sector has a better track record in many areas. Thanks for joining the conversation Gina.

  12. I like the subtitle to the blog: “Because there’s two sides to every story.”

    I don’t know much (anything really!) about the circumstances in Brea. In general I like to (perhaps naively) think that government as well as entrepreneurs are doing the best they can.

    Overall I feel that our world is too complex an organism to be successfully ‘steered’ by some controlling body made up of politicians or administrators who have not themselves experienced running enterprises successfully and who have incomplete information about cause and effect.

    In the best of worlds governments and private enterprise are open to one another’s point of view and willing to learn from and work with one another, on the assumption that everyone is doing the best they can!

    • Thea… I appreciate your taking the time to add your thoughts here. Wouldn’t it be nice if we actually lived in the best of all worlds? We both know we don’t, hence the importance of oversight and accountability. The very complexity you point out has robbed us of having the luxury of assuming everyone is doing the best they can.

  13. It seems as though we are so inundated with info that we tend not to care about the things going on right in front of us. I hope those that this affects are/were able to gain some insight/awareness through this post.

    • David… I’m put in mind of the phrase “hiding in plain sight.” We’ve become, as you suggest, so informationally overloaded that the most important matters are often overlooked out of deference to the most current viral clip of someone rollerblading down an up escalator wearing only a pair of Spanks. I’m starting to make a little “noise” out here and will stick to it.

      As readership improves, hopefully so will Brea.

  14. Now this is interesting. I have not educated myself in this arena.Thanks for your insight and now, when others talk about this, I will have a little insight as well. I appreciate the time and energy that went into this post!

  15. It’s great that you take the time to raise public awareness and share your insights. It starts with one person wanting to make a difference and taking action to create change. I also agree with you, that legislation should be written in simple language.

    • Karla… thanks for your support! Yes, laws we can all understand, that the majority of us believe are prudent and necessary, would make life a whole lot better wouldn’t they.

  16. Great comments, Rick. It has been very enlightening to read them, and your responses to them as you chronicle this ongoing saga for us. Do you have any updates? Has anyone taken notice?

    • Susan… everyone is still pretending that they know what’s going on, and they’re all just fooling themselves. Two out of three pending projects (Rails to Trails and Birch Hills Project) are vulnerable to being orphaned, the parking structure downtown may well be okay if the attempt to move the public library to the ground floor (from the civic center) gets tabled… as it should. Staff and Council believe they’re still in control and they’re in for a very rude awakening.

    • David… Thankfully, a growing number. Now if we can find a worthy candidate or two come November, we might actually be able to swing things around in favor of the people. Novel idea, I know.

  17. I’m not sure if many have seen this, “Redevelopment: The Unknown Government“. This publication was put together by the Municipal Officials for Redevelopment Reform headed by Chris Norby in 2006. It is definitely a must read. There are some interesting comments and facts about Brea in it. Additionally, Brea has one of the highest per capita indebtedness in the state because of redevelopment.

    • Stephen… Thanks for the link to that report! It is not one I had read, but I’ve saved a copy for future reference. You’re right, it covers a lot of ground and clears up a lot of misconceptions about what Redevelopment is really all about. I appreciate your following “Brea Matters” and especially like to see a fellow Brean unafraid to speak out.

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