PATTOO WEEK, Part 3: Two Thoughtful Objections … and Smoldering Acrid Murrbot Ravings

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PATTOO — the “Protecting Anaheim Taxpayers from Their Own Opinions” Act (known by some ideologues as the “Anaheim Taxpayers Protection Act”) first came to the Anaheim City City Council for its approval on March 3, 2015.  It is a Charter Amendment that would require a 2/3 vote of the Anaheim City Council to place any proposed new, increased, or extended tax on the ballot.  Anaheim’s Council may send to the citizenry for a November 2016 vote.

To follow this, you’ll probably want to read:

• Cynthia Ward’s original March 9 story on the subject
• Tuesday’s introductory post for PATTOO WEEK, which sets forth the major ideas for the week
• Yesterday’s second post — public comments, a bit o’ Murrbottery, and Kring Komedy
• Our four-part series from March 8 presenting OJB’s own official unofficial March 3 meeting transcripts

Part One — Public Comments
Part Two — Murray’s Intro, Kring’s Kvetch, and the Vanderbilt-Houston Discussion
Part Three — Tait & Houston, “Mr. Procedure,” Debbie Moreno, Murray, Brandman
Part Four — Bonds, 3-2 Measure N Vote, Angry Brandman, Tabling, Tait on JPA Loophole

As if we need to repeat it: these aren’t official transcripts; they were the best we could do with our OJB volunteers.

(1) JAMES VANDERBILT WONDERS ABOUT UNEXPECTED CONSEQUENCES

This next section is a bit on the serious side — you can skip it for that reason, but you shouldn’t — and shows a Councilmember doing what a Councilmember is actually supposed to do: ask incisive questions, which demonstrate careful attention to the material he’s read rather than just being designed to promote a rubber stamp of staff recommendations, of the city staff.  (When’s the last time anyone but the Mayor has done this?)  My sense is that Vanderbilt has not yet made up his mind.  If Jordan Brandman truly does stick to his Democratic roots, rather than rescuing his BFF Kris Murray’s PR stunt at the last moment (more on that later), Vanderbilt may be the deciding vote.  If so, it will certainly be a thoughtful one.  In this first set of questions, he considers the future implications of any decision.

We’re going to use the same “bullet point then comments introduced in orange” method that we did yesterday.

• Vanderbilt wants to know what other Charter Cities are doing regarding their exclusion from the Prop 62 provisions that Murray wants to apply to Anaheim, starting with the basis of San Leandro’s argument that led to the 2002 decision that Charter Cities weren’t bound by Prop 62.  City Attorney Michael Houston doesn’t know if any other Charter Cities have done what is proposed for Anaheim.  San Leandro’s argument was that if it’s not in the constitution it doesn’t apply to Charter Cities.
• Vanderbilt asks Houston to define the difference between a general tax and a special tax; the latter is earmarked for special purposes rather than going into the city’s General Fund.  They discuss the tax applied to short-term rentals, which Houston says was not a new tax but fell under the existing Transient Occupancy Tax.
• Vanderbilt notes that innovative once-new taxes like the TOT have helped the City fund municipal services, but that under this rule it would be harder to get in onto the ballot.  He raises the question of whether the City would need to pass a new tax for medical marijuana dispensaries.  (He may also have been thinking about taxing marijuana generally, if that is legalized and authorized.

And — we’re done with Part 2 of our Transcripts; on to Part 3!

[2] TAIT SEES CREDIT-RATING AGENCIES WATCHING AND HEADS FOR THE TABLE

• Tait obtains Houston’s agreement that the City has never used a supermajority for any ballot measures.
• Tait notes that the Council has only twice put measures on the ballot since 1994: the TOT, which passed in the late 90s, and Measure N, which failed last year.  Houston agrees.
• Tait notes that Measure N was placed on the ballot based on a 3-2 vote — Tait and Murray dissenting — and that under this rule it would not have gotten onto the ballot.  Houston agrees.
• Tait suggests that there is no rush to place this on the ballot right now.  Houston says that the real deadline would be roughly August 7, 2016.
• Tait requests a definitive report as to whether any other Charter Cities have done this.
• Tait wonders — and let’s mark this well — whether raising raising the hurdle even to put a tax measure on the ballot will hurt Anaheim with bond rating agencies right now.
• Tait notes that the present Council has borrowed and spent a lot of money and wants to borrow and spend more:
  • $200 million for the Convention Center
  • $200 million for ARTIC
  • $300 million for the ARTIC-to-Disney-to-Convention-Center Streetcar
  • $158 million for the GardenWalk Giveaway
  • $10s of millions for the GardenWalk sales tax subsidy
  • millions for future car dealer rebates
• He notes that if these gambles don’t pay off, taxpayers may want to decide to tax themselves rather than suffer even worse consequences.
• He notes that the Council’s actions might be tied indefinitely, keeping them from acting fiscally responsibly.
• So he moves to table the motion — and all hell breaks loose.

We’ll skip the parliamentary debate for now and make it part of our Weekend Feature starring Jordan “Mr. Procedure” Brandman.  The motion to table was, at this point, rejected on a 3-2 vote.  But it was more fun than that sounds.

[3] MURRAY WHIPS OUT HER MORENO AND SQUEEZES IT FOR COMFORT

(Have you noticed that, unlike yesterday, we haven’t had any notes yet?  That’s about to change.)

• Murray asks whether anything in PATTOO (although she doesn’t call it that) in any way impacts Anaheim’s bonding authority or bonding capacity, so that it would it impact the city’s rating capacity.  City Manager Emery defers the question to Finance Director Debbie Moreno.
• Moreno isn’t certain without talking to the bond rating agencies, but doesn’t believe that it would significantly impact Anaheim’s credit ratings, because they typically see the risk is raising funds as the voter approval to get the tax.  Anaheim doesn’t anticipate any increased taxes, so the rating agencies don’t likely presume that they would get taxes approved in the future, and so our ratings wouldn’t be based on future raises in taxes.

Debbie Moreno!  The only picture extant.

Note: Debbie Moreno is extremely reliable: she will say whatever Kris Murray wants her to say, whether it makes sense or not.  And this doesn’t make sense.  First, they may typically see the risk as being voter rather than Council approval, but being sharp intellects they would realize that Anaheim may be an exception because even if the voters wanted something logical like a gate tax to keep the city out of bankruptcy, all Disney would need to block a gate tax was just three Councilmembers out of seven — and that’s not so difficult for a huge behemoth to arrange.  (They may be able to get four, if they need it — but that means getting votes from more negative districts, so it’s probably a little more than 33% more difficult.  A bond rating agency might care about that sort of difference.)

Second, what she’s saying there at the end is that because agencies never expect Anaheim to raise taxes in the future, Anaheim could literally make a law saying that “seeking any increase in or introduction of new taxes is a misdemeanor to be prosecuted by the City Attorney and punishable by 364 days in jail” and the rating agencies wouldn’t even blink — because they presume that Anaheim acts like it already has such a law.  This is simply nuts.  I believe that Cynthia has some relevant evidence that I will splice in here.  Why did Moreno even venture an opinion if she had no basis for it?  (Well — OK, yes, we do know why: Kris Murray wanted her to.  Still — this woman’s a professional!)

 [4] MURRAY: THE VOTERS HAVE SPOKEN: “DON’T LISTEN TO US VOTERS!”

What this installment needs is More Kris Murray!  Let us listen together to the siren’s drone.

• Some city programs were listed tonight [by Tait] as having a cost impact to the City, but transportation programs that were mentioned have a transportation funding stream and for operations have a dedicated source of funding already delineated for them.

Note: No. That $200 million spent on the glowing ARTIC cockroach egg did come from Measure M2 funds — but had the City not used the funds for that purpose they could have been used for Anaheim’s actual transportation needs, like upgraded bus service and more, better, and faster street repairs.  And again, some of the money used in street repairs was actually financed as part of the >30 year Convention Center bond, which has actually made people in other cities laugh out loud when I’ve told them about it.  As for the Streetcar, the half of its funding that was to come from the federal government is now unlikely to be delivered.

• The TOT incentives recommended by Staff and approved by Council have had generators attached – economic studies by two different firms, for Gardenwalk, as well as, I believe, for the auto dealers’ incentive.

Note: One of the most useful things that have come out of the debate over Anaheim Stadium — and CATER’s public records requests related to that underlying issue — is confirmation that Anaheim’s “economic studies” are not to be trusted.  The report by CSL — an agency that should have been conflicted out anyway at the time that its sister subsidiary Legends was bidding on the Angels’ concession stands — was bid out as a PR piece that would be to support the proposal to extend the Opt-Out period and pass the MOUs.  And all it had to say about “Anaheim’s” economics was cut and pasted from reports on other cities!  (As for “recommended by Staff” — Staff that don’t do what the Council majority does have a tendency to quickly become “Ex-Staff,” so that means little.)

• “But the funding would be based on new funding and therefore exceed the amount of the subsidy and therefore are revenue generators for the City and are not putting the City in any long-term financial risk.”

Note: Just because someone talks like a robot doesn’t mean that they have the analytic rigor and forthrightness of a supercomputer.  It can also be a way to put people to sleep.

• Voters statewide have already said in Prop 62 that they want a 2/3 threshold in place.

Note: No, that applied to General Law cities.  And in the dozen years since it was clarified that Prop 62 didn’t apply to Charter Cities, apparently no Charter City before now has ever tried to do this.  And the public has not been screaming for it.  It’s just coming up here and now because a Disney gate tax may just make too much sense to fail.

OK, no more paraphrasing today.  You’re going to have to sit through some Kris Murray direct quotes.

• “This is really about conformity and ensuring that, as a Charter City, we are increasing that threshold with voter mandates that have already been – that have already taken place across the state, and ensuring long-term that if there is a tax that is being considered by Council that it is of such an imperative that it has a 2/3 support behind it before it goes to the voters for their consideration.”

Note: ZZZZZZzzzzzzzZZZZZZZ … What?  Well, if it’s conformity with General Law cities that we want, how about just repealing the City Charter and this will apply automatically.  (Answer: Anaheim doesn’t actually want “conformity” with General Law cities because it is bigger, wealthier, and more complex — which is why it is governed by different, non-conforming, rules!  Other cities don’t built $200 million glowing cockroach eggs with their street repair funds!)

• “A number of the tax proposals that we’ve heard addressed over the last couple of years are regressive in nature: sales taxes, use taxes, utility taxes and even gate taxes.  Those have a cost-of-living impact, and they are a higher proportion of a low-income person’s salary and income than a higher income or more affluent resident.”

Note: No, gate taxes are not like the others.  They are essentially low-grade “luxury taxes.”  Actual low-income people don’t usually have the $99 for a Disneyland ticket, so they don’t go to Disneyland for much the same reason why they do not dine at The Catch.  If they do, a $1 or $2 surcharge to pay for City services isn’t going to break them, especially when Disney itself is raising the price of its gate tickets by almost $4 each year!

• “Therefore if our City is ever going to look to those types of tax increases, it should be done with the full support of the Council.  I would say it should even have a unanimous vote of the Council.”

Note: Kris Murray has rarely if ever made it more clear that she is on the City Council to represent the Disney Corporation and not the people of Anaheim in general.  She would like to have an individual veto over putting a gate tax onto the ballot — no matter what.  And meanwhile, she weighs the City down with unlimited bond debt.  If she is ever recalled, this statement will be on the petition.

Mem–ories … light the corners of my mind… misty water-colored memories … Councilwoman Murray with Disney government relations director Carrie Nocella.

• “But certainly, in line with Proposition 62, which was a statewide initiative, was approved by our voters.  The precedent has already been set for this 2/3, and we would be conforming with that, and in conformance with already voter-approved mandates, and really insure that if that type of tax is taken, is taken with a super majority of the Council, and that’s where the taxpayer protection element comes from.  I would just ask that we move forward, and insure that this type of protection is in place, this conformity is in place in Anaheim, and I don’t think that there is any benefit in waiting to put something before the voters for their consideration.”

Note: This is why Kris Murray keeps emphasizing every chance she gets that Anaheim is so fiscally well-run — because she wants the City to “conform” to rules that specifically do not apply to it despite that they may someday truly stand between the City and bankruptcy.  She does not want you to give a single thought to the possibility that taking her advice might bankrupt your city.

Now that, at least, is no surprise.   What con artist does?

READ PART FOUR NOW.