Finding # 13: The 45 year-old rate of $1 per month is insufficient to cover lighting costs and maintain a reserve.
Before I discuss this hotly contested subject, I want to take a couple of moments to introduce you to the defining issue that motivated MacKay, Landsgaard and Shingledecker to form a “Votes for us, we will be a majority” ticket. To fully appreciate this issue, we must examine the past.
The Rosamond Community Services District (RCSD) was formed in 1966. The original services provided or managed by the RCSD included Water, Sewer and Streetlights.
I can see water and sewer being closely related, but the obvious question is, “Why streetlights?”
The streetlights and associated equipment all belong to Edison and the RCSD somehow was the focal point for collecting payment from the community and getting it to Edison. In other words, RCSD was and still is responsible for paying the electric bill generated by street lighting to Edison. When this relationship first came about, each RSCD account holder incurred a $1.00 charge on their monthly water bill to pay for streetlights.
Put the history lesson on hold a moment; let’s talk economics!
According to the “Measuring Worth” website; in 2014, the relative value of $1.00 from 1966 ranges from $5.63 to $21.40.
A simple Purchasing Power Calculator would say the relative value is $7.29. This answer is obtained by multiplying $1 by the percentage increase in the consumer price index from 1966 to 2014.
While, straightforward, this may not be the best answer.
The best measure of the relative value over time depends on if you are interested in comparing the cost or value of a Commodity, Income or Wealth, or a Project. For more discussion on how to pick the best measure, read the essay “Explaining the Measures of Worth” located at http://www.measuringworth.com/explaining_measures_of_worth.php
Since I am talking about the value of a dollar as it concerns the average household’s cash flow, I am going to skip over commodities and projects and go straight for the wallet!
If you want to compare the value of a $1.00 Income or Wealth, consider economic power: that is the value of that income or wealth (in 2014 terms) is $21.40!
Now, please do not take me wrong and please do not read ahead. I am not about to tell you that each household in Rosamond should be paying $21.40 each month to maintain street lighting.
Now back to the history lesson.
That is to say, given one dollar in 1966 and going out and spending it in 1966, a buyer could purchase the equivalent on $21.40 worth of goods in terms of TODAY’s dollar.
This simple economics lesson is the exact reason that $1.00 charged to each RCSD account in 1966 was more than sufficient to cover the cost of street lighting in Rosamond. Not only was it more than enough to pay the Edison bill; it actually built up a considerable reserve over the years.
But over time, as with almost everything, the cost of electricity increased and the $1.00 per month fee was not enough to pay the entire bill.
Having a reserve that had built up over the years, various RCSD Boards began eating into the reserve to offset the deficit.
In 1996 the voters in California adopted Proposition 218. (More info on Prop 218 can be found here: http://www.lao.ca.gov/1996/120196_prop_218/understanding_prop218_1296.html )
If after, checking that website, you are not familiar with Prop 218; in a nutshell Prop 218 states, “All existing tax or fee increases or new tax or fee implementation must have approval of the voters.” It’s not a simple majority vote either; Prop 218 requires that a tax or fee increase must meet a two-thirds approval requirement on a general ballot action.
Around the year 2000, RCSD realized that eventually the $1.00 per month would have to be raised; but because Prop 218 required such a high majority “yes” percentage and the overall unpopularity associated with even presenting an increase proposal, the RCSD felt that a voter-approved increase was simply not going to happen; the vote never took place.
In 2005, Kern County adopted an ordinance to create Landscaping & Lighting Assessment Districts (LLAD) requiring all new construction to be placed into a LLAD to pay for “street lighting, greenbelts, or other public medians”. More info on “Assessment Districts” can be found here: http://www.californiataxdata.com/pdf/AssessmentDistrict.pdf . LLAD2 was formed and included the majority of Rosamond residents. Streetlight fees were assessed on new houses being built after 2005. LLAD2 did not include existing homes built prior to 2005.
I do realize that history lesson was painful, but to fully understand the issue one must understand the past and its impact upon our current situation.
Along with the establishment of the LLAD2 in 2005, came a rate study. To better “characterize” the issues at hand and to determine the required amount that each RCSD account should be billed. This study soon determined that the reserves in the street lighting fund would eventually be depleted. Therefore, it was decided to conduct a rate study to bring in all of the existing homes and buildings built prior to 2005 into LLAD2.
Simply stated, the amount of money required to pay the electric bills for street lights was more than the amount of money coming in each month.
Once the rate study was completed the pre-existing homes and buildings built prior to 2005 were divided into zones with the “fair share” costs being determined by the number of street lights in each zone. Before I examine the decision making processes of the current RCSD Board, let’s consider a few facts.
1) Because of its “fixed nature” and the origins of its establishment; the $1.00 per month “cannot be increased”.
2) Any increase in the street lighting fee must be assessed and placed on the property tax.
3) Every household desiring street lighting, must be included in LLAD2.
4) A Kern County Ordinance dictates that street lights will be assessed on individual property owners.
5) Street light fees will be required to go through the 218 process. (A yes vote must meet a two-thirds approval requirement on a general ballot.)
Experts from several areas presented these facts, along with supporting comments to (then candidates) MacKay, Landsgaard, and Shingledecker. Choosing to ignore these facts, the trio campaigned relentlessly throughout the 2014 campaign and kept insisting that the $1.00 monthly fee was enough to pay the electric bill and if more money was needed then (if elected) they would simply double the $1.00 fee and the problem would be solved.
When I compared the facts, to the logic supporting their decision making; I instantly wonder how these Ed, Olaf, and Dennis would end world hunger.
When confronted with the option for a modification to the existing LLAD2, they campaigned against the lighting districts saying they were not necessary, that they would keep the street lights on making lots of campaign promises. The vast majority of which, have remained unfulfilled.
Even more facts:
1) On December 14, 2014; a legal and binding election was held by mail-in ballots with 16 zones voting NOT TO join the LLAD2 and therefore electing to have their street lights turned off and not be assessed a street lighting fee.
2) The outcome of the vote for all zones, was determined by a long-held American tradition of majority rules (a simple majority).
3) MacKay, Landsgaard, and Shingledecker did not like the outcome of the election, insisting that the street light issue should not be decided by 1 vote (a simple majority). They felt that the public was not informed and because of the low voter turnout that the election should not count and another election should take place and try for more favorable results. (We live in America? Right? Our democratic system does not work this way… I guess, when you are following the lead of Olaf… there is always a new tradition. (See the Finding # 2).
4) Proposition 218 requires that before a Prop 218-based vote is held, one public hearing is required. (The three of them, insisted on holding multiples public meetings (oh, that’s right… they get pair $147.00 per meeting… see the section on Finding # 4) The MacKay-led RCSD Board held seven public meetings, in effect seeking to impact the outcome of such a vote in their favor, rather than to let the general public decide own their own. I didn’t even mention the fact that they wasted a lot of money! (For the record, the Board members are allowed to claim reimbursement for “up to” six meeting days per month. Multiple meetings occurring within a 24 hour period count as a single meeting.)
5) On March 11, 2015 the majority of the Board voted to borrow $50,000 from the restricted water & sewer funds to pay for street lights in the 16 zones that voted by majority vote to not pay for street light and have them turned off. (So why did we hold a vote?)
6) This action was illegal because money cannot be borrowed from restricted funds without a plan to pay the money back. Resolution 2015-5 which was passed on April 8, 2015 contains no payback plan in the resolution. When pressed on the issue, the newly seated Board members indicated that they would pay back the $50,000 from the discretionary funds on July 1, 2015. (So let me get this right, they borrowed money from a restricted fund to disenfranchise voters and the “after the fact” payback plan is to borrow more money from a fund that is earmarked to pay back $2,000,000 in loans made to Parks and Recreation, what did I just read?) This does raise a question…since the Rosamond Community Services District Board voted to disassociate the RCSD from the Rosamond Community Foundation, they eliminated part of the repayment plan for parks. Do they not understand the Rosamond Community Foundation was created as a part of the plan to pay back borrowed money?
7) RSCD Board Members disenfranchised voters by ignoring an election that was held and imposed their will on the people rather than respect the will of the people.
8) Borrowing the $50,000 was a gift of public funds because it was used to pay for street lights with no obligation from the beneficiaries of the $50,000 to pay it back and because of this loan, those who voted to join LLAD2 were now being forced to subsidize those who are not paying because they voted to not join LLAD2 and elected to have their street lights turned off.
In closing, The Kern County Grand Jury obviously felt compelled to inform the RCSD Board members of the obvious. This isn’t the first time that these three have heard this observation; maybe, just maybe… since this issue is highlighted as a grand jury finding, MacKay, Landsgaard, and Shingledecker will feel compelled to address the issue.
====================== Finding # 13 states: “The 45 year-old rate of $1 per month is insufficient to cover lighting costs and maintain a reserve.”
The RCSD’s official response to Finding # 13: “The Board partially disagrees with this finding. The Board disagrees that the $1 per month rate is 45 – years old and instead asserts that the rate is 30 years old.”
To read the next section click here: The Midnight Writings: Finding 14 – “Let’s Talk Sewer”