South Shore’s Measure S bond action taking place illegally
By Kathryn Reed
South Lake Tahoe has begun the process to refinance Measure S bonds without the proper authority to do so.
The city is one of three entities that is part of the South Lake Tahoe Recreation Facilities Joint Powers Authority. The others are El Dorado County and Tahoe Paradise Resort Improvement District. It would take a vote of the JPA board for the bonds to be legally changed. That has not happened. Nor is there a JPA meeting planned in the next month.
City Attorney Patrick Enright told Lake Tahoe News that John Upton told him to start the process. Upton is the lone staff member of the JPA.
John Upton and Norma Santiago have not publicly discussed refinancing Measure S bonds. Photo/LTN file
(The JPA’s sole job is to oversee the spending of the money collected from the 2000 voter approved recreation measure.)
“I assumed John had the power to do this,” Enright said.
Upton, who did not return multiple calls, could only get that authority by speaking with the three JPA board members individually. To do that would have been an egregious violation of the Brown Act, completely circumventing the public process through an open meeting. Without a vote by the JPA board, it makes the city’s actions illegal.
Upton, who has held multiple elected positions representing the South Shore, knows what the Brown Act is and could not say he was unaware of the process.
South Tahoe wants to refinance the tax-exempt bonds and change them to taxable bonds in order to accommodate IRS rules regarding having a private operator who wants to make a profit run the city-owned ice rink.
(Measure S paid for the ice rink in South Tahoe, but as of August is has been run by a private company.)
“The contract with those guys is contingent upon this. I’m not sure what is going to happen with the ice rink,” South Lake Tahoe Mayor Hal Cole and the city’s rep on the JPA board said. “We have to adhere to the conveyance of the bond that was sold. If that means we renegotiate the contract for the ice rink, so be it.”
Debbie Henderson, Tahoe Paradise’s JPA board member, is out of the state on vacation and not reachable for comment. However, as finance manager for South Tahoe Public Utility District, she would be well versed in how the bonds work as well as public meetings.
In August, El Dorado County Supervisor Norma Santiago, who chairs the JPA board, told Lake Tahoe News she did not know enough about the bond issue to comment.
In October, she is refusing to return multiple calls to discuss the matter.
But she is aware of the issue because she has spoken to county Auditor-Controller Joe Harn about it. He referenced that conversation in a letter dated Sept. 27.
In the letter to Santiago that was copied to Cole, Henderson, Enright and Lou Green (El Dorado County counsel), it says, “I believe that it is in the best interest of residents and property owners in CFD [community facilities district] 2000-1 to pursue a tax exempt refinancing of the bonds at this time.”
Harn told Lake Tahoe News it is better for the property owners, who are mostly in the boundaries of Lake Tahoe Unified School District, for the bonds to stay tax-exempt. He said refinancing the existing bonds could create a larger pot of money for recreation needs or help pay down the debt.
“They are going to have to demonstrate to me why this is in the best interests of (residents) and I know of no benefit at this time,” Harn said of South Lake Tahoe’s desire to switch the bonds to taxable.
The city is going forward on the wrong assumption that Upton has the power to make that decision.
Enright is working with Mark Northcross, who was involved with the original bond sales.
“We have a couple proposals back. We are taking a look at those,” Enright said.
It’s possible all the hours Northcross has put into this bond action could end up being donated time because state law says he doesn’t get paid unless the work to be done was authorized by the board that has the ultimate authority. In this case, that would be the JPA board. And the board has taken no action regarding refinancing the bonds or changing them from tax-exempt to taxable.
mr enwrong,
If John Upton told you to (rap in your hat would you do that too?
I remember John Upton was also a big proponent of the now infamous “hole in the town” where all the money goes. (Thats a John Prine line, or was it Steve Goodman?)
I digress. Bake to Upton…
How much did he get paid for that advice?
There you have it, that’s how this Town and County are.
John use to be a county supervisor. He knows the Brown Act.
But this is standard opperating procedure.
Oppp. Got caught this time.
Interesting how quick Enright got cronified and ruined.
So goes the town.
Sounds like the management contract should be suspended immediately with the private company and the city should return to running the facility until a final, legal determination is made.
Just yet another example of the City’s flagrant disregard for the law or proper procedure. No surprise there. Has anybody dredged up the 2009-1020 Grand Jury reports showing all sorts of questionalble behavior on the part of City officials. There is a definite pattern.
An emergency meeting of the council needs to be convened asap as Mr. Enright needs to explain his actions. He reports directly to the council. Putting the company (city) in legal jeopardy through an action without proper justification would be grounds for termination in most companies. Then, he could go to work for his new boss John Upton who along with Cole, Lovell and Davis represents most of the errors city council has made in the past.
It is very disconcerting that all of these people, especially the City Attorney, do not possess basic knowledge of what is required to take action on any instruments of indebtedness. Perhaps they know and don’t care…
This is basic municipal law 101.
Changing from tax-free bonds to taxable will increase interest rates as investors now have to pay taxes on their interest. Therefore more money will be needed to pay interest on the debt so less will be available to pay other expenses and also for bike trails and Tahoe Paradise’s park. Also bringing new bond issues to market is quite expensive and it comes from the bond proceeds, so less money for community projects.
What the heck are these guys thinking?
It scares me what is going on behind the scenes.
For clarity and honesty it is time for all cards on the table. Us taxpayers want the truth, the whole truth, and nothing but the truth. You know full disclosure.
I hope Norma is educating herself on this issue.
I hear another hole in the ground sucking our tax money into wasteful expenditures.
Mr. Upton we deserve a full explanation of what is proposed and why.
And Mr. Enright, you take your orders from a staff member of the JPA not a resolution from the JPA board?
Serial contact of board members may violate the Ralph Brown Act.
And Mr. Harn, how can paying more interest generate more money for projects?
It is pretty obvious the the city has acted without much thought to the consequences of their action, again. They created this situation and, therefore, are completely responsible for the outcome. Once again, short-term savings have very high long-term cost. If the answer appears to be easy, it is probably not.
Once again, South Shore voters were tricked and deceived into approving this very poorly prepared measure, in which funds were misspent (Tahoe Paradise Park) and promises failed to deliver (number of ballfields). The ice arena consistently lost money, forcing city taxpayers to cough up the difference.
Now we have more sneaky maneuvers being revealed behind the scenes that likely violate the law.
Don’t reward these bureaucrats for their continued mismanagement as they try to make a grab for the Measure S pot of money and spend it elsewhere. Vote No on Measure R.
It seems outsourcing the ice rink will not be as profitable as Mr O’Roarke projected. I still would like to know if the city is paying the electric bill there as well. Once again Kae, great information.
Steve, I would sure like to know exactly what funds were misspent at Tahoe Paradise Park. The problem being discussed in this article relate to the city’s decision to privatize a city-operated entity that was funded by tax-free bonds. The city has created an illegal situation through lack of attention. Why the attack on Tahoe Paradise Park here? While I agree with your sentiment regarding rewarding bureaucrats, this has nothing whatsoever to do with Measure R, but rather the totally clueless city management. I believe that you are only confusing the issues which will allow them to get away with their incompetence. Respectfully, please explain, thanks.
I don’t understand why so many people think that the ice arena needs to turn a profit. Most community recreation facilities do not turn a profit. Bike trails, playgrounds, parks, recreation centers, swimming pools, public beaches…none turn a profit but they all contribute to a community and they improve the local economy by drawing in tourists and locals alike. The ice arena is no different. It is a community recreation facility and the amount of money we were spending to support it prior to it being turned over to a private enterprise was really nothing in terms of the entire City’s budget. Now it turns out that this decision to privatize the ice rink is going to jeapordize the status of the bond issue, an issue that should have been thought of before we leaped into this contract with the new rink operators. I hope they are able to renegotiate this lease so that it doesn’t end up costing us more than we were paying to subsidize the ice rink when it was city run. As far as Measure R goes, we need to use the funds to repair the bike trails and we need to support more Measures to improve our parks & recreation. These facilities attract more tourists and locals alike and their continued improvement and support will be the only way we can save our economy. Although from the looks of our current city council, no offense guys, but it seems apparant that health & fitness is not high on their personal priority list. I wish they could understand that recreation is what draws tourists to Tahoe.
Oh Johnny your still at it! Looks like your machine is rusting and needs a little oil.
Get rid of Enright. I assumed! Attorneys are not supposed to assume anything. He assumed adding a box to the Lake View Commons paperwork was sufficient. Enright is costing all of us and no one is screaming about it.
Sloppy work.
Good comment GEEPER!! Yes, I , too would like to know who is paying the Electric, and Gas bill for the Ice Arena??? ALSO, Rumor has it, the rent to the City (only $2000.oo/per month!!!)has NOT BEEN PAID (!!)to the city since they took over!!! Apparently they have FREE RENT (and utilities???) Until JANUARY!!!! so if they take in any money at all it is just going in to their pockets! What a load of cat poop!
Dumbfounded, refer to the following:
http://www.tahoedailytribune.com/article/20060629/NEWS/106290031&parentprofile=search
and
https://www.laketahoenews.net/2011/08/not-all-affiliated-with-shore-shore-rec-measure-kept-in-loop/
Questionable expenditures at Tahoe Paradise Park that were never justified. A 2006 audit by County Auditor Joe Harn that “uncovered serious accounting deficiencies”. One has no choice but to conclude that funds were misspent, hidden behind sloppy oversight.
Measure S has been a debacle from start to present.
Anything the City of SLT is involved with is run poorly, add this JPA to the list. Someone must be held accountable?
The city, el dorado county and the north part of the state are all up $hits creek.
Ain’t pretty the way that Californians have allowed itself to be run. Shamefull
Ignorance of your plight does not solve it. Here’s a detail few will know. Consider that the County Of El Dorado has an agregate $500 million dollar unfunded employee benefit liability according to the June 30, 2010 audit numbers provided by the county auditor Joe Harn. (+ or – a million here or there)
Ouch.
Half a billion bucks for 181,000 people to pay.
Yowza
CatLapper, its actually common in commercial leases to have a few months free rent at the beginning. How long is negotiable.
My question is, how come the contract isn’t made public so we know it was bargained in good faith. Also usually on top of utilities a tenant pays “nets.” Which are property taxes, insurance, and maintenance.
My real grip is this, I live in the county I paid into that rink, yet somehow my tax dollars were used so that the city can rent it out and collect rent??? How about a refund for us county people, or putting that money towards building the ball fields or bike trails that this measure was supposed to build / support.
I voted for S thinking it was good for the community? We have been mislead and ripped off. The ice rink has been costing the tax payers a fortune and was the reason we didn’t get new ball fields (little league and softball). The field that was built, might as well belong to the college, because our youth rarely use it? This was done under city management! A private entity will do a better job guaranteed.
With that said, enough is enough NO on R. Give us the maintenance funds back and quit wasting our money!
A private entity will do a better job – REALLY??? Why don’t you ask those that are trying to use the facility under the private entity and see how they feel about that! That statement couldn’t be farther from the truth at this point!!!
TIP – for all employers and business owners looking to save money by substituting contract labor for employees–BEWARE – The current Hot topic for IRS is Incorrectly Classifying Contract Labor (rather than paying as an employee).
Log onto IRS.Gov and search “independent contractor defined” for regulations and information on understanding how to determine whether the Individuals Providing Services are Employees or Independent Contractors. This can be a very costly mistake.
I hope that the City researched this transition and that the contract labor used at the Ice Rink meets all of the contract labor requirements.
Side note – when hiring an out of state contractor for services performed in California, payments can be subject to backup withholding, see franchise tax board website for regulations.
Another paper dream that no one wanted, but got built and now it cost all us .
I remember that meeting,think the winter olympics were that year.
That Big mouth, know it all, Lane, stood there told the people that soon we will have skating shows on ice and hope Hamilton would attend,it be a big draw.
Boy, hindsight sure threw water on their smoking fire and the tax payers wallets.
Was a dud to start with ,be a dud when they send another check.