Switching Gears - End of an Era

The end of the year is a time to reflect on one's life and legacy.  It is a particularly compelling time, in view of climate change realities becoming more apparent every day, that what we say and do is shaping our immediate future, not just the distant future for grandchildren.

For this reason the end of Stocks & Bond majority reign over Encinitas city government make future plans and our legacy feel more urgent than past election years. This deserves thinking that rises above facile political maneuvering or infotainment or cheap shots borne out of a social culture of marketing. It's governing time, not campaigning time.

Having an arch nemesis like Jerome Stocks turned out to be a rallying point and organizing platform for many in the last election. Even though the new council members Lisa Shaffer and Tony Kranz did not campaign as anti-Stocks candidates, thousands of Encinitas voters were interested in removing Jerome Stocks above all other concerns. Our Mayor blog was created to acknowledge legitimate disgust with Jerome Stocks' behavior as a so-called public servant. The years of city council meetings contained enough clips of this behavior as evidence for the electorate. The idea was that more people needed to be able to witness first hand – via these clips and linked stories, commentaries and some background information – what critics of Stocks had been saying for years.

Whatever factors were involved it is a fait accompli now and time to switch gears. Is it possible we can still capture the motivation the anti-Stocks group had with a formidable problem we all can identify with versus a person or group of people? Can we cultivate an educated electorate unafraid to voice public opinions for fear of seeming stupid or simply wrong? Is it possible to encourage awareness and still identify as a savvy, social being?

It is easy to see from some of the current community voices reacting to the We Love Encinitas organization (and ethically dubious campaign fliers) in the online news posts and one blog's comments sections, Kristin Gaspar is a likely target to transfer anti-Stocks energy. We get it. Our Mayor blog has 3 or 4 dozen examples of Gaspar's behavior along with Stocks or solo that deserve condemnation. No doubt the new year will bring more.

But, this personality focus is really toxic stuff. It too easily morphs into character assassination, body policing, misogyny and other community-killing divisive words. This invites lazy thinking and other vitality sucking habits. Besides all that it brings out our worst rather than our best natures. Critical thinking asks more.

What if we instead switched gears to the three things that repeatedly come up in Encinitas politics as problems or omissions;
1. finance (economy, budget, pensions, etc.),
2. open government (sunshine ordinance, transparency, civility, accessibility, etc.)
3. environment (land use, community character, resources, climate change)
4 traffic (could fit in environment, but some very big issues ahead need deliberation)

Let's demand of this new council – so they in turn will demand it of city manager and city attorney and city staff – a clear direction of where we are going in any of these areas. Not only must we insist on this, we should demand comprehensive research, comparisons to other cities and emerging trends from our well paid staff. Let's demand that deliberations by the council be more than unsupported platitudes, rambling monologues, throwing out a bunch of buzz words, personal memories, rehearsed staff exchanges and other time-wasting talk.

They will make mistakes, council and staff alike. We will find some council members and city employees lacking at any given time. Hell, we'll continue to have community members who annoy us. We will disagree. This editor will try to catch the kinds of things that illustrate dissent and controversy. This isn't a good news, community events calendar, party line place. Our city government's corruption and incompetence demands vigilance. We don't have to make things up. Video clips, quotes, news coverage and the whole works will apply. The former super majority clearly served the few of their overlords. There is a new game in town. The mandate is genuinely from the majority of our community so there are more eyes watching.

And, if a blogger can be allowed to dream. Just imagine a city council becoming relevant to the disengaged, the young, the non-white people, the renters, the low income residents of Encinitas. It is a myth that when all people enjoy a higher quality of life and feel security and engagemed it means something is diminished from another's quality of life. If this new city council wants continuous improvement, they should think big.

We Know About Bullies . . .

Art by Sarah Saldana

Art by Ricardo Levins Morales 

Black Friday

From Ronnie's Lips

It has been widely reported that President Obama has offered up benefit cuts to Medicare, Medicaid and Social Security in previous deficit negotiations. And while President Obama has said he'd veto any extension of the Bush tax cuts for the wealthy, he has caved on important issues in the past.

So we need to keep pushing and tell President Obama to draw a line in the sand. To do this: sign the petition.

Landmark Ruling, "Dark Money" group tied to Citizen United ordered to reveal its donors.

As Democracy Now! has previously reported, one of every four dollars spent on the campaign ads, direct mail and robocalls that target voters now comes from so-called "dark money" organizations. The IRS lets these groups keep their donors secret because they are considered "social welfare non-profits." But that changed this past Friday when a Montana judge ordered the release of one such group’s bank records. An investigation had found that Western Tradition Partnership may have misled the IRS about the extent of its political activities, and that citizens have a right to know where its campaign cash was coming from. The group is known for bringing a lawsuit to the Supreme Court that successfully challenged Montana’s ban on corporate spending in elections, and the resulting ruling extended the court’s Citizens United decision to include all 50 states. Friday’s ruling marks the first time a court has ordered a dark money group’s donors to be made public, and some say the judge’s move could serve as a warning to similar organizations.

Democracy Now!

Who's Behind the Hit Pieces?

Via Councilwoman Teresa Barth's Newsletter today:

As predicted, the smear campaign rolled into high gear this past week. 

First there was a mailer in support of Stocks & Muir and 

blasting Shaffer and Kranz 

Return Address: 

North County Taxpayers for Responsible Government 

330 Encinitas Blvd #101 

Encinitas, CA 

Treasurer: Nancy Haley 

She is also the treasurer for Stocks & Muir 

Then there was the 

"Don't let Shaffer and Kranz Occupy Encinitas" 

Sent out by the San Diego County Republican Party 

who endorsed Forrester, Muir and Stocks 

Followed by a vicious character assignation against Tony Kranz. 

 Sent out by San Diego County Voters for Progress and Reform 

 7185 Navajo Rd, Suite P San Diego, CA

Treasure: C. April Boling 

She is also the Treasurer of the Lincoln Club 

 Muir, Forrester and Stocks were endorsed by the Club. 

 Who's the Lincoln Club? 

 Who supports Prop K - Elected Mayor? 

Bond, Muir & Stocks

Editor: Thank you Councilwoman Barth for a thorough summary that is well documented.  We appreciate this as we appreciate the kind of thoroughness you devote to your service on the city council.  My wish is this. You will be joined on the dais with two equally competent council members like Shaffer and Kranz to get real work done - rather than special interest empire building. And I would also wish that paid journalists would present vital summaries like this to the public, rather than waiting for information from elected officials to be handed to them. 

Decorum? Deplore Him?

Trust that the general voting public knows how they'd like to be treated at city council.

Last council meeting's public meeting on Encinitas Ranch Golf Authority (ERGA). 

Some clips.

Stop Clapping - Tinker Bell Long Since Died

Update at end
Confidence fairy regulated financial indebtedness to create a stable economy has failed over and over around the world.  It seems child-like to ignore. What worked prior to the last decade can no longer be considered the way of the future.

This week's reading brought some insight about the difficulty so many have in grasping this reality, while they keep clapping, like boosters for more and more debt to magically solve indebtedness as Jerome Stocks proclaims financial acumen, can be attributed to one's world view.

The agenda for this week makes this timely. Wednesday's City Council Meeting will be jammed full of confidence fairy predictions based on realities that can in no sound way be counted on to apply. Add to the fairy analogy the demand for us to trust that magical agreements, trust and assurance happen just out of our sight at City Hall where bankers and developers are special guests. We can only speculate about revenue or investment planning. Here are the two big agenda items:

• Public Hearing authorizing the issuance of up to $8,000,000 of lease revenue bonds ("the 2012 Bonds") related to the proposed capital improvements to the Encinitas Community Park site and the Moonlight Beach site. 

• Public Hearing authorizing the issuance of up to $1,000,000 of Encinitas Ranch Golf Authority Revenue Bonds related to proposed capital improvements to the Encinitas Ranch Golf Course.

 Of course world view affects more than economics. It shapes one's sense of justice, quality, success and the future. The quote below could fit for a huge swath of Encinitas citizens. It's taken from a piece by Jeremiah Goulka.

"We believed in competition and the free market, in bootstraps and personal responsibility, in equality of opportunity, not outcomes.  We were financial conservatives who wanted less government. We believed in noblesse oblige, for we saw ourselves as part of a natural aristocracy, even if we hadn’t been born into it.   [ . . .] We were tough on crime, tough on national enemies. We believed in business, full stop."

According to the narrative shared by Goulka, his worldview was particularly challenged in the last decade when his work took him as a lawyer deep into Dept. of Justice work, FEMA work, war zones and more that challenged the assumptions he had always held.

Our Mayor Stocks is in no way on the same trajectory of self-examination and re-evaluation of this author. Just revving his engine for full campaign mode, he is the antithesis as a major myth maker in creating the shiny patina of false security in refusing to broach difficult topics or acknowledge any weakness in any way - ever.

No, the author's narrative is the one hinted by Encinitas people at informal gatherings, on the streets, at meetings and in door to door interactions.  And there are no doubt hundreds who are questioning all alone and telling no one.  It is painful to question all that you have believed.

At the end of his article is this revelation:

No one wants to feel like a dupe. It is embarrassing to come out in public and admit that I was so miseducated when so much reality is out there in plain sight in neighborhoods I avoided, in journals I hadn’t heard of, in books by authors I had refused to read.  [ . . . ]

Others do because they grew up in families that simply got it. I married a woman who grew up in such a family, for whom all of my hard-earned, painful “discoveries” are old news. Each time I pull another layer of wool off my eyes and feel another surge of anger, she gives me a predictable series of looks. The first one more or less says, “Duh, obviously.” The second is sympathetic, a recognition of the pain that comes with dismantling my flawed worldview. The third is concerned: “Do people actually think that?”

Delusions are not a substitution for deliberations.

Update: Sunday night a reminder of a particularly relevant Our Mayor post submitted last April with this same theme. Also, search on financial label and many more posts will be listed. This is not our first debt rodeo.

Myths Encinitas

Tree City USA, Urban Forest Policy and other designations claimed by the Encinitas City is largely mythical. It just doesn't seem like Engineering got the memo from Public Works (and clearly unfamiliar with the Environmental Commission).  Public Works was in charge of writing the manual on Encinitas Urban Forest, including heritage trees.  Engineering is pretty much robotically wired to road code dimensions and are rarely swayed by real life or logic.

This particular week we have the perfect storm of empty rhetoric regarding city council policies actually effectively connecting and engaging various departments' supposed commitment to Encinitas community character, Encinitas trees and Encinitas Urban Forest.

Why? The agenda for Wednesday's meeting agenda includes the merging of two department director positions into one. Consolidation of the positions of Director of Engineering and Director of Public Works into Director of Engineering and Public Works. We question the success of that merger in the current culture at city hall that does not celebrate connectivity, collaboration or cooperation.

Meanwhile, another agenda item:
Public Hearing of the appeal of Engineering conditions for public improvements adjacent to 1794 Crest Drive. Reading through the appeal makes the many layers of trees, street standards, infrastructure, community character and financial hardship a complex web of assumptions, justification and a fair dose of misinterpretation.  Behind it all is money (see Growth: Ponzi Scheme series) and an authoritarian adherence to codes as power.  It's how it sounds to this reader. The appellant's challenges the reality of the city plan for a trail throughout the Crest Drive built out area will ever happen, yet alone that harms no trees. Another mythical notion of shared goals amongst departments with a council majority uninterested in making these connections.

It is very difficult to ascribe "good faith" to our city departments dealings with single family residents, given a long history of inconsistent treatment of resident requests. Indeed, there is a very real reluctance of homeowners, architects and contractors to come forward with individual stories because of fear of retaliation in their properties and businesses.

It's vital we all keep hearing, learning and sharing our preferred city government ideals.  Planting trees should be more than a political photo op. There are  fantastic examples all around us, and some close by, of a better way to deal with sincere connections to our public spaces, our trees and our private property and business owners.  These magnificent pines on Crest Drive and all the other vegetation is of upmost importance in this time of drought, climate change, erosion, need for sustainability and economic depression.

Andy Lipkis, well known TreePeople founder, known to many in Encinitas speaks here about  our need for functioning community forests as acupuncture used strategically to heal; for our watersheds, to create oxygen and filters for our air and coolants and . . . well start at 6:00 to dive right into it. Enabling community is at the heart and soul of this for success.  We could have this kind of thinking on our city council.

Love the part about we Americans just hate to be told what to do, but when informed we want to help.

Crest Drive is yet another opportunity for our city council to seek policy for connections and restoration rather than piecemeal acquisition of scattered contract work for favored vendors. After Wednesday there will only be about a half dozen council meetings until the election. Time to envision change and campaign for it too. 

FIRE

Finance + Insurance + Real Estate = FIRE

"Thirty years ago we could still write of a dichotomy– industry versus finance—and categorize GE and GM as industrial firms, with Goldman Sachs as a financial firm. Those days are gone, with GM requiring a bail-out because of its financial misdealings (auto production was just a sideline business used to burden households with debt owed to GMAC, the main business line), and Goldman Sachs buying up all the grain silos to run up food prices in a speculative bubble. Obamacare simply fortifies the Vampire Squid’s control of the healthcare industry as it inserts its strangling tentacles into every facet of life. 

Food? Financialized. Energy? Financialized. Healthcare? Financialized. Homes? Financialized. Government? Financialized. Death? Financialized. There no longer is a separation of the FIRE (finance, insurance, and real estate) and the nonFIRE sectors of the economy. It is all FIRE."

This excerpt is from a post authored By Professor L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City, Research Director with the Center for Full Employment and Price Stability and Senior Research Scholar at The Levy Economics Institute. It originally appeared at Economonitor's Great Leap Forward Blog.

What seems near criminal in Encinitas is that seeming lack of cognition from the council majority and the city staff of how seriously complicit and corrupt the FIRE forces are in the global financial crisis the envelopes our little Encinitas community.  The public keeps trying to confront the city's vulnerabilities in unfunded liabilities with pensions, municipal bonds, the recent revenue lease bond scheme and more and they get bupkus in response.

It is as though Jim Bond rambling and scoffing in his revisionist reveling at each meeting, or Jerome Stocks being sneeringly superior when any financial scheme is questioned, or Mark Muir mouthing naive observations for the camera or Kristin Gaspar rifling through her pink-highlighted spreadsheet notes are supposed to give any well-read adult in Encinitas confidence.

Of course the majority strategy always was and will be a deep commitment to public apathy and indifference.  They are loyal party vassals who have followed their own leaders ahead in the clown car. They also can count on the 24% clueless vote who just need to hear some dog whistle words to vote against their own best interests.  The council majority serves the tiny group where their funding comes from (and it's primarily out of town and large scale, corporate) and these donors are concentrated as players with FIRE where the money lives. The council encumbants' role is to make a display of caring about public intent and no more. For the mayor even a showing of that it is stretch.

Professor Wray begins his post with this bit of background.

As the Global Financial Crisis rumbles along in its fifth year, we read the latest revelations of bankster fraud, the LIBOR scandal. This follows the muni bond fixing scam detailed a couple of weeks ago, as well as the J.P. Morgan trading fiasco and the Corzine-MF Global collapse and any number of other scandals in recent months. In every case it was traders run amuck, fixing “markets” to make an easy buck at someone’s expense. In times like these, I always recall Robert Sherrill’s 1990 statement about the S&L crisis that - “thievery is what unregulated capitalism is all about.” 

After 1990 we removed what was left of financial regulations following the flurry of deregulation of the early 1980s that had freed the thrifts so that they could self-destruct. And we are shocked, SHOCKED!, that thieves took over the financial system. 

Nay, they took over the whole economy and the political system lock, stock, and barrel. They didn’t just blow up finance, they oversaw the swiftest transfer of wealth to the very top the world has ever seen. They screwed workers out of their jobs, they screwed homeowners out of their houses, they screwed retirees out of their pensions, and they screwed municipalities out of their revenues and assets.

A very despairing perspective, it's agreed.  Here is the challenge.  Are there enough people in Encinitas willing to hear the new voices like Lisa Shaffer and Tony Kranz? We are lucky enough to have these two dedicated citizens running against these entrenched FIRE breathers?  The FIRE folks will throw a lot of money at the boys to buy this election like they bought a seat at the last election.  Only engaged people, people fired up will best that kind of an undemocratic approach.  Fighting FIRE with our own kind of fire.

Myths Encinitas

Although covered elsewhere, the myths of ERGA - Encinitas Ranch Golf Authority - need to be aired in an election year where so many other financial fantasies are being unveiled.

Over the last several years the story of why the ERGA agreement needs to be diddled with changes every time these developers and players approach the podium.

And, something missing from every council meeting, local press story or blog flinging scattered bits and pieces at us all is this, what about the management of this golf course. What about J.C. Golf and their failure of management?  Isn't this a first step in assessing performance in assigning accountability?

It was and is a myth that this is a well run facility that was without financial failings.  More importantly, this myth was known and kept afloat - as all records now indicate.

One only has to look at the condition of the property and holdings and compare it to what is being charged to golf or other services.

Here is a look back at some the archived clips at encinitasyouneedus.  Original meetings can be accesses for every speaker and arguments.

May 19, 2019 - Stocks pushes hard to "re-open" a 10 year old contract, lots of fact free assurances from the crony crowd that everything is looking great. Request from Council-woman Barth and Sheila Cameron for financial back-up. (Spoiler alert for the next clips following this, doesn't happen.)

 

In June an almost comical runaround from Jay Lembach in response to Councilwoman Barth's questions about obligations to ERGA's debts.

I told you so moment. Encinitas asked to take a preemptive hit for golf course.

Some history . . . Emphasis on how the developer, Carltas benefits above all. Phony baloney stuff criticized.  Risk taken in 1996, privatized gain is now looking for a socialized cost.  It is essentially a bail out.  Why didn't they just admit the truth? Request for audit . . .

According to Mary: A Short of History of Encinitas Crony Capitalism

Myths Encinitas

The Hall property mythologies are some of the longest running in Encinitas history - almost half of the 26 years.  Just in the last week the Jerome Stocks and Jim Bond were mouthing the same revisionist history at the big special city council meeting on July 11.

Yesterday's Our Mayor post provides 8 clips dating from 2008. Nobody is against the park or wants to delay the park.

Prior to Our Mayor blog, the Leucadia blog did some really great posts on various Hall property actions, reactions, lies and community commentary.  A search of the blog with "Hall Propoerty" brings up a non-chronological list with 32 entries, going back to 2006.

If one would read all of these posts with links, comments and view just these clips presented yesterday, you can get an appreciation for the weary sound of Jerry's Sodamka's voice in the following clip. He spoke at last Wednesday's meeting to go on video record that yet again the city was not accurately reporting history and was stretching credible limits with the financial package. We'll honor his desire to go on record by making it just a bit more public than being buried in the city video archives. Jerry is one of Encinitas finest myth busters. And his financial concerns are still valid despite the approval vote Wednesday for the finance concepts.

According to Mary: Pension Debt Devil

Bamboozled!

FACTS YOU SHOULD KNOW

·         The Hall property park will cost $19.3 million to build. The existing funds are only $7.8 million eleven years after purchase of the property.  Last year these funds were said to be $8-$9 million.

·         The Moonlight Beach renovation will cost $4.8 million. The existing grant funds are $1.9 million.

·         There isn’t sufficient funding to build the Hall property park and renovate Moonlight Beach.

The City has cobbled together a scheme that pushes fiscal limits and will place your City in a precarious financial position. The City proposes to do the following:

·         Reallocate funds from 15 other capital improvement projects and two other fund balances.

·         Borrow money using Lease Revenue Bonds that require a revenue stream.

FACTS YOU SHOULD KNOW ABOUT REALLOCATION

·         Reallocation will strip other project funds bare with no easy way to replenish them.  Open space acquisition, drainage systems, fire stations, and other civic projects will all be imperiled. 

·         Shifting of priorities will yield an additional $7 million for the Hall Park. A shortage of $4.5 million for the Hall Park and a shortage of $2.9 million for Moonlight Beach renovation will still remain.  THE REMAINDER WILL HAVE TO BE BORROWED.

FACTS YOU SHOULD KNOW ABOUT USING LEASE REVENUE BONDS

·         They only require a council majority to approve and release. The public has no vote.

·         Projects must generate a revenue stream to make the yearly bond payments.  Neither project produces a revenue stream.  In fact, the Hall property park will cost an extra $0.5-$1 million in maintenance per year.  WHERE WILL THE MAINTENANCE MONEY COME FROM?

·         The bond repayment can only come from the General Fund.  IS PUTTING ADDED STRESS ON THE ALREADY TIGHT BUDGET A WISE THING TO DO?

FACTS YOU SHOULD KNOW ABOUT USING THE OPTION OF GENERAL OBLIGATION BONDS

·         Yearly assessment on every property tax bill in the City

·         Lower interest rate and guaranteed funding

·         No strain on the General Fund and no stripping of funds for other essential projects

·         Voters would decide the prudence of the projects.

ADDITIONAL VITAL FACTS

·         Toxic Soil: The County of San Diego Department of Environmental Health has mandated the City excavate the Hall property and bury on site approximately 46,000 cubic yards of contaminated soil with continual testing to make sure the land will be safe to play on.  The County WILL NOT be sending any inspectors to ensure compliance. WHO WILL ENSURE THE SOIL IS SAFE FOR OUR CHILDREN?

·         Air Contamination:   Recent research on air contamination indicates that fine particulate matter from the adjacent freeway to the Hall property can be a serious health hazard, especially to young children engaged in strenuous activity.  Air monitoring equipment should be installed for everyone’s safety after park completion.  WHY HAS THE CITY REFUSED TO EVEN DISCUSS THE MATTER?

ASK YOURSELF THESE QUESTIONS:

·         SHOULD WE JEOPARDIZE THE FUNDING OF OTHER VITAL PROJECTS?

·         WILL THE CITY HAVE SUFFICIENT FUNDS FOR UNEXPECTED EXPENSES?

·         SHOULD WE BORROW ON OUR CHILDREN’S FUTURE?

CORRECTION: 46,000 cubic yards not 46,000 cubic feet as initially posted

Myths Encinitas

The myth of unlimited growth as fiscal strength  is directly related to the crash course, The Growth Ponzi Scheme featured these last four days at Encinitas You Need Us.  Tomorrow will be the final part 5. This guest series gives a narrative that people without financial expertise can use to be able to talk about city finances.

Part 1: The Mechanisms of Growth - Trading near-term cash for long-term obligations.
Part 2: Case studies that show how our places do not create, but destroy, our wealth.
Part 3: The Ponzi scheme revealed - How new development is used to pay for old development.
Part 4: How we've sustained the unsustainable by going "all in" on the suburban pattern of development.
Part 5: Responses that are rational and responses that are irrational.

The Growth Ponzi Scheme 

by Thomas Marhon

We often forget that the American pattern of suburban development is an experiment, one that has never been tried anywhere before. We assume it is the natural order because it is what we see all around us. But our own history — let alone a tour of other parts of the world — reveals a different reality. Across cultures, over thousands of years, people have traditionally built places scaled to the individual. It is only the last two generations that we have scaled places to the automobile.

How is our experiment working?

At Strong Towns, the nonprofit, nonpartisan organization I co-founded in 2009, we are most interested in understanding the intersection between local finance and land use. How does the design of our places impact their financial success or failure?

What we have found is that the underlying financing mechanisms of the suburban era — our post-World War II pattern of development — operates like a classic Ponzi scheme, with ever-increasing rates of growth necessary to sustain long-term liabilities.

Since the end of World War II, our cities and towns have experienced growth using three primary mechanisms:

• Transfer payments between governments: where the federal or state government makes a direct investment in growth at the local level, such as funding a water or sewer system expansion.
• Transportation spending: where transportation infrastructure is used to improve access to a site that can then be developed.
• Public and private-sector debt: where cities, developers, companies, and individuals take on debt as part of the development process, whether during construction or through the assumption of a mortgage.

In each of these mechanisms, the local unit of government benefits from the enhanced revenues associated with new growth. But it also typically assumes the long-term liability for maintaining the new infrastructure. This exchange — a near-term cash advantage for a long-term financial obligation — is one element of a Ponzi scheme.

Encinitas Illustration 

Jerome Stocks State of City, 4/18/12 clip

Returning to guest post . . .

The other is the realization that the revenue collected does not come near to covering the costs of maintaining the infrastructure. In America, we have a ticking time bomb of unfunded liability for infrastructure maintenance. The American Society of Civil Engineers (ASCE) estimates the cost at $5 trillion — but that's just for major infrastructure, not the minor streets, curbs, walks, and pipes that serve our homes.

The reason we have this gap is because the public yield from the suburban development pattern — the amount of tax revenue obtained per increment of liability assumed — is ridiculously low. Over a life cycle, a city frequently receives just a dime or two of revenue for each dollar of liability. The engineering profession will argue, as ASCE does, that we're simply not making the investments necessary to maintain this infrastructure. This is nonsense. We've simply built in a way that is not financially productive.

We've done this because, as with any Ponzi scheme, new growth provides the illusion of prosperity. In the near term, revenue grows, while the corresponding maintenance obligations — which are not counted on the public balance sheet — are a generation away.

In the late 1970s and early 1980s, we completed one life cycle of the suburban experiment, and at the same time, growth in America slowed. There were many reasons involved, but one significant factor was that our suburban cities were now starting to experience cash outflows for infrastructure maintenance. We'd reached the "long term," and the end of easy money.

It took us a while to work through what to do, but we ultimately decided to go "all in" using leverage. In the second life cycle of the suburban experiment, we financed new growth by borrowing staggering sums of money, both in the public and private sectors. By the time we crossed into the third life cycle and flamed out in the foreclosure crisis, our financing mechanisms had, out of necessity, become exotic, even predatory.

One of humanity's greatest strengths — our ability to innovate solutions to complex problems — can be a detriment when we misdiagnose the problem. Our problem was not, and is not, a lack of growth. Our problem is 60 years of unproductive growth — growth that has buried us in financial liabilities. The American pattern of development does not create real wealth. It creates the illusion of wealth. Today we are in the process of seeing that illusion destroyed, and with it the prosperity we have come to take for granted.

That is now our greatest immediate challenge. We've actually embedded this experiment of suburbanization into our collective psyche as the "American dream," a non-negotiable way of life that must be maintained at all costs. What will we throw away trying to sustain the unsustainable? How much of our dwindling wealth will be poured into propping up this experiment gone awry?

We need to end our investments in the suburban pattern of development, along with the multitude of direct and indirect subsidies that make it all possible. Further, we need to intentionally return to our traditional pattern of development, one based on creating neighborhoods of value, scaled to actual people. When we do this, we will inevitably rediscover our traditional values of prudence and thrift as well as the value of community and place.
Strong Towns   www.strongtowns.org

This Wednesday - Encinitas Financial Model as spelled out above.

The timing of this relates to the upcoming council meeting this coming Wednesday, July 11, being held at Encinitas Community Center (Senior Center) at Oakcrest & Balour. The agenda available here includes the agenda packet prepared by city staff.

The financing schemes to pay for major capital improvement projects, Hall property park and Moonlight beach is a real shuffle. There is a lot of Peter paying Paul switches and big debt commitment in these staff recommendations:

1. Reallocate General Fund Capital Improvement Project Funding - 7.0 million to projects.
2. Authorize proceeding with financing up to $8.0 million for projects.
3. Adopt Resolution amending the Capital Improvement Program Budget.
4. Award of contracts for Hall: $2,258,767.85 for the project.
5. Award of contract for Moonlight State Beach Improvement Project: $595,209.

Did we forget to mention how important it is to go to this meeting? Also, stay for item #2 - the great mayoral robbery - an ongoing fetish for Mayor Stocks.

Place Making and Attracting Value - Rethinking Encinitas

Let's put a face to the engineer who gave us his confession in yesterday's post, Charles Marhon of Strong Towns. 

Myths Encinitas

This Monday's edition is from the Institute for Local Self-Reliance, with thirty-five years of community strengthening research behind them. Fact sheet presented in full. This refutes the myths our mayor and the council majority and all city planning has bought and promoted as fiscal strength. It can't undo the reality of a Wal-Mart opening this week, but it can change some thinking for our fiscal planning with a new council after November.

Five Myths About Big-Box Retail

MYTH: Big-Box Stores Create Jobs

FACT: Studies by independent economists show that big-box stores eliminate more retail jobs than they create.

A recent study examined 3,094 counties across the U.S., tracking the arrival of new Wal-Mart stores between 1977 and 2002. The study, conducted by Univ. of California economist David Neumark, found that opening a Wal-Mart store led to a net loss of 150 retail jobs on average, suggesting that a new Wal-Mart job replaces approximately 1.4 workers at other stores. (The Effects of Wal-Mart on Local Labor Markets, January 2007).

The reason for the overall decline is that a new Wal-Mart store does not increase the amount of money that residents have to spend. Sales gains at these stores are invariably mirrored by a drop in revenue at existing businesses, which then must down-size or close. The job losses are larger than the gains because Wal-Mart accomplishes the same volume of sales with fewer employees.

Although similar studies have not been done of other big-box retailers, it's likely that they also have either a negative or no impact on employment because the underlying dynamics (i.e., no increases in consumer spending) are the same.

MYTH: Big-Box Stores Boost Tax Revenue

FACT: The tax benefits of big-box stores are negated by the cost of providing public services to these developments and declining tax revenue from existing commercial districts.

Big-box development creates substantial public costs. These sprawling stores are not efficient users of public infrastructure. Compared to traditional, compact business districts, they require longer roads, more road maintenance, additional miles of utilities, and more fire and police time.

One case study in Barnstable, Mass., found that the annual cost of providing city services to traditional downtown and neighborhood business districts was $786 per 1,000 square feet. Big-box stores were 30% more costly, requiring $1,023 in services per 1,000 sq. ft. (Tischler & Associates, Fiscal Impact Analysis of Residential and Nonresidential Land Use Prototypes, prepared for the Town of Barnstable, Jul. 1, 2002.)

In addition to incurring new costs, cities that approve big-box development often experience a decline in property and sales A project of the Institute for Local Self-Reliance tax revenue from existing neighborhood and downtown business districts, as well as older shopping centers. As these areas lose sales and experience vacancies, the value of property declines and with it, the property tax revenue. Sales tax revenue also falls. One study of 116 cities in California found that, in all but two cases, the presence of a big-box store did not correspond to increased sales tax revenue. (Bay Area Economic Forum, Supercenters and the Transformation of the Bay Area Grocery Industry: Issues,Trends, and Impacts, 2004, 74-81)

MYTH: Big-Box Stores Grow the Economy

FACT: Trading independent retailers for big-box chains shrinks the volume of activity in the local economy.

For every $100 they receive in revenue, locally owned businesses hire more local workers, purchase more goods and services from other local businesses, and contribute more to local charities than their big-box counterparts. When chains displace local businesses, it results in an overall loss of economic activity, not a gain.

A 2004 study conducted in Chicago analyzed ten locally owned restaurants, retail stores, and service providers and compared them with chains competing in the same categories. The study concluded that every $100 spent at one of the independent businesses created $68 in additional economic activity in the city, while spending the same amount at a chain only generated $43 worth of local impact. (Civic Economics, The Andersonville Study of Retail Economics, 2004.)

One of the main reasons for the difference was that the local retailers bought more goods and services from other local businesses. They did their banking at a local bank. They hired local accountants, web designers, and other professionals. They turned to a local print shop for their printing, and they advertised in local publications. The chains had almost no need for these local services and spent relatively little in the city.

A consequence of this is that even modest shifts in the mix of local and non-local businesses in a community can have significant economic ramifications. A case study in Kent County, Michigan, estimates that the region would gain 1,600 new jobs, $140 million in new economic activity, and $53 million in additional payroll if residents shifted 10% of their spending from chains to local businesses. A shift in the opposite direction — more spending at chains — would cause equivalent economic losses. (Civic Economics, Local Works: Examining the Impact of Local Business on the Western Michigan Economy, 2008.)

MYTH: Big-Box Stores Bring Competition and Consumer Choice

FACT: Big-box stores often displace numerous small and mid-sized stores, leaving fewer shopping options and less competition. 

An average Wal-Mart or Target supercenter is nearly four football fields in size (190,000 square feet) and captures about $80 million a year in spending. To understand how large that is, consider that it would take 35,000 people making 25% of all of their retail purchases, from groceries to appliances, at that one Wal-Mart store. To take another example, the average 120,000-square-foot Lowe's captures $35 million a year in sales. That's equal to the total hardware/building materials spending power of 37,000 people.

Most communities, even fast-growing ones, cannot absorb a store of this scale without sizable revenue losses to existing businesses, including both locally owned stores and competing supermarkets and shopping centers. Part of the reason these companies build such large stores is that they leave little room in the market for other businesses. As competing stores close, residents are left with fewer choices. Many towns and neighborhoods now depend on a single big-box store for many types of goods, virtually eliminating competition. Once they attain a dominant share of the market, these retailers may raise prices. One study compared the cost of 54 grocery items at 11 Wal-Mart supercenters in Nebraska and found that the total varied by more than 13 percent. Some of the stores with the highest prices were in areas that lacked competing grocery stores.
(Hometown Merchants Association, Impact of Supercenters on Nebraska Economy, April 2004.)

A growing number of communities are deciding that a better way to ensure competition is to have numerous small and mid-sized stores, rather than one giant superstore. One way to achieve this is to place a cap on the size of stores (for more on this see our Store Size Cap Policy Kit at bigboxtoolkit.com).

MYTH: Big-Box Stores are the Only Option

FACT: More cities and towns are saying no to additional big-box development and finding better ways to grow by creating and expanding local businesses.

Nearly 300 communities have rejected big-box proposals in the last few years, and many have adopted policies that restrict or prohibit this type of development altogether.

Far from impeding growth, these policies often attract new small businesses investment as entrepreneurs seek out viable locations. Communities can spur more small business development by revitalizing their neighborhood and downtown commercial districts, launching programs to train and finance new entrepreneurs, and developing a strong Buy Local campaign to encourage more public support for locally owned businesses.

(For more information on these strategies, see the Building Alternatives to Big Boxes section at bigboxtoolkit.com.) This work is licensed under a Creative Commons Attribution- Noncommercial-No Derivative Works 3.0 United States License

Myths Encinitas

May we please, my dear neighbors, finally once and for all bury the trope that the council majority is fiscally conservative? And as this whole clip and many more demonstrate we have a pretty clear indication the council majority is not now and maybe never was fiscally responsive.

The opening of this February 17, 2010 video clip includes Councilwoman Barth's actual example of fiscally conservative governance with her motion to freeze all pay raises for the council members at the onset of this nation's economic recession that began the previous year. In a rare win, this motion carried despite Houlihan's puzzling vote switch.

Beginning at 1:18 is the discussion of then City Manager Phil Cotton's more than 10% raise. Remember, Phil Cotton is retired military drawing a pension and is over retirement age.

Judge for yourselves. Is Jerome Stocks' argument one of a fiscal conservative or even a fiscally responsive leader?

Myths Encinitas

Myths Encinitas shares a gigantic myth with the rest of country.  So today this should realistically be titled, Myths US of A.

Myth: If taxes on the rich go up, jobs will go down.

It's somewhat surreal to have a video saying this obvious myth be considered controversial.  The TED talk below became the news chum in the water recently in what seemed like manufactured news at Time and Huffington Post and Washington Post, etc., etc., in the corporate news fustercluck.

Said to be too outrageous, or was it simply not that innovative and worthy of the selection for TED?  Who knows.

What's important is simple reality has broken through the fog of the corporate media and a capitalist is speaking.  Enjoy.