Answer: It won't. I predict at some point, Baldwin Park will file bankruptcy. What the current corrupt council members and administrators are hoping is that they won't be around when it happens.
$177 million is a lot of money. With that amount of money, we could send 3,400 kids on a full scholarship to a state school. That's 3,400 children that could become doctors or lawyers or engineers or scientists. That's 3,400 families that could get out poverty. But nope, given the previous pattern of Baldwin Park, all those hundreds of millions of dollars will be gone.
See; that's why corruption is such an important topic. Who is more important: A few council members and directors or 3,400 young adults for future? Corruption, robs those 3,400, or all of us, to make a few, wealthy at the expense of our entire community.
Of the current $115 million that's owed, $51 million is owed to the pension fund CalPERS. The City collects money from their employees and is supposed to put given that money to the CalPERS organization for them to invest, so that they could have money for retirement.
But every year, Baldwin Park just pays interest on what it owes CalPERS. So, if you're an employee of Baldwin Park, you know what that means? They've been taking your money every paycheck and spending your money, and not investing it for you.
Doesn't that worry you, just a little bit about what's going to happen to your retirement? The question is how come the employees aren't asking where their retirement money, taken from their paychecks, actually went?
The rest of the current outstanding debt was in the form of $64 million in municipal bond loans to do various projects in the city, since around 1990. I'm not sure where all that money went, but to me, all that we have to show for it is a useless parking structure.
But to keep bond investors and employees happy, they have to paint a rosy picture of their actual financial health. But is it real? Are they actually cooking the books?
There are some concerning red flags. The first one is that Rose Tam in 2016 represented that Baldwin Park actually has around $38.7 million in savings. $22 million, the bulk of that is held in Baldwin Park's Successor Agency. But according to sources, the Baldwin Park Successor Agency doesn't have that money, and instead made a promise to pay that money back someday, one day to the city.
But they don't have the money to pay the city. She also says that the City has $14.2. million in cash. But when I inspected some of their bank accounts, I remember there only being around $6 to $8 million. Where did this extra $6 to $8 million come from?
The second red flag is that the City doesn't have an independent audit committee. The same city council members sit on the board of the audit committee. This an obvious conflict, but the most probable reason is so that someone independent can't figure out what's really happening with the finances. It's like foxes guarding the hen house, which is exactly what they want.
The third concerning red flag is that the city refuses to answer questions about their own finances.
So, I asked questions to City Manager Shannon Yauchtzee and Finance Director Rose Tam. You would think that a citizen asking about the city's finances is a safe question. But not in Baldwin Park. Yauchtzee forwarded the email to the City Attorney Robert Tafoya.
By email - immediately Tafoya responds. He alleges he researched it (within the short time that Shannon forwarded the email) and writes "There is no such law [to give information about the finances], and you know it. . . . The City is closing this issue out."
I responded back and told him such law does exist. And I wonder if it's the city's final and official answer is to close out the issue.
Instead, I go back to the Finance Director and City Manager and ask them my questions again. Tafoya responds for them and writes: "[T]he information being demanded by Mr. Cook is not mandated to be disclosed by federal or state law. . . . he [Mr. Cook] likes to be an antagonist. Please disregard Mr. Cook’s latest message to you."
(I guess asking about the city's finances make you an antagonist now.)
Not liking me asking about the city finances the city attorney then writes: "Paul, you should avoid those dangerous places. If something happens to you, who will save the world?"
(Is that a threat?)
He then adds: "Paul, you are sooooo funny and I don’t think you even try. I really enjoy receiving and sending emails to you because I get to bill and I get a few laughs along the way. Can you please keep sending these emails so that I may respond?"
All this, just for asking some simple questions about how the City is calculating how much it actually has. The City has still yet to respond to the actual questions of their finance.
What the City Council and administrators do appear focused on, however, is going out for more loans and getting the Chief of Police's incredible contract re-approved.
One, as of August 15, 2018 - the City asked to get $62 million in loans. $55 million of those loans are allegedly to pay CalPERS back, but if they owe $51 million, why did they need to take an extra $4 million out? Two, the Chief of Police wants to renew his sweetheart contract that says he can only be fired if he commits a rape, murder, or other kind of felony.
If you haven't figured it out - it appears that the City took the pension money, co-mingled it with the General Fund, and used the pension money to pay for their operating expenses - like getting bigger raises every year. In short - was your pension money taken to pay Carrillo and Taylor and Yauchtzee more? Very likely.
Now that we've exposed what these crooks have been doing in Baldwin Park, they're alleging they're going to borrow money to pay the pensions without intending to ever pay back the bond underwriter or bond investor. (Personally, I don't think they'll be paying off all the money they owe Cal-PERS.) In any event, the whole plan sounds a lot like robbing Paul (the bond investor) to pay Peter (the employee's pensions).
What does the future hold for Baldwin Park, the employees, the bondholders, and citizens?
Well, just look at Detroit or Stockton, both who filed for bankruptcy. In Detroit, after bankruptcy, bondholders got back 30 to 40 cents for every dollar . And for employees, your pensions could be slashed from 10% to 34% (maybe more), and healthcare may not be covered. For us, the residents, we will most likely lose key services, like having a police department.
I have some takeaway points and recommendations. I wrote about organized crime groups stealing our money. It appears that they're not only taking in the revenue generated by taxes, but squeezing even more money from pension checks and loans.
The second takeaway point is that it should be illegal for cities to borrow so much money. It's a form of taxation without representation, because we're indenturing the next generation into debt, and they had no say in the matter, because they were too young to vote.
(Remember that the American Revolution was caused because King George. He wanted the colonists' money, but the colonists had no say in how that money was spent, because they were in America and not represented in London. When politicians, who have a short-term office limit, bonds the taxpayer into debt that's longer term than their office limit, that's another form of taxation without representation.)
I predict that at some point the city will have to file bankruptcy. Bankruptcy is in line with the strategy of these crooked council members and directors - who will have taken the hog's share and be gone without any accountability.
A combination of two events will trigger a bankruptcy. When 50% to 70% of the city's budget goes out to pay (1) bond interest and (2) pensions, it will have to file bankruptcy.
The main recommendation depends on who you are. If you're an investor - stay away from Baldwin Park's municipal bonds. If you're an employee - demand answers. Every time, people like Carrillo, Tafoya, or Taylor give themselves a higher raise, that's your pension money they're taking away from you. And if you're a regular taxpayer - like me - demand accountable and prosecution. If you're a policy maker, administrators have to be held responsible for misrepresenting numbers or not being forthcoming about the actual finances.
Hans Christian Anderson was right: The Emperor has no clothes. Baldwin Park really doesn't have any money; they've taken it all, and now we live on borrowed time and money.
|Is this how Baldwin Park will look in the future?|