Greig Smith's Finance Department
Walter Moore's latest column details a scheme by Councilman Greig Smith to ask the City to issue bonds for a PRIVATE school to be built in his district. Walter's entire column is here, below is the excerpt about Smith's latest activities:CITY HALL LOVES TO PLAY "INVESTMENT BANKER" WITH YOUR MONEY. The difference between the public sector and the private sector is . . . apparently non-existent if you're on the L.A. City Council. Here's an item from the L.A. Daily News of, aptly enough, April Fool's Day:
"The Los Angeles City Council agreed Friday to use its credit to issue up to $50 million in bonds for a private school in Chatsworth, which wants to expand to a second site. The 12-0 vote will benefit Sierra Canyon School, which has ambitious plans to build a 30,000- square foot high school to accommodate up to 550 more students. 'This won't cost the city anything,' said Councilman Greig Smith, who represents the area. 'The school is assuming full liability. They are just using the city's credit rating to pay a lower interest on the bonds.'"
Hey, Greig, didn't you say the same thing -- "This won't cost the City anything" -- about the Hollywood and Highland parking lot that you sunk our tax dollars into? How many millions have we lost on that dog so far? If you want to "invest" our money, get a job at an investment bank. Don't tax us, give our money to your friends, and tell us you're doing us a big favor that won't cost us a dime.
Posted by Mayor Sam @ 4/04/2006 12:06:00 AM
10 Comments:
Overall, that garage has earned the city millions upon millions of dollars of local tax increment and though it is an ugly place, it has been an amazingly effective spur for development in the L.A. area, stealing tax dollars back from West Hollywood and Pasadena.
The city never uses up all of its credit each year to do these state-authorized bonds. It really does cost the city nothing--there is no city money up front, no credit on the line, nothing. It is very different from the Hollywood and Highland garage for that matter. And unless you think that LAUSD is doing great, I'd think you would support some other options for educating our kids, Walter. Are you turning into a left-winger?
More Smith BS. This moron is up for re-election in less than a year and he is pulling this shit?
What a moron.
Here's the problem. Even if it really doesn't cost the city a dime, is this a deal anyone can get?
I just bought a new car. Could I have gotten a better interest rate if the city issued a bond for my SUV? But I haven't donated any money to any City Council members, so probably not.
It would be interesting to see how much the principals involved donated to Smith and/or other CMs.
I also question the notion of "zero cost" to the city. Typically, when you max out your credit line, it costs you more down the road. Now I know perhaps bonds are not the same as consumer debt or even bank loans, but I've got to believe that there must be some penalty of some sort if the city borrows up towards the upward max, even if someone else is paying the note.
Even if that's not the case, you can't tell me there wasn't some level of staff time expended on this project. That's costing all of us.
Sounds like a stinky deal all around.
We have watched for years as other Council Persons have pulled these stunts for their district at the expense of the Valley, who usually pay the lion share of the cost. Now Smith is trying to bring some of the bacon home to his District and thats a problem?
Why not work to expand private school capacity, according to the Mayor, who's son goes to Loyola High School, the public schools are not working.
As long as it is cost neutral, I think most folks in the 12CD will support it.
Good job Mr. Smith.
Why in the heck should the government become the financial backer of some enterprises and not others? This private school, like any private business, could go bankrupt, and then the taxpayers would be left holding the proverbial bag.
This particular school, moreover, is getting an advantage that its competitors don't have, and an advantage that other businesses don't have.
As for the claim that Hollywood and Highland has "earned the city millions and millions of dollars," please cite any source showing that it has generated more than it cost us. All the sources I found indicated that it is a money loser.
The main point, however, isn't whether a particular transaction makes or loses money. Rather, the question is why should government be engaged in investment banking at all? There is no legitimate justification, in my opinion, for welfare for the rich.
Years ago, when I was young and smart, I studied Japan's government's attempt to foster particular industries that were bound to succeed. Unfortunately, the bureaucrats were all wrong, and sunk bazillions of yen into losers. As taxpayers, we should not be subjected to that risk.
Investment banking involves risk. If Smith, Villaraigosa, et al. want to open a private investment banking firm, and solicit investments, more power to them. But in the meantime, public funds should be spent for public purposes. No more welfare for the rich.
P.S. As for the LAUSD, my proposal, way back when, was for the City to withdraw from the LAUSD and use the money to issue vouchers of about $9800 per kid to attend schools that would be licensed and regulated.
In other words, I wanted everyone to be able to send his or her children to the same kind of schools that Hertzberg and Villaraigosa sent their kids to: private schools.
But this particular transaction is not sporting, for the reasons explained above.
Walter, would you support my right to wear american flag chonies? If so I'll vote for you for mayor next time!
Let's quit using public funds for private use. Tony wants to do that too with Loyola High School, who should be using their alumni to raise the funds for their new building.
We are taxed to death, and this idiot, Smith, just wants to give our credit (barely good anyway) and dollars away to keep himself in office. Let's try harder to find people to represent us who remember why they were elected and will do the job they were hired to do.
That's the problem with this town: there's plenty of people who'll call talk shows, or piss and moan on a blog, but they won't step up to the plate and run for office.
In March 2007, half the City Council will be up for grabs. One of those seats was won last time with just 6,500 votes.
If you live in one of the even-numbered districts -- the ones that are up for election -- and you don't run for office or help elect someone who does, then don't you dare complain about how crappy this City is.
Running for office is easy: you file papers with the City Ethics Commission; you try to get publicity; you file more papers with the City Clerk; you try to get enough signatures to get on the ballot; and you try to get more publicity. People are SO GLAD to encounter a candidate who's not peddling the same old BS. The only hurdle you'll have is getting the public to know you exist.
But if you don't even try, then don't complain about the City. It's YOUR job to fix it. If you just sit around whining, you deserve what you get.
Not that I feel strongly about this or anyting....
P.S. "Anyting," of course, should be "anything."
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