ETA News Tracker

Most of Encinitas' debt has grown due to the use of lease-revenue bonding. The use of lease-revenue bonding when no external revenue source is created has been considered a poor practice by the Howard Jarvis Taxpayer Association and the San Diego Tax Fighters. More on lease-revenue bonding here.

Bton Housing Woes to Worsen

The Harvard University professor and former chief economic adviser to Ronald Reagan isn’t part of the crowd that continually forecasts doom. For two decades, he’s headed the National Bureau of Economic Research, which officially determines when U.S. recessions begin and end.

So when he spoke on Monday night at the annual dinner of the National Economists Club, a gathering of like-minded wonks, Feldstein’s grim calculations were noteworthy.

“There are now 12 million homes in the United States with a loan-to-value ratio greater than 100 percent. That’s one mortgage in four. The aggregate amount of that is some $2 trillion,” said Feldstein.

“If you look at the median (midpoint) loan-to-value ratio in that 12 million group of underwater mortgages — mortgages with negative equity — the median loan-to-value ratio is 120 percent.”

If you think the housing slump can’t get much worse, Martin Feldstein thinks both home prices and the broader economy can — and very likely will — get a whole lot worse.

[What happens when interest rates go up? Things get even worse. ]

That means about 25 percent of all U.S. mortgages exceed the value of the homes the mortgages are financing. In the case of half the homes that are underwater, homeowners are paying a mortgage that’s now 20 percent higher than the value of the home.

That’s bad — but it’s likely to get worse.

A recent report by First American Core Logic, a real estate data firm in Santa Ana, Calif., estimated that as of Sept. 30, 7.5 million mortgages, or 18 percent of all properties with a mortgage, had negative equity. The group thinks there are another 2.1 million mortgages that are within 5 percent of going underwater.

See Also: BMIT Alan Neven Calls Bottom for George Chamberlin.

UT Encinitas sued over planned park use
[excerpts with comments]

In the latest tug-of-war over the design for what will be the city's largest park, residents have sued the city of Encinitas, seeking to overturn permits issued in October.

[This recreational facility may end up being the city's largest capital project ever.]

The city purchased the land called the Hall property for $18 million in 2001.

[The city used lease revenue bonds to avoid a vote of the people regarding the debt and a plan for the park. Appraisers have come forward claiming that the city irresponsibly overpaid for the property. See the August '08 newsletter on these same issues. ].

At issue is how much of the 44 acres is devoted to sports. The plan approved by the City Council in October included five soccer fields that overlap with two baseball fields.

Families with children in organized sports leagues lobbied hard for the fields. They face opposition from neighbors in Cardiff, who formed the group Citizens for Quality of Life to advocate for fewer fields and more open space. They fear gridlock, noise from megaphones and the glare of field lights.

Mike Callies, a soccer coach, hopes the lawsuit and appeal won't mean more delays for the long-awaited park.

“They've already dragged (the debate) out eight years,” Callies said. “We're just going to continue to fight for the fields. It's in the city's hands now.”

[ Credit for delays also belongs with the city.

The city cheated public safety laws and the neighbors noticed. The city deserves some credit for the subsequent lawsuit, which ended with a judge scolding the city.

The city let their consultants stop working on the EIR for months. Only the council can take credit for that delay.

The city had to borrow just to complete the library and the city hasn’t been able to keep up with scheduled infrastructure maintenance. The city didn’t have enough extra money to responsibly finance the park’s construction.

The planning commission denied the permits. The planning commission was appointed by the council majority. The delay due to the planning commission rejection can not be attributed to the neighbors.]

On Oct. 22, the City Council voted to overrule the Planning Commission and approve permits for the park. The Planning Commission had agreed with residents who said the design was too intense. The panel rejected the plan and recommended a redesign with one fewer soccer field, wider buffer zones and limited night lighting.

Links:
Five for Kids
Friends of the Park
ECC Newsletter (page 7)

UT Millions for special projects might end
Larry Stirling, a former judge and state senator, said the program should be eliminated because it is basically a “slush fund” for the supervisors. It especially irks him, Stirling said, when supervisors' names pop up on donor lists and plaques for organizations, such as the San Diego Opera, when the money came from taxpayers.

“I object to the entire notion that the board splits up taxpayer money and then gives each . . . (supervisor) a blank check to go around buying support throughout their districts,” Stirling said.

See Also: Pam Slater Pays for Go Go Dancers with Public Funds

Supervisor Slater gets credit for donating toward the Cardiff statue. She didn't donate to the statue, the taxpayers did.

TCN The New Face of Heroin
Detective Johnson said because the Encinitas station only has two detectives for their department’s jurisdiction — which encompasses Encinitas, Del Mar, Solana Beach, Cardiff-by-the-Sea and Rancho Santa Fe — he and his partner are sometimes restricted to how quickly they can respond to citizens’ reports.

“We have limited time and ability to take care of things as fast as people want,” Johnson said. “If it was in my backyard, I’d want it done tomorrow, but it doesn’t work that way in our job. There are too many legal hoops we have to go through.”

See Also: LB Got Heroin

NCT Supervisors may end grants program
In a sign of the troubled economic times, county supervisors are contemplating eliminating or reducing the controversial community projects program.

Under the program, each supervisor receives $2 million annually from the general fund to hand out as they see fit.

The money often is given to community organizations for the arts, children, business and educational programs. But some critics have called the program a "slush fund" through which supervisors dole out money to political friends.

NCT County Revenues Fall
The county's budget is expected to fall about $78 million short of projected revenues, a figure that is projected to grow next year.

As of September, the county's employee pension fund lost $1.1 billion in value, from $8.5 billion to $7.4 billion, this year. Those losses raise the possibility that the county may have to increase its contributions by approximately $22.7 million in 2010.