Feb 4 2014

OPINION: Councilmember Wieler Clarifies Bond Measure Conditions

– The following letter written by Councilmember Jeff Wieler is addressed to David Mix and was sent to PCA on February 4, 2014. – This is a response to an opinion letter by David Mix published February 3, 2014 on this site.

Dear David,

I have been the unwilling recipient of your emails, and will try and explain your many misconceptions as simply as possible, to give you a chance at understanding the facts.

Majority requirement:  If measure A passes with 51% of the vote but less than 67%, Piedmont can request judicial approval to issue bonds. If it passes the 67% threshold, that is sufficient for us to proceed.  Note: the two thirds requirements generally applies to taxes.

Before you start making claims about another city, it might be prudent to read the city’s Charter.  If you like to do this, you can easily do so by going to the city website. Section 2.11, part five says the City Council is empowered to borrow money if they pass an ordinance to do so.

Then you need to go on and read Section 4.14, which says that bonds are limited to 20% of the assessed valuation of the city, and issuing debt requires a majority vote.  Clearly we’re not talking about borrowing in excess of 20% of Piedmont’s property valuation.

You are in error about the side fund. CalPERS will issue a (final) payoff amount upon request.   I have no idea why you think the amount is a moving target.  That is something that is true about the overall CalPERS  pension funds, however the new accounting standards going into effect soon, will require disclosure of the unfunded liability.  The truth of the matter is that the side fund is actually quite similar to a simple home mortgage. And there are no “Neighborhood Association’s fees” associated with the pension side fund.  Your facts simply are not correct, and although in some respects applicable to the overall CalPERS pensions accounts, they are not valid in the case of the side fund.

You can rest assured that we’re not doing what Oakland did — we’re not speculating on the future of interest rates, nor are we borrowing at low muni rates in an attempt to profit through arbitrage.  Piedmont has a long history of pay-as-you-go financing.

Finally, you are correct we rely heavily on bond counsel and the City Attorney.  Yes, our legal advisers do work for the city, and have the professional and fiduciary responsibility to advise us properly.  Your implication that they would give us bad advice because they had an “undeniable vested interest” is highly inappropriate. By your logic, the 20 plus other cities who have refinanced their side funds must also have had incompetent or venial city attorneys and financial advisers.

I suggest you focus your attention on your own city of Oakland, instead of trying to interfere with a historically well-run city.  I would also like to know whether you have any professional qualifications to opine on the legal and financial issues involved. Based on your comments, I can only assume that you are speaking from a position of ignorance.  I will note that Piedmont’s City Council contains one lawyer and four finance professionals.  I think we know what we’re doing, can you say the same?

Jeff Wieler
Member Piedmont City Council

Editors’ Note:  The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association.  The Association does not support or oppose ballot measures. 

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