La Palma, the county’s smallest city, hit with big cuts

La Palma, California –

When things get tough, it’s often the little guys that get hurt the worst. And after the recession, Orange County’s smallest city is in the midst of some very big belt-tightening.

Welcome to La Palma, all 1.8 square miles of it.

Since the recession, the city cut nearly 20 percent of its workforce, to 52 employees from 64.

The changes included reducing the police force to 27 from 32 over six years and more recently implementing more layoffs, combining several civilian departments and eliminating two directors. In July, the City Council created a citizens Financial Sustainability Committee to oversee operations and investigate additional efficiencies.

That’s not all. The city is considering suspending its signature event, La Palma Days, a festival the city points out is also known as the “official Veterans Day parade of Orange County.”

La Palma Days is firmly on the calendar for Nov. 14. But this year is special. The city celebrates its 60th anniversary of incorporation and its 50th anniversary of changing the town’s name from Dairyland to La Palma.

Yes, it would be a shame to suspend the event after such an auspicious year. But revenues are down; pension and other expenses are up. And in establishing the finance committee, the council warned: “The types of measures beyond those already enacted and planned may impact the character and traditions of the city.”

But don’t mistake small for weak. Fiercely independent, La Palma has plenty of pride and more than a few surprises. Money Magazine in 2011, 2013 and 2015 named the city one of the best places to live.

DIVERSITY OF CULTURES

The face of Orange County is changing quickly. Guess which O.C. city has the largest percentage of Asian residents? I would pick Garden Grove or Westminster, maybe Irvine.

Of course, the answer is … La Palma. With an Asian demographic of 48.1 percent, according to the U.S. census, La Palma noses out Westminster. While small at nearly 16,000 residents, La Palma also has the highest percentage of African Americans – 5.2 percent – of any Orange County city.

Cruising La Palma is a treat. Within a few blocks, you can find restaurants specializing in Vietnamese, Chinese and Korean cuisines.

City Manager Ellen Volmert is at the wheel as school lets out and mentions that nearly 20 percent of La Palma is Korean. She reports that city officials visit Korea and are in the early stages of developing more permanent connections.

We pass an area where new houses are proposed. Mind you, the development is nothing like what we see in Irvine, Tustin, Lake Forest or Yorba Linda, where thousands of homes are under construction. In La Palma, on what was a small strawberry farm, seven homes are expected.

Still, it’s a good sign. Register columnist Jonathan Lansner reported in July that La Palma was an especially hot housing market, with homes selling within 33.4 days. He noted low home prices likely were part of the reason; in July, La Palma had a median price of $560,000.

Volmert turns onto Dallas Drive. It looks like a typical cul de sac. But visit this area during the holiday season and be prepared for traffic jams. Christmas decorations cover lawns, holiday lights glow.

The city manager beams. It is that kind of neighborliness that makes living in the smallest city special.

BILLBOARD DOLLARS

To help increase revenue, La Palma has several projects in the works. Each is modest, the kind you’d expect from a city that was designed as a bedroom community and still prides itself for its “small-town character.”

One project involves allowing La Palma to erect several commercial billboards along the 91 freeway. Sure we’re not talking big money, but we are talking six figures. And every little bit quickly adds up.

Another project is Centerpointe, the city’s mixed commercial development north of the 91. Centerpointe dates to the early 1980s and has been updated several times.

It offers hotels, restaurants and office space including La Quinta Inn, Kaiser Permanente, A’Roma Ristorante, Samsung Chemical, CJ Foods.

FIVE SCHOOL DISTRICTS

Because of a quirk in history, there is at least one weird thing about La Palma – a city you can walk across in a half-hour. It’s served by five school districts: Anaheim Union, Centralia, Cypress, Fullerton and Buena Park.

Understand, when those districts were fashioned in the late 1800s, the area was cow country. With far more cows than kids, no one paid attention to the mishmash of school districts.

As I leave the city, I visit John F. Kennedy High. The school opened less than a year after Kennedy was assassinated and became one of the first schools named after our 35th president.

Emblazoned on one wall is Kennedy’s famous inaugural statement: “Ask not what your country can do for you – ask what you can do for your country.”

In an age of Facebook and Twitter, the quote would probably take the country by storm for 15 minutes. And then disappear. Yet it remains as vital a call as the day it was made more than a half-century ago.

It is a national call carried on the broad shoulders of one very small city.

https://www.ocregister.com/articles/city-682843-palma-one.html

Contact the writer: [email protected]

Participation Certificates – Bonds – and the “Shadow Banking” System – Hocus-Pocus Financing – Demystified.

The shadow banking system is a term for the collection of non-bank financial intermediaries that provide services similar to traditional commercial banks. Former Federal Reserve Chair Ben Bernanke provided a definition in April 2012: “Shadow banking, as usually defined, comprises a diverse set of institutions and markets that, collectively, carry out traditional banking functions–but do so outside, or in ways only loosely linked to, the traditional system of regulated depository institutions. Examples of important components of the shadow banking system include securitization vehicles, asset-backed commercial paper (ABCP) conduits, money market mutual funds, markets for repurchase agreements (repos), investment banks, and mortgage companies.” Shadow banking has grown in importance to rival traditional depository banking and was a primary factor in the subprime mortgage crisis of 2007-2008 and global recession that followed.[1]

https://en.wikipedia.org/wiki/Shadow_banking_system

A Participation Certificate (PC) (also known as a Certificate of Participation) is a financial instrument, a form of financing, used by municipal or government entities which allows an individual to buy a share of the lease revenue of an agreement made by these entities. It is different from a bond issued by these agencies since participation certificates are secured by lease revenues. Municipal and government entities use this instrument to circumvent restrictions that might exist on the amount of debt in other forms they are able to take on.

Participation certificates are a new form of credit instrument whereby banks can raise funds from other banks and other central bank approved financial institutions to ease liquidity. In this case banks have the option to share their credit asset(s) with other banks by issuing participation certificates. With this participation approach, banks and financial institutions come together either on risk sharing or non-risk sharing basis. While providing short term funds, participation certificates can also be used to reduce risk. The rate at which these certificates can be issued will be negotiable depending on the interest rate scenario.

On June 14, 2013, the city of Detroit announced, as a policy move to preserve cash during its financial crisis, that it would not be making payments [1] on a certificates of participation it had issued.

https://en.wikipedia.org/wiki/Participation_certificate

At its meeting on October 19, the Tustin City Council approved selling bonds in an amount not to exceed $45 million dollars to complete financing Tustin Ranch Road from Walnut Avenue south to Warner Avenue.

The bonds will have no financial impact on the City’s budget, as all
payments of principal and interest will be paid solely from revenues generated by development at Tustin Legacy. The bonds will also be used to fund other major infrastructure projects at Tustin Legacy.

Funds to complete the road will come from a variety of funding sources,
including these bond proceeds and funds from the City of Irvine allocated to mitigate traffic impacts from its adjacent development, the Irvine Business Complex. No monies from the general fund will be used.

https://www.tustinca.org/departments/citymanager/releases/releases/182.pdf

To provide for business start-up opportunities and expansion of existing businesses, the Tustin Community Redevelopment Agency provides access to a variety of financing programs authorized by either the federal or state government, as well as programs provided by other private, public and non-profit agencies. The Agency also provides technical assistance, educational support and other similar needs of a non-financial nature to the business community. A brief summary of the possible assistance and incentive programs that can be made available are as follows:
Zoning incentives to encourage economic development through:

Floor area ratio bonuses
Allowance for mixed use projects
Combining of public and private uses
Planned Unit Developments
Density bonuses
Assistance in land assembly:
Land banking
Eminent domain
Land swaps
Land write downs
Assistance with construction of infrastructure improvements.
Provision of technical assistance.
Provision of developer unique financing opportunities, consisting of:
Tax Increment Financing
20% Housing Set-Aside Funds
Special Purpose Financing Districts
1911, 1913, 1915 Acts
Mello Roos Community Facilities Act of 1982
Landscape and Lighting District of 1972
Revenue bonds
Lease Revenue bonds
Tax Allocation bonds
Lease Purchase financing
Industrial Development bonds
Certificates of Participation
Mortgage Revenue Bonds
Loans and Advances
Leases
Land Disposition Proceeds
Rental Payments
Participation in future cash flows

https://www.tustinca.org/departments/redev/busassist.html

Certificates of Participation (COPs). A form of lease revenue bond that permits the investor to participate in a stream of lease payments, installment payments or loan payments relating to the acquisition or construction of specific equipment, land or facilities. In theory the certificate holder could foreclose on the equipment or facility financed in the event of default, but so far no investor has ended up owning a piece of a school house or a storm drainage system. A very popular financing device in California since Proposition 13 because COP issuance does not require voter approval. COPs are not viewed legally as “debt” because payment is tied to an annual appropriation by the government body. As a result, COPs are seen by investors as providing weaker security and often carry ratings that are a notch or two below an agency’s general obligation rating.

https://www.emuni.com/glossary.php

Meet IPC International Security – The Shopping Mall Security Company with Criminal Employees

According to the criminal complaint, employees at several stores in Rosedale were reporting thefts and break-ins that were occurring after mall hours. The complaint said a “concerned citizen” contacted IPC International, the company that provides mall security at Rosedale. The “concerned citizen” said numerous security guards were involved in burglaries and thefts in the mall, and named Fransen and Woodhams.
https://www.startribune.com/local/11552666.html

A Harris County jury Thursday awarded a woman abducted at the Galleria and sexually assaulted more than $3 million in her civil suit against the luxury shopping center’s owner and the firm that provides its security.
https://www.libertypost.org/cgi-bin/readart.cgi?ArtNum=206299

*IPC International was the Security Provider for the District at Tustin Legacy – Feeling Safer Yet?

Founded in 1978 as General Investigative Corp,. Illinois-based IPC grew to become a major player in mall security staffing in the United States.

The company filed for Chapter 11 protection Aug. 9 after a failed attempt to expand into the United Kingdom and enduring the ripple effect of the 2008 recession.

The operations across the pond were never profitable and had to be funded by IPC’s domestic business before being sold in 2010, draining liquidity in the process, IPC attorneys have said.

Meanwhile, the 2008 recession had hurt the shopping malls and centers for which the company provides service, eventually trickling down to the security provider as opportunities began to dwindle, according to IPC’s court filings.

Making matters worse, the structure of the company’s general liability insurance that included a $1 million deductible had become a major cash drain, but IPC was able to switch its policy to one with a $100,000 deductible in 2011.

Hangar Fire - "Without Litigation" - City of Tustin Already On the Hook for $90 Million in Clean-Up Costs - "Not Including the Actual Hangar Property" - and Heading for a Billion Dollars - Developers Likely Not Off the Hook Either - Property Value Assessments Undergoing Official Review - Ask Yourself - Would You Buy or Rent at the Tustin Legacy - Remember there's "Another" Hangar Too
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