Well, Comrades, it pains me to say that after all these years last night’s City Council meeting proved me wrong and everyone else right. My continued diatribes on the power of incumbency (and its proof over and over again with election outcomes) have been fully embraced by four of the five City Council members who, like the Politburo of the dissolved Soviet Union, act on recommendations of gray and unknown techocrats without question in a mixture of boredom (Comrade Frank) and befuddlement (Comrade Marsha), comfortable in their incumbency with an uninvolved electorate dutifully acting as a loyal Party Congress every two years to retain them in office. Additionally, it appears that, at least with respect to the library issue, The Signal will act as the Politburo’s own Pravda.
People speak of a simmering resentment in the land which the Politburo fuels every time it ignores the wishes of the proletariat who actually show up to a City Council Meeting. But I still believe that electoral resistance is hopeless and I have given up. In less than three years time, when our youngest son graduates from high school, my Nebraska bride and I will decamp to a cooler Southern California clime (Oxnard and Camarillo look particularly attractive). There I will willfully keep myself ignorant of local politics which probably functions no better. It has to be easy since 83% of the registered voters in Santa Clarita can do it!
In the meantime I think the only possible weapon a loyal resistance can use is embarrassment. Since no money exists in local politics the Politburo weakens if they feel they are not beloved by all, or at least all the proletariat that don’t show up to Council Meetings. Therefore, I offer the opposition some thoughts on guerrilla tactics to embrace in the coming years.
Serial “Recalls”
In Santa Clarita it takes about 13,500 signatures to call a recall election. No one will ever obtain these signatures in real life, just like a three library system will never, in real life, be as good as a 52 library system, but my consultations with the City Clerk reveal that it only takes 20 signatures to serve a “Notice of Recall.” So get twenty of your friends to sign a recall petition for a random Politburo member and serve it on them at the next Council Meeting. Wait a month and then serve another member with a recall notice. Set up a card table in front of council meetings to gather recall petition signatures. When the 150 days expire to obtain the signatures, file another recall notice until some type of record is set.
Parliamentary Pranks
Bring ten of your closest friends to a council meeting and sit in the front row with arms folded and totally silent. When your favorite Politburo member starts to speak, at a silent signal everyone jumps up and yells “RESIGN!” and then marches out of the building. (Be sure to have a confederate film this for YouTube.) Come to every meeting and do the same thing, but only once, and to random Politburo members and technocrats to keep them guessing.
Any other ideas for embarrassment from the proletariat?
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Tim – You have gone above and beyond! Let’s see if anyone is paying attention.
Tim – I’ll do it if you do!
NFIC:
You forget that I have given up, and must now spend the next three years trying to perfect some kind of refugee status in a cooler place, where I can keep myself willfully ignorant of local politics. Good luck to all those who still want to fight!
@Tim, I wonder if you and all your “confederates” will also come back and apologize after the City administers our local library services contract and the proletariats are blissfully content with better custom tailored services at their local library branch just like with our local City parks.
Don’t think so! By the time that can be figured out I will be blissfully and willfully ignorant enjoying the cooler days in Camarillo or Oxnard, by then maybe Oxnard Shores, and won’t know anything about it!
Stay out of Oxnard. A doctor friend was arrested for driving is Porche through town on the way to Santa Barbara. They thought he was a drug dealer. The cops have a unique standard for who they stop. Not DWB but DWR.
I drive a Toyota Camry so I will be perfectly safe.
How about a middle ground? Bring (non-trivial) issues that arise from this change up during public participation. Make it very clear when there are problems. Demand that the council live up to their words and address the issues — exerting the local control that is the promised cornerstone of this move. If the services are good there won’t be a continual outcry (so no disruption). If the services fail (five weeks to get books, lack of DVDs/audiobooks, additional fees/fines) then they will be public and addressable. If the council fails to address the problems, there will be an established public record to hold them accountable at the next election.
Santa Claritan:
It is clear to me and the four members of the Politburo that the elections are of no consequence. Plus, the Politburo put the public participation at the end which is way past the bedtime of people who need to work for a living. Better to have over the top public demonstrations that can go viral on YouTube!
@Santa Claritan, too reasonable a solution for this group.
Big Bertha in the house!
Here’s a link to a detailed story on LSSI which one of the library supporters tried to read, in key parts, to the City Council, not that they would have listened. The detailed information is quite surprising:
http://www.libraryjournal.com/article/CA456252.html
I think the Parliamentary prank gets better and better, since it will disrupt the entire meeting since everyone will be wondering and tittering about when it is going to happen. It can get even more unsettling if the ten stand up and then quickly sit down before saying anything. How about going through an entire meeting without doing it at all?
The ten would need some type of uniform t-shirt (A black one with “Resign!!!”?) so that people could alternate but everyone would be tittering about when it was going to happen.
There’s no topping the Serial Recall idea, Tim, in terms of humor.
It is possible for signature gatherers to carry 4 recall petitions at once, and actually collect signatures on public property, including at the libraries.
However, if the library-lovers are serious about understanding what led to last night’s rapid vote, in the hopes of turning it around or at least ending some political/public administration careers, the first and absolutely mandatory step is a thorough review of all of the City’s public records on the topic and related topics, including emails and city telephone bills (including city-paid cel phone bills), concerning the matter. That review takes a well written California Public Records Act Request, a team of intelligent people to review all of the records and decide what to copy, and then someone savvy to decide how to deal with the more interesting documents which are discovered.
It would also be interesting to do a polite Public Records Act Request to the County Librarian, and begin looking at relevant materials in the County’s files, to built a picture of how the City dealt with the County. Reviewing two public agencies’ files always turns up documents “the other agency” has deleted because they don’t want the public to see it.
Back in George Caravalho’s days as City Manager, when Ken Pulskamp was his assistant, I would never cease to be amazed at the enlightening things I found in City files, some of them planted there for me by disgruntled employees.
Knowledge is power, and there is nothing like constant reviews of City files to put together the broader puzzle of what the City Manager and his assistants are up to, and why. Never forget that George Caravalho taught university level Public Administration courses, and was repeatedly caught (by kids of Santa Claritans) telling his classes that Santa Clarita City Council members were sheep which he would herd with great ease. George Caravalho was Ken Pulskamp’s mentor, bringing Ken from Bakersfield with George when the city was formed. Ken is perhaps George’s most successful student, and Darren is obviously learning fast at the elbow of this second generation manipulation mentor.
“The public” will never begin to understand what the senior City employees are up to, and why, without careful and repeated reviews of the City’s public records. Without knowledge about what is going on, big picture, and why, the average outraged voter “can’t do anything about it”.
Santa Clarita is full of people who know how to write a detailed Public Records Act Request: Plambeck, Noltemeyer, Cameron, Thomas and probably Boydston. Once can hope that the people who have been down this road before (and know how to avoid being spammed by the City staff) can teach the new, angry, intelligent people the ropes.
Let any army of angry, intelligent, retired library patrons descend on City Hall for intensive file reading and copying sessions.
I like an idea that a first-time CC watcher came up with last night. Now this would really only bother Marsha and Laurene, but someone could use their comment period to offer three minutes of uninterrupted applause for whatever speaker/cause/comment that the Mayor forbade the people to clap for.
EX: “Honorable Mayor Laurene Weste, I would like to use the next three minutes to applaud all of the hard-working librarians of Los Angeles County since you won’t let us applaud after they speak. [claps]“
So kinda like the Tea party without the results?
What results? Tea?
Tea Party has had results?
It looks like the people in Bell think they can get some results:
http://latimesblogs.latimes.com/lanow/2010/08/bell-residents-take-first-steps-to-recall-council-members-.html
You really need another source of info. MSNBC is not cutting it.
http://www.stltoday.com/news/national/article_5ebe3ee4-6692-5758-9ed3-60e639016bc5.html
Some new LSSI info that popped up yesterday:
Triangle Capital Corp. invests $5.3 million subordinated debt investment in LSSI
June 17, 2010
http://www.forbes.com/feeds/globenewswire/2010/06/17/triangle_capital_corporation_invests_5_3_million_in_library_194562.html
What is Subordinated Debt?
By Christian Mullen, eHow Contributor
Subordinated debt is a financing vehicle available to a company when they have exhausted other avenues and wish to raise capital. It is considered riskier than senior debt and can cost a company more money as the investor or issuer takes most of the risk involved. It is often hard to secure for companies as their credit ratings must be high and their future cash flows must be sufficient. If a company defaults, senior debt holders are paid first and those who hold subordinated debt may be at risk.
Significance
Subordinated debt can be a great way for companies to raise capital, but the risk is high and companies must pay a high price to investors to take this risk. Investors and financial institutions often issue this type of debt based on their research of the company and its confidence in future cash flow. Many compare this debt to a second mortgage as it is not secured by collateral. In some cases, the interest spread on subordinated debt can be as much as 500 basis points.
Asset-backed
Much of the subordinated debt that is available is issued as part of an asset-backed security such as a collateralized debt obligation. Although certain aspects of an ABS are collateralized, subordinated debt is not and will carry a higher interest rate to reflect this risk. Senior debt holders receive cash flows backed by collateral first and if defaults are present, the subordinated debt will absorb them.
Mezzanine Capital
Mezzanine capital is another form of subordinated debt that exists in the finance world. It is a hybrid of debt that is issued subordinate to other forms of debt and can appear to act more like a stock than a bond. A company issues such debt and it can be converted into stock if the investor is not paid back in a timely manner.
Effects
Subordinated debt can have far reaching effects on those who purchase it. This type of debt is unsecured, so investors take great risk in purchasing this type of debt. If the company goes bankrupt and there is not enough capital to pay all senior debt, the subordinated debt holders lose the money they have invested because there is no collateral pledged.
Benefits
The benefits of subordinated debt are similar to any investment where risk is increased. You will receive a higher return on your investment with subordinated debt. When an investment is issued with no collateral, there is more risk that you will not receive any money from its sale in the future and to compensate, you will receive a better percentage yield. This extra money is a risk premium that is added to many such debt obligations.
Risks
There are risks to the issuer when it relates to subordinated debt. The lack of collateral pledges for such investment makes them highly speculative, they are usually rated low by credit agencies and can result in a significant loss. When an investor offers subordinated debt financing to help a company, the lender often feels that the cash flows are sufficient and that the debt will be repaid. This is solely speculation and the end result can be a default.
Read more: What is Subordinated Debt? | eHow.com http://www.ehow.com/about_5067987_subordinated-debt.html#ixzz0xenY33Sw
Cheryl:
I am as mad as anybody about this but subordinated debt is a common method of raising capital and their is nothing nefarious about it.
@Tim, a fair response to Cheryl’s comment.
I cannot help but notice that you recently made remarks about both Cam Noltemeyer and Carol Lutness being the worse for wear according to you. I have yet to hear you comment on the appearance of TimBen, Al Ferdman, or other guys that routinely address Council although I do acknowledge you were obsessed with David Gauny’s hair. I believe there is an issue of parity here. Just an observation and I wonder how your Nebraska bride feels about the knocks to older women.
TimBen and Al are extremely homely, and I mean that in the nicest way possible. My Nebraska Bride works out six days a week and looks like shes about 32, though she has two grandchildren. I would have voted for Dave Gauny’s hair if it was on the ballot.
You must understand that hitting the wall is a very touchy subject for Berta Beotch. She hit that sucker doing 90 with a blindfold. It hits a nerve, you understand.
@Gangfang, you and “Jerry” should get together. You can insult me and commiserate about your “issues” too.
That is because she was asleep with her head in a pillow case
Tim – That’s why I just posted the article and made no comment – was hoping someone would give me more info on what exactly
subordinated debt is. Thanks for the info.
We will now have to go get a LA County Library card at the new Castaic Branch, Tim, in order to continue to get our great audio books on CD – further to drive to pick them up but at least we will still have access to County’s online Book Catalog. I wonder when our present cards will suddenly be “null and void?”
We might also want to communicate with our county supervisor and ask that the county not punish the city’s citizens for the actions of our council. Under state law, the county could deny us the benefits of the county library.
Cheryl:
The information you posted, about LSSI’s subordinated debt, is quite interesting in that subordinated debt holders are getting “hosed” in major business bankruptcies all over the country. Subordinated debt is a very expensive way to capitalize a company, and generally contains a series of “math formulas” called debt covenants which provide that if at any time the company’s profit and loss statement and balance sheet data don’t fit within the required math formulas, the subordinated lenders can accelerate the due date of the debt/loans and foreclose (if the creditors are secured) or sue on the debt and attach the company’s assets (if the creditors are unsecured.) Nine times out of ten, a default on debt covenants quickly leads to a Chapter 11 filing by the debtor company.
Last night Marsha mentioned to Hernandez/Pulskamp that she was expecting to see a 30 day cancellation, without cause, clause in the contract between LSSI and the City. That is a good provision to have given these uncertain financial times, and we can hope that Hernandez/Pulskamp deliver on that promise before Pulskamp signs the contract.
The reality, however, is that when you are dealing with a company you are nervous about, you have to set a Google Alert to get all news stories and blog posts about the company, so that you have some warning that the company is going to come crashing down. The comments last night, about LSSI’s contracts being terminated in some cities because they weren’t paying their bills in a timely way seriously concerned me because that’s a sure sign of trouble ahead.
The bottom line is that if any private library service provider has its assets seized by its lenders, triggering the filing of a bankruptcy before the City gives the 30 day termination notice, the City is screwed under the Bankruptcy Code because (1) the termination notice is ineffective; (2) the company has the right to cure most contract defaults; (3) the library management contracts can be bundled off and sold to any third party the bankruptcy judge approves; and (4) the company itself can be sold off to a third party, and all of the senior management types with whom the City is dealing might be gone.
A “property owner”, which is what the City essentially will be as the libraries owners, ends up in a profoundly difficult mess when his “property manager” is a Chapter 11 debtor. Just ask those in the know about what happened at Valencia TPC, when the bankruptcy court judge authorized repossession of the golf carts, because the debtors refused to pay the equipment lease charges and kept stalling curing the equipment lease default!
I certainly hope this sort of mess never happens to the City of Santa Clarita, in having a private company manage its libraries. It will take very detailed, careful lawyering by the City’s secured transactions lawyer to make sure that every table, book, DVD and computer purchased with the City’s funds is carefully titled in the City’s name, that LSSI doesn’t lease any critical equipment in its own name, that LSSI’s name is not on any bank accounts with the City’s money in them, and that LSSI’s secured creditors don’t get a lien on tangible personal property the City pays for simply through lazy record keeping by those involved. Otherwise, if the company heads south financially, the City will get hosed and spend hundreds of thousands of dollars in bankruptcy lawyers fees trying to protect itself. This kind of business management lawyering is way beyond the experience of the new or old City Attorney, let alone most of their law firm, which specializes in “municipal law”.
So, for now set those Google Alerts for LSSI, and demand that the public and the Council members see and critique the final version of the City’s contract with LSSI before Ken Pulskamp signs it on behalf of the City.
As to that subordinated debt financing LSSI just obtained, here is the lender’s description of itself, from it SEC filing at the time the loan was made:
” Triangle Capital Corporation ( http://www.TCAP.com ) is a specialty finance company organized to provide customized financing solutions to lower middle market companies located throughout the United States. Triangle’s investment objective is to seek attractive returns by generating current income from debt investments and capital appreciation from equity related investments. Triangle’s investment philosophy is to partner with business owners, management teams and financial sponsors to provide flexible financing solutions to fund growth, changes of control, or other corporate events. Triangle typically invests $5.0 – $15.0 million per transaction in companies with annual revenues between $20.0 and $100.0 million and EBITDA between $3.0 and $20.0 million.”
I hate to say it, but under the lender’s loan/equity kicker criteria, LSSI fits into a category of “small companies”, with annual revenues between $20 Million and $100 Million. Crimminy, I was the foreign exchange manager and cash controller/manager for a company in that numerical range in 1975. Using the rate of inflation since then to deflate to 2010 dollars, LSSI are mere bugs on the windshield of corporate America.
Coastal:
LSSI is just another one of these ridiculous privatization companies like Blackwater or whatever it is called now and Kellogg Brown and Root. It generally turns out that one can’t really make a reasonable profit from public services (that is why they are provided by the ‘public.’) The initial contracts have to be super cheap to justify the mooted savings, so they struggle at breakeven or worse for years while they are chasing revenue, incurring a lot of complaints about service. Then they lose the contracts when they try to make them profitable by cutting costs and the customers don’t like the service and take it back inhouse. This is why they have to get subordinated debt from mezzanine lenders, which is quite expensive, rather than funding their working capital through a bank.
Respectfully, this is incorrect. What makes certain services difficult to make a profit from is the difficulty of collecting fees from the users. Think of the star wars missile defense system as a perfect example (that is, assuming it actually worked). It would protect both you and me from a missile strike, regardless of whether we both payed or not. If we lived next door to each other and you paid but I didn’t, the service provider couldn’t let the missile destroy me but not you.
So of course we coerce payment for those public amenities through required tax payments. But that says nothing about who actually provides the service; it only says something about who collects the payments.
There are a great number of things the government provides through tax dollars, but that are actually produced by private contractors. The vast majority of roads that are built in the U.S. are taxpayer funded, but built by private companies. Waste collection is frequently done by private contractors, and in many places even the landfills are privately operated.
Frankly, I don’t know enough about the business model of libraries to say whether they’re a great bet for privatization or not. The fact that after a couple of decades of LSSI’s existence it seems not to have competitors make me skeptical–if a company really could profit from running libraries, why aren’t competitors jumping into the business, no?
But that’s an argument about a specific type of service. Some services may not be appropriate for privatization. But some clearly are, so your sweeping statement is, well, too sweeping.
Excellent advise J. As long as the City has decided to do it they need to do it right.
How about a comment on Berta? She has an opinion on everything and routinely addresses the council. Her comments are boring, inaccurate and her posts are the same BS over and over. Get a life Berta.
@Jerry, I do have an opinion on most things and willing to share it using my full name so that all can hold me accountable if they choose. I do not address the Council nearly as frequently as Al or TBB, but do whenever I feel the need. I never imply I represent anyone other than myself without authorization. That my comments are boring is your opinion. That my comments are inaccurate is YOUR error. My posts are MY posts and if you think they are repetitive, why are you reading them repeatedly?
I have a life thank you and it is the life of MY choosing not subject to your will. I have a very busy, full, rich, productive and immensely satisfying life. How about you “Jerry”?
JERRY and others. You are all beginning to get the 411 on Baaaaaaairta. Lets be quiet about her for awhile and maybe she will stay asleep imside her pillowcase. Alass she will probably talk/mutter in her sleep. Only the muffle of the pillow case will save us
@GRAMPS, you know I am beginning to think you are vying for my attention since you know that I know who you really are. I remember a little boy who used to say the stupidest things just to get me to notice and talk to him. Hum…
And developments want to get annexed into the City of SC? Please leave Castaic alone!
I agree. The branch up there will be the only source for the large LA Library and if it is annexed the City will grab it.