Former La Habra Mayor Tim Shaw penned a guest column for OC Independent last August in which he warned about the city’s bleak financial outlook. Shaw points were that the city’s $72 million Pension Obligation Bond (POB) posed significant long-term risk, the enormous lawsuit the city was fighting with Lennar Homes could spell financial ruin, and the scheduled expiration of the city’s ½% sales tax in 2028 could combine for a perfect storm of financial calamity.
All reasonable and valid pints. Perhaps that is why they prompted a hailstorm of complaints from the La Habra councilmembers who did not appreciate Shaw playing Cassandra to their fiscal rashness.
Councilman Steve Simonian launched ad hominem attacks against Shaw. During the September 19, 2022 council meeting, Councilman Daren Nigsarian attacked Shaw’s claims as “reckless, unfounded, false, a political stunt” and contended “La Habra has never been in better shape”.
During the December 5th council meeting, Councilman Jose Medrano piled on, accusing Shaw of “gaslighting” La Habra residents and bizarrely urged the audience in the council chambers to not be “friends” with Shaw.
Less than a year later and we’ve come full circle.
While we don’t know how the POB will turn out long-term, we do know that after putting over $72 million into CALPERS in January of 2022 the CALPERS portfolio immediately took a dive.
The $100 million lawsuit with Lennar Homes has not been resolved, but La Habra’s legal woes are compounded with a new lawsuit from Californians for Homeownership. Lennar has also submitted a new development proposal with La Habra under a state law commonly referred to as “builder remedy”. Should the City Council attempt to deny this new proposal, Lennar will certainly sue La Habra again.
Ironically, it was former Councilman Shaw who attempted to have a discussion about state housing laws put on a future agenda at the January 19, 2021 council meeting to warn the council and staff about laws like builder remedy, but his motion failed for a lack of second.
Which brings us to a few days ago, when the city staff brought forward their annual budget update. In a Power Point slide that could have been titled “Tim Shaw Was Right”, the staff projected expected revenues and expected expenses out for 15 years. The projection shows $108.6 million in red ink being spilled over that time, largely due to the expiration of the ½% sales tax.
In other words, exactly what the current councilmembers were vilifying Shaw for saying last year.
In fact, the city’s financial picture is likely to be even worse. La Habra contracts for fire services with LA County Fire, and the staff reported on the status of their contract renewal negotiations with LA County Fire after the conclusion of their budget presentation. While the contract is not officially renewed, the staff made it clear that under the best of circumstances there will be an annual increase in this contract in the 7 figures.
Did the City Council denounce their staff for their reckless, unfounded, false portrayal of La Habra’s finances? Did they tell them to stop scaring the public? Denounce them for gaslighting?
No.
The difference: Shaw was an independent political figure who had the temerity to state these inconvenient facts while the incumbents were running for re-election! They and their allies wanted blue skies and happy talk – not the cold hard fiscal consequences of their decisions.
Now that they are re-elected, they slowly revealing in public what they had been plotting in private prior to the election: raising taxes.
Should the council push a tax measure it will be the breaking of a campaign promise for all three councilmembers who got elected in 2022. Jose Medrano’s campaign mail actually promised he would be “cutting taxes”. Daren Nigsarian’s mail promised “No new taxes”. James Gomez had said he “fights against taxes!!”
Now they are laying the groundwork for a tax measure they will want their voters to approve, so its time to break out the violin on the city’s financial picture. The La Habra City Council needs to learn that wildly changing your public narrative to suit your short-term political interests, while running over anyone who provides thoughtful commentary, is not likely to earn the needed trust from voters for higher taxes.
