Bannings $ 110 Million Dollar Bond Debt
Banning’s $ 110 Million Dollar Bond Debt – or how Hanna and Machisic mortgaged our future
10/19/09 – Most voters of Banning have little or no idea that in 2005 the City Council indebted Banning with over $ 110,000,000 for the next 30 years ! You may say this cannot be true. Why is it that we never got to vote on this ?
No, this is not a misprint. Over Onehundredandten Million Dollars were borrowed in 2005/06 via several bond issues. This was voted for by no other than Barbara Hanna and John Machisic, who apparently thought that they – not the voters of Banning – should make the decision to borrow this unprecedented sum of money. They felt that they knew best what’s good for us.
Think about it : over 110,000,000 Dollars for a little town like Banning. It equates to $ 3,800 for every man, woman and child – or $ 15,200 for a family of 4. Banning needs to pay over 6 million a year for the interest on this debt – for another 27 years ! Creating public bond debt is no different from taxing the public.
Voters must approve any new indebtedness or taxation, but in this case our elected officials ingeniously found a way around it ; it was done basically by creating a shell game. In particular, they created the Banning Utility Authority. Keep in mind that we had an almost debt free utility at the time. The authority would lease the entire utility system ( water and power) from the City of Banning for 30 years. Using the income stream from the
utility system the Authority then issued bonds . The money taken in by the Utility Authority from selling those bonds was then transferred to the City under the disguise of “lease payments” . It was subsequently used for anything you can think of including redevelopment grants and a new $13 million police station. The latter was part of the water bond, however the California Supreme Court has ruled that this type of use is illegal and water utility debt cannot be diverted to purposes other than water . The use of this water bond for a police station violates Proposition 218 .
The truth about the bond issue is buried in over 1,000 pages of public documents – it would be impossible to show them all here. However, this bond prospectus issued by the Banning Utility Authority ( here for the 2005 water utility bond) gives the reader a good idea of what was done ( in particular see page 7).
Now the $ 110,000,000 have been spent or have been appropriated. The money is essentially gone and the taxpayers of Banning are left with the tab to pay the interest and repay the debt over the next 27 years !
Now we know the REAL reason behind Bannings constant utility rate increases and why Measure “L” (tax increase) is on the next ballot! The piper needs to get paid. This is a classic case of “taxation without representation”.
Thanks, Barbara Hanna and John Machisic ! – with your “vision” you have mortgaged our future and that of our children. You have turned Banning’s citizenry into eternal debt slaves.