U.S. Rep. John Campbell, R-Irvine, is proposing an amendment to the Consumer Financial Protection Agency Act which would exempt car dealers from regulation. (We delve into the pros and cons of that idea in our story here.)
So, what do you think?
Orange County Treasurer-Tax Collector Chriss Street pulled the plug today on a proposed $80 million loan to Tri-City Medical Center in Oceanside. The publicly owned hospital had hired Street’s personal attorney, Phil Greer, to lobby O.C. supervisors — but not Street himself — on the deal.
In a memo to supervisors, Street said financial uncertainties, including fierce competition and local voters’ unwillingness to raise taxes, outweighed the hospital’s strengths.
An analysis prepared last week by Street’s chief investment officer, Paul Cocking, cited “recent turmoil at the board level” as one reason for turning down the hospital loan. The board ousted management in late 2008, and several of the former managers are suing.
The district’s voters turned down a bond measure to rebuild the hospital, which faces a 2030 deadline to meet state earthquake standards.
Tri-City also faces two well-funded competitors, Palomar Pomerado Health, which is completing a $900 million expansion, and Scripps Health, which is beginning a $350 million expansion, Cocking wrote.
“Community residents may like the idea of a local hospital,” Cocking wrote. “However, they seem to prefer a hospital not supported by taxes.”
Tri-City had borrowed $58.3 million in spring 2007 using “auction-rate securities,” essentially a series of 1-week loans. Auction-rate securities were popular at the time because interest rates for public agencies were low.
But just a few months later, in mid-2007, the worldwide credit crunch erupted, squeezing the auction-rate market tight. Interest on the Tri-City loan soared from the expected 3 percent to peak at 17.5 percent. Tri-City was paying $500,000 a month more in interest than it had expected.
Desperate to refinance, the hospital district turned first to San Diego County Treasurer-Tax Collector Dan McAllister. When McAllister wouldn’t bite, the district turn to Orange County.
The district hired Greer – who has represented four of the five O.C. supervisors as well as Street – to lobby the supervisors in August for $50,000. It promised him an additional $200,000 if the supervisors approved the loan by Sept. 9. That deadline came and passed with the loan request still in Street’s office.
Greer represents Street in a pending lawsuit accusing the treasurer of defrauding the bankrupt Fruehauf Trailer Corp. when he was its trustee. That lawsuit is scheduled for trial in Los Angeles in early February.
Greer and Tri-City CEO Larry Anderson did not return messages seeking comment.
For months, Orange County Transportation Authority officials have boasted that projects funded by federal stimulus money could create as many as 3,781 local jobs.
But a close examination of employment estimates shows that formulas for estimating job creation vary wildly and actual payroll numbers are likely to be much, much lower.
Orange County’s largest stimulus project, an extension of the SR-91, was projected by OCTA to create as many as 1,332 jobs. According to the transportation agency’s formula, 493 of those jobs should have been direct full time construction work lasting a year.
But the company that won the contract estimates the project will take 100,000 manhours – the equivalent of less than 60 full time jobs lasting the length of the 10-month project.
Read the rest of this entry »
Stimulus, indeed! Car dealers turned in 642,277 vouchers to the the Cash for Clunkers program, and they’ll get $2.7 billion from the government, according to the latest statistics.
But the program, some consumer experts say, was poorly designed and executed, saddling dealers with risk; consumers with precious little protection; and taxpayers with the bills.
For the $4,000-plus per car that taxpayers shelled out, “we could have gotten a lot more,” wrote Lisa Margonelli. a senior research fellow with the New America Foundation in a piece in The Atlantic.
“Consider this: C4C only required a fuel economy increase of 2 mpg over the original car,” she wrote. “The auto companies can raise the fuel economy of cars on the assembly line by that much at a cost of $500 per vehicle. So, we could have given our $2.87 billion to the auto companies to upgrade 5.5 million cars by 2 mpg or more.”
Rosemary Shahan, president of Consumers for Auto Reliability and Safety in Sacramento, said, ”The taxpayers gave the dealers a $3 billion gift.”
We told you yesterday about Dan Hoang and Tara Bui, who thought they traded in their clunker, a 2001 Nissan X-Terra, and were surprised to find it for sale by the dealer, Volkswagen of Garden Grove . The dealer says it accepted the car as a trade-in, and never applied for cash-for-clunkers money from the government.
A misunderstanding? Or something more?
“The couple there is not alone in thinking there is something really wrong in this program,” said Shahan. “In their case, it’s very strange that they intended it to be a cash-for-clunkers transaction, and the dealer did a trade-in. It sounds like it could be a form of bait-and-switch. It certainly defeats the purpose of the program to sell a clunker all over again. But the government set it up in a way that was flawed from the beginning.” Read the rest of this entry »
At a time when generous public employee pensions are generating enormous heat (among the less-well-pensioned populace, at least), the giant Metropolitan Water District of Southern California is poised to hike employee pensions by 25 percent.
In coming weeks, Met’s board of directors is slated to vote on hiking its pension formula from 2 percent at age 55, to 2.5 percent at age 55. English translation:
It could cost Met some $70 million; we’ll bring you details in coming days. (You can hear an actuary give his report to Met’s executive committee here.)
It happens at a time when water rates are rising significantly, and when Met’s pension investments in CalPERS have tanked at least $405 million. Bringing Met’s “unfunded liability” to something very close to a half-billion dollars. Read the rest of this entry »
Oh, boy, this is going to get folks mad.
“Firms that fed off the subprime lending frenzy that devastated the banking system are lining up to collect more than $21 billion in taxpayer funds meant to help bail out borrowers now in trouble on their loans,” reports the Center for Public Integrity - a nonprofit dedicated to producing “original investigative journalism about significant public issues.”
In ”You Broke It, You Fix It? Subprime Players Get Tax Money To Fix Subprime Mess,” John Dunbar writes:
“The funds come from the federal government’s Home Affordable Modification Program (HAMP), begun in February by the Obama administration to coax lenders into modifying mortgages that might otherwise result in foreclosure. According to a Center for Public Integrity analysis of public records, of the 25 top participants in the program, at least 21were heavily involved in the subprime lending industry. Most specialized in servicing subprime loans, but several both serviced and originated the loans.”
The folks who nearly sunk the global economy, but who will chow down more taxpayer pie: a subsidiary of beloved American International Group Inc. Read the rest of this entry »
The Tri-City Healthcare District in Oceanside hired Orange County attorney and political broker Phil Greer on Monday to try to get an $80 million loan from the county.
Greer is the personal attorney for Orange County Treasurer-Tax Collector Chriss Street, who would have to recommend the loan. He formerly represented four of the five county supervisors, who ultimately would have to approve it.
Chriss Street
The hospital board paid $50,000 to retain Greer and agreed to pay him an additional $200,000 if he can close the deal by Sept. 9, the North County Times reported.
Unfortunately for Greer, the supes are taking the next two weeks off. They won’t meet again until Sept. 15.
Greer is defending Street in a $7 million fraud lawsuit brought by the Fruehauf Trailer Corp. bankruptcy trust. Street’s other lawyers quit last October, citing $640,000 in unpaid legal bills. Greer said Street is current on his legal bills to him.
Greer said he will lobby the supervisors but not Street.
“I have been assigned to represent the district before the board,” Greer said. “I have absolutely nothing to do with the treasurer’s office analysis.”
Street said the hospital district has sent his office financial documents but no specific proposal for a loan.
“Our investment team’s only in the preliminary stages of doing due diligence on safety and liquidity,” Street said. “I don’t even know what we’re going to look at.”
But Larry Anderson, Tri-City’s CEO, said he sent Street’s office a specific request — $80 million with an interest rate one-half percentage point above the county treasury’s average yield.
Anderson said Greer had told him that “we’ll get a proposal from the treasurer as early as this week.”
If Street decides the loan is a good deal for the county, he would then have to ask the supervisors to okay it. The county’s investment policy allows the treasurer to loan money to public agencies inside the county but not outside it, Street spokesman Keith Rodenhuis said.
Street said Assemblywoman Diane Harkey, R-Dana Point, asked a few weeks ago if the county could help the hospital, which is in her district.
Tri-City borrowed $58.3 million in ”auction-rate securities” — in effect a series of weekly loans — in spring 2007.
The loan’s timing, just a few months before the worldwide credit crunch, was disastrous. Interest rates soared from the expected 3 percent to peak at 17.5 percent. The hospital currently is paying $500,000 a month more than it had expected.
Anderson said the hospital first tried to borrow money from San Diego Treasurer Dan McAllister, but “the discussions just were not robust. Orange County’s reaction was much different.”
As this $787-billion flurry of federal stimulus manna trickles down to our local governments, you may have read the heart-warming announcements:
Well, try to pin folks down on precisely how they know precisely how many jobs this money will buy, and it’s a bit like Alice slipping down the rabbit hole.
Several reporters here at the Register have had existential experiences trying to suss this out, and a recent report by ProPublica confirms that the emperor has no clothes (or, at least, they don’t fit very well): Read the rest of this entry »
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