Archive for December, 2012

Refinancin​g Student Loan Debt: A Modest Proposal

Posted in Uncategorized with tags , , , , , , on December 29, 2012 by highboldtage

link here
The recent McKinleyville bond scam (the issuance of 40 year zero coupon bonds that will cost over $50 million to repay) brought to me an idea of how to refinance the crushing debt burden faced by our young people who actually believed the hype about the value of an education.  The McKinleyville School board calls these zero coupon bonds just a “tool” in the “financial toolkit” and I see what they mean now.
For instance, if we take $10,000 face value of student debt and swap it out with zero coupon debt maturing at 50 years at 1% interest (let’s give them a break on the interest, what the hey, they are our kids and right now the banksters are getting an interest free float from the feds of $80 billion  a month)  and you get a zero coupon debt paying back $16,446.31 in the year 2062.   Why 50 years?  Well they way they talk about pushing back the retirement age our 20 somethings are looking at 50 years of work.  Right?
So using the tool of zero coupon debt our young indebted people can re-fi their student loans, each $10,000 increment paid back with $16,446.31 in the year 2062.
If the tool fits, use it.
have a peaceful day,
link here

1,000 Songs, 1,000 Sigs

Posted in Uncategorized with tags , , , , , , , , , , , , , , , , , , , on December 28, 2012 by highboldtage

I will sing 1,000 songs.   I want 1,000 sigs. 

If you want me to sing you a song email me @ and put “sing me a song” in the subject.  Throughout the next several months, weather permitting, I will do a concert in an outdoor public venue in Eureka.  Most likely this will be Clarke Plaza but it could be anywhere in Eureka.  If you want a song I will add you to my music list and I will try to give you 24 hour notice of my next show.

While you are listening I will invite you to support the Eureka Fair Wage Act.  Everything I make playing music in the next several months I will devote to raising wages in Eureka.   If you support my music (which you can for free just by showing up) you will be doing your part in raising wages for Eureka’s hardest working people.

I am also available for musical appearances, acoustic/eclectic folk, rock, roots rock, americana, country with a bit of humor and pop.

This is my/our work with Jimmie Mandich:


I am available for Arts Alive Eureka Saturday Jan. 5.  I will  give you a professional level show email me

You can hire me also to sing you a song.  I can be hired to sing you a $1.00 song, a $10.00 song or a $100.00 song.  I promise that the free song will be just as good as the $1.00 song and  the $10.00 song and the $100.00 song, they are just more expensive.  If you want to hire me to sing a song email me and put “sing me a song” in the subject just like you would for a free song but in the body of the message offer to pay me 1, 10 or 100 dollars.  I’ll add you to my music list like above and keep you notified of my upcoming shows and you can come to one of them and hear me sing your song and you can pay me.

I expect that there will be six or seven nice days in January alone so you will have multiple chances to hear songs.

have a peaceful day,


~please forward~

Reserva Privada Colorado – Colorado Seedbank/Breeder

Posted in Uncategorized with tags , , , , , , , , , , on December 27, 2012 by highboldtage

Out of the gate they are offering 10 crosses of various strains x L.A. Confidential male.  This is for FYI not an endorsement or criticism.

Reserva Privada Colorado

Reserva Privada Colorado is operated independently from DNA Genetics and Reserva Privada.  If you have questions regarding DNA Genetics or Reserva Privada strains please contact them directly as we will not be able to answer them for you.

Reserva Privada Colorado cannabis genetics are only available to Colorado registered medical cannabis patients and are only available at licensed Colorado medical marijuana centers.


Purple Confidential

Strain: Purple Confidential (Purps x LA Confidential)

Recommended experience level: Beginner to Intermediate

Female: Purps

About the mother:


  • True hybrid growth pattern, nice vigorous growth but not stretchy, plump full nuggets, and a purple hue that comes out during the flushing of the plants before harvest. The flavor is sweet and fruity with skunky undertones.

Yield: Medium High

  • 300-700g / 1000W

Flowering time:

  • 60-65 days.

Growth stature:  Medium to med/ tall

  • Vigorous growth combined with a manageable height, only stretches about 12 inches once flipped to 12/12 light cycle. This strain yields best with multiple tops, but is versatile enough for just about any method.

Nugget type and density:

  • Plump and fluffy nuggets with medium internodal spacing.

Unique strain traits and oddities of mother:

Purpling can be enhanced by the following:

  • Begin flush 10-14 days before harvest, this will allow the chlorophyll time to breakdown and the natural purple pigments to come out
  • Create a 20 degree F temperature swing between day and night cycle (i.e. if your flower room runs 85deg while lights are on, cool it during the night cycle to a temp of 65deg)

Why we chose her:

  • True hybrid vigor, and purpling trait were the big factor aside from our usual criteria for selecting the Purps as a mother.

Traits to look for in ideal phenotype:

Desired traits from mother

  • Purpling of leaves and calyxes during late flower
  • Vigorous vegetative growth
  • Low stretching
  • High resin production
  • High potency
  • Disease resistance
  • Stability, consistency, and repeatability
  • High medicinal value

Desired traits from pollen donor (LA Confidential)

  • Manageable height
  • Tight dense buds
  • Short flowering period
  • High resin production
  • High potency
  • Disease resistance
  • Stability, consistency, and repeatability
  • High medicinal value

Undesirable traits potentially inherited from parents

  • Lower than average yield (LA Confidential)
  • Slow vegetative growth (LA Confidential)


Strain: Haole (Maui Wowie x LA Confidential)

Recommended experience level: Beginner Friendly

Female: Maui Wowie

About the mother: Maui Wowie


  • The Maui Wowie is a very grower friendly strain. Compact stature for a sativa, dense heavy nuggets, and she bounces back from some abuse quite well.

Yield: high

  • 400-800g/ 1000W

Flowering time:

  • 63-70 days.

Growth stature:  Medium

  • Compact for a sativa, with nice tight internodal spacing. Very versatile in the grow room, does well as a single stalk in a sea of green, but also takes well to pinching to create several tops.

Nugget type and density:

  • Super dense colas. Very heavy resin production.

Unique strain traits and oddities of mother:

  • Compact for a sativa

Why we chose her:

  • Ease of growing, versatility, and amazing finished product. The Maui is one of the most consistent producers we’ve found.

Traits to look for in ideal phenotype:

Desired traits from mother

  • Vigorous vegetative growth
  • Significant branching
  • High resin production
  • High potency
  • Disease resistance
  • Stability, consistency, and repeatability
  • High medicinal value

Desired traits from pollen donor (LA Confidential)

  • Manageable height
  • Tight dense buds
  • Short flowering period
  • High resin production
  • High potency
  • Disease resistance
  • Stability, consistency, and repeatability
  • High medicinal value

Undesirable traits potentially inherited from parents

  • Lower than average yield (LA Confidential)
  • Slow vegetative growth (LA Confidential)


Secret Boy Scout Molestation Files Include Local, Regional Cases

Posted in Uncategorized with tags , , , , , on December 26, 2012 by highboldtage

Secret Boy Scout Molestation Files Include Cases from Ferndale, Crescent City, Fort Bragg, Ukiah, Philo, Willits, Red Bluff, Anderson, Yreka and Dorris.    Also Cave Junction, Ashland and Grants Pass Oregon.

Associated Press

Published: Tuesday, Dec. 25, 2012 – 10:04 pm
LOS ANGELES — Thousands of previously unpublished Boy Scouts of America files that detail suspected sexual abuse by employees and volunteers have been posted online.
The Los Angeles Times ( ) published the database containing redacted victims’ names on Tuesday, including material that was released earlier by an Oregon Supreme Court judge’s ruling. The names of the alleged abusers – including doctors, teachers, priests – are included.

Music For New Years Parties

Posted in Uncategorized with tags , on December 23, 2012 by highboldtage


Available for New Years parties,

Friday Dec. 28 Saturday Dec. 29, Sunday Dec. 30 and Monday Dec. 31

Bill Holmes, formerly of Two Smooth Stones.

Solo acoustic/eclectic (amplified if needed) troubador/songwriter for your New Years party.

I will do a professional level 3 hour show (3 45 min sets..) on one of these nights for your party or event.  I have done lots of club dates, special shows, fund raisers and Farmers Markets right here in Eureka, Arcata and Humboldt for the last five years.

folk, rock, roots rock, americana, country, some humor a little pop and a little blues.

Any money I make playing music in December and January will go towards our effort to pass the Eureka Fair Wage Act, a $12 an hour minimum wage for large employers, so not only can you enjoy my music but your money will go to a great cause, and it will be recycled back to the community in a positive way.

contact me put “music” in the subject.

have a peaceful day, Bill

It’s Time to Tax Empty Storefronts in Eureka

Posted in Uncategorized with tags , , , , , , , , on December 21, 2012 by highboldtage

The economy is cratering in Eureka.   How many empty storefronts in Eureka?  Anyone keeping tabs?

Its time to tax empty storefronts.   How about a monthly 25 cent per square foot tax on empty storefronts?  That would cost the landlord (many of them absentee landlords) of an empty 1,000 square foot shoppe about $250 per month and would incentify them to reduce their rents and rent to entrepreneurs.

This would bring needed revenue to the city and it would stimulate the local economy.

Any landlord who failed to pay the tax would have a lien slapped on and the city could take the property and sell it on the open market to someone who is serious about renting the property.

What do you all think?

have a peaceful day, Bill

PS Anyone who might want to talk about an initiative campaign to pass this ordinance in Eureka please contact me

Thanks to Fred Mangels for spreading the word on this proposal

If we can get about 10 people we can form a committee, firm up the proposal and present it to the city council for starters.  If they refuse to act and we still believe in it then we can pursue the initiative process.  It will take about 10 people.

The Governement Bubble – National, State, Local…

Posted in Uncategorized with tags , , , , , , , on December 21, 2012 by highboldtage

Here are a couple of reposts from HighBoldtage Mar. 2010:

The Government Bubble:

It turns out that the bubbles that we have recently experienced – housing, derivatives, banking, insurance, stockes and so on were not just economic bubbles.  It appears that there was also a bubble in government at the same time, and this bubble is now bursting.

California is the poster child for this, with recent furloughs and i.o.u.s for state payments, but this week Los Angeles is starting to lay off 4,000 employees.  Cities all over California are beginning to downsize, along with school districts and transportation systems.  It looks like before it is over a hundred thousand or more government workers in California will soon be unemployed and the ripple effects of that will be immense, particularly in Sacramento.  Also heavily impacted will be the small rural counties like Humboldt where government payrolls account for 30% or more of the local economy.

The Federal government has its own bubble to deal with, with out of control deficit spending it will be unable to bail out the states.  The states will be unable to bail out the cities and counties.  You are on your own.  The Bubble Government is bursting.

have a peaceful day,


The Government Bubble in Humboldt County

There is one trend that is unmistakable in Humboldt County government:  It has gotten more expensive very quickly, at least as quickly as those dastardly insurance rates.  In just four years, county expenditures have gone up 41%, more than 10% per year.  How does that stack up to your personal experience, Joe Six Pack?

To put this nicely, if the county government increase had been limited to roughly the official inflation rate (lets say around 3%) then the county expenditures exceed that now by some $60,000,000 per year, and rising.  It is possible that Humboldt County residents are getting $60,000,000 worth of services now from their county government  that they didn’t get in 2004.  If so please inform us.  It is also possible that we are paying a lot more for the same thing we were getting in 2004.

Why the Greek rescue isn’t going to plan

By Mohamed El-Erian

Published: April 7 2010 15:53 | Last updated: April 7 2010 15:53

It should be apparent to all by now: despite the rhetoric out of some European capitals, the Greek rescue package is not going according to plan.

Buoyed by a cyclical recovery, markets around the world have yet to recognise the complexity of this situation. When they do, it will also become apparent that Greece is part of a wider, and historically unfamiliar phenomenon – that of a simultaneous and large disruption to the balance sheet of many industrial countries. Tighten your seat belts.

Mohamed El-Erian is chief executive and co-chief investment officer of Pimco

Copyright The Financial Times

City of Arcata Bankrupt?

Posted in Uncategorized with tags , , , , on December 20, 2012 by highboldtage

Seems like they might need to use one of their lifelines:

“In a Dec. 15 letter, the DOF has told the City of Arcata that it is exercising its authority to “claw back assets that were inappropriately transferred,” and expects a payment of $2.415 million made to the county auditor by tomorrow, Dec. 21.

The stunning blow stems from the City’s efforts in March, 2011, to salvage the affordable housing projects it had been funding via the Redevelopment Agency. When the cash-strapped State of California dissolved redevelopment agencies and claimed the funds, the City scrambled to transfer and obligate those monies before they could be taken away.”


meanwhile in San Diego…..

Some of the city’s biggest bills aren’t under its control.

A court will ultimately decide whether Prop. B, which would give most new city staffers 401(k) plans instead of pensions, completely goes into effect. If Filner implements a pensionable pay freeze, the initiative is projected to save the city cash in the long run but could require the city to pay off more than $2 billion in pension debt more quickly than it would otherwise.

That will likely mean a $27 million bill next year, said Chief Operating Officer Jay Goldstone, who appeared with Filner Wednesday.

The city is bracing for another pension bill too.

The city’s retirement system assumes a 7.5 percent return on investment over the long term. The return turned out to be 0.9 percent this year and the city’s operating fund will need to cover the majority of the extra cost. Goldstone projects an $8 million to $10 million bill above its current estimate for next year.

State officials largely dictate the city’s bills in other areas.

The state eliminated redevelopment agencies in San Diego and elsewhere to balance its budget.

That left the city with a $13.8 million loan payment for Petco Park and the convention center, an amount that wasn’t factored into Sanders’ budget projections. The debt payments will increase in coming years.

Late Tuesday, the state Department of Finance notified San Diego officials some projects originally planned to be bolstered by redevelopment funds won’t get $4.8 billion the city had expected.

A fire station, an affordable housing project and homeless shelter were among those planned developments.

The city is also awaiting another related decision that could have a greater impact on its day-to-day budget. The state Controller’s Office will soon say whether the state can charge the city for previous redevelopment expenditures.

The city estimates that bill, known as a “claw back,” could be up to $28 million.

California Tax Payers Beware: Eureka City Council Pension Obligation Bond Scam

Posted in Uncategorized with tags , , , , , , , , , , , , , , , on December 15, 2012 by highboldtage



UPDATE.  I went to court on Monday it was a case management conference.  I asked Judge Reinholsen to appoint competent counsel to assist me due to the complexity of the case.  The judge indicated that I need to file a motion.  I plan to do so by monday.  I also pointed out to the judge that the Superior court might not be the proper venue for this suit.  The problem as I see it is the vagueness (and potential size) of the named defendent class “All PERSONS INTERESTED”  could mean that the proper place for this suit is federal court, since it involves due process and the constitutional right to vote.  The vagueness and broadness of the defendent class in this bizarre reverse class action lawsuit almost guarantee a lack of due process for someone.  Indeed it seems like it will be hard to empanel an impartial jury that is not part of the defendant class.

I am asking for a jury trial.  I will file a motion monday to do so, and I have included my request in my case management statement.   I have been told that I must pay $150 in “jury fees” in order to have a jury trial when the city has sued me!   Think about that citizens!   I have obtained another fee waiver (I have one for the trial now i need a separate one for the “jury fees!”

Anyone who wants to join in a court action against this illegal bond issue please email me at put “bogus bonds” in the subject.  I understand that opposition to this illegal bond issue will cut across the normal political divides.  I am a libertarian socialist but when it comes to government I am a fiscal conservative.

have  peaceful day, Bill

update DEC 21.  I received this email from Mr. David Mix, ccd to Hank Sims, Paul Rodrigues and Ms. Day-Wilson.

 to:, cc:,

Coast Outpost

Firstly, allow me to openly thank Mr. Rodrigues for responding to my inquiry concerning Eureka’s proposed POBs.   However, his contention that the proposed Validation (CCP 860) Pension Bond petition language is somehow standard verbiage, is disingenuous at the least and bordering on deceit. There simply is no such thing as standard language employed in Pension Bond Validation Petitions or procedures – they very considerably depending on the presumed municipalities’ needs and the document drafters.

The concept of a “Validation action” permitting any type of bond issue humanly possible and extending it into the depths of an unknown future, is duly credited to and promulgated by  Orrick, Herrington & Sutcliff LLP, (believed to be the leading authority on Pension Obligation Bonds) and Eureka’s Bond Counsel. The City of Eureka Validation filing (Complaint For Validation, No. DR120811, Dated Nov. 21, 2012) is the epitome of a “Blank Check”. It is completely “open-ended”  with “no holds bared”  and most assuredly designed to be exactly that.

With this Validation the City of Eureka need “never” come back to the people of your community for approval of any future kind or type of financing of City employees pension benefits. By this Validation action you give up your rights forever. But of course (as prompted by  Mr. Rodrigues) you wouldn’t want to tie the hands of future City Councilmembers.

Without citing particular parts of the City Attorney’s filing, paragraph No. 15 (page 4) and First Cause of Action,  Para No. 26, subparagraph “b.” (page 7),  pretty much sums it all up by including every type of bond issue known to man.    Additionally, please take note – re Para No. 15 must be read with extreme caution. The stipulation that Bonds will not exceed six percent (6%) or exceed thirty years (30 yrs) is patently false. Firstly, a stated annual percentage rate is a misnomer. Regardless what is stated the rate is dependant on the term length, the amortization schedule, and other factors. The real or actual rate is largely dependant on the pay -back schedule. As most people know, loans (bonds) that are end loaded or with end balloon payments with no periodic principle payments (although at the same rate) end up costing a great deal more in interest. As has been recently revealed, the School District’s CABs  real interest rate (actual pay-back) can go through the roof. There is absolutely no way of determining the real interest rate  without a complete “Maturity Schedule” (actual amortization of entire amount of principle and interest over the full term).

The 30 year stipulation is as phony as the 6% interest rate. While permitting rewrites, extensions, new and additional issues, adjusting rates, etc., etc., in the same Validation document, the possibilities are unlimited. Oakland, Stockton, and other cities are prime examples of the blatant manipulation that is possible. See City of Oakland City Auditor Report.   As far as I know, the City has not provided or included any such bond payment schedule in its petition for Validation nor has it provided one for public review.

Additionally, despite Rodrigues’ protestations, the justifiably feared CABs,are in fact (along with every other conceivable bond issue) included in the City’s Validation Petition – (See Para No. 15, page 4).

Lastly, the issue is not necessarily whether or not the proposed pension bonds are good or bad, but rather,  do the City taxpayers have or deserve the right to vote on the issue as provided for by the (1879) California Constitution, Article XVI, Section 18. The City says NOT, and is attempting to circumvent the Constitutional requirement with its CCP Validation Action  and by erroneously claiming the “obligation is  imposed by law”, (Para. No. 8, page 3 and elsewhere) and is therefore exempt from the Constitutional 2/3 vote requirement.  The City is simply wrong – clearly, the City’s obligation to its employee pension system (Cal PERS, or whatever) is not an, “Obligation Imposed By Law” and thus, NOT EXEMPT from the Constitutional requirement.  (See:  State ex re. Pension Obligation Bond Com. v.  All Persons Interested etc.  City. (2007) 152 Cal.App.4th 1386; 67 Ops.Cal.Gen. 349,351 (1984); County of Orange v.  Association of Orange County Deputy Sheriffs  et al.  (2011) 192 Cal.App. 4th 21). The City is gambling that no one will bother to file an opposition to their Validation Petition and the court will simply rubber stamp it.   Respectfully submitted for your consideration.

David E. Mix


The Eureka City Council is attempting to issue Pension Obligation Bonds (POBs) without getting the 2/3 approval of the voters, as is required by state law.  They are doing this by suing *everyone* in a local court using a technicality.  If they get away with this scam, it will be coming to YOUR TOWN SOON.

This was first reported on the Lost Coast Outpost here: with some follow up here: and some discussion at the Humboldt Herald:

As a member of the class of citizens being sued by my own city I hereby request that this lawsuit be moved into the jurisdiction of Federal Court under provisions of the Class Action Fairness Act of 2005, since this involves an amount greater than $5,000,000 and other thresholds may easily be confirmed.

ALL PERSONS INTERESTED IN THE MATTER of the Issuance and Sale of Bonds
for the Purpose of Refunding Certain Obligations that the City of
Eureka Owes to the California Public Employees Retirement System Arising
Under Section 20000 et seq. of the California Government Code, and of
the Certain Proceedings Leading Thereto, Including the Adoption of a
Resolution that Authorizes the Issuance of Taxable Pension Obligation
Funding Bonds and the Execution and Delivery of an Indenture Relating to
the Issuance of Such Bonds,  Defendants.   NOTICE! YOU HAVE BEEN SUED

The real question we need to ask is “Is the City of Eureka bankrupt?”

First of all if you have never been to this Highboldtage blog, I am no right wingnut antitax crusader.  I am a libertarian socialist heavily involved in the Eureka Fair Wage Act campaign to raise the minimum wage here to $12 an hour for big employers.

What is going unsaid is that CalPers has set the 7.5% interest rate that high in order to benefit cities like Eureka.  If CalPers lowers their anticipated rate of return, then Eureka along with other cities will have to raise its contribution in order to make up the difference.

You see how this works?

How many of you think that CalPers will actually have a 7.5% compounded positive annual return on their portfolio ten years from now?  C’mon class, Raise your hands.

At the stated 7.5 per cent expected return Eureka is substantially underfunding its pension liabilities each year and it is compounding underfunding that is outstripping interest growth.

Now they are secretly trying to convert this chronic underfunding into long term debt and without fixing the underlying problem.

You need to do something, make the tough choices.   Raise taxes, cut spending, or a combination of the two, do something besides kick the can down the road.

And at the least you need to give the taxpayers a chance to vote on this.  What the fuck?  All these 2/3 tax raise thresholds are there because you republicans wanted them.

The city of Eureka apparently owes $7.8 million to CalPers.  How this happened is of course a matter of dispute.  But no one seems to dispute that it is a valid obligation.  It could be paid off entirely in five years if the city made monthly payments of $156,296 for a total cost including interest of $9,377,760 and an interest cost of  $1,577,760.  Contrast this with a 10 year bond for $8.2 million @ 5 per cent interest.  You will pay back a total of $10,436,846 and change in 120 monthly payments of  $86,974.  That is an interest cost of $2,636,846 to the taxpayers, almost twice as much as simply tightening our belts and paying this obligation off.   You would be paying an extra $70,000 a month for five years, and then you would have five years of no payments (you would be done.)  You would save over a million dollars over this bogus junk bond scam.

When you and I are faced with a financial shortfall, we either cut our expenses or try to raise our income.  If we are sane we don’t take out a 10 year loan to buy groceries.  In the municipal government context, this means either cutting expenses or raising taxes.  I know these are tough choices but you told us how tough and smart you were when you ran for office.

So when David Tyson and certain members of the Eureka City Council and Mr. Paul Rodrigues tells you this bullshit will save money, they are lying to you.  They know better.

Here’s an idea.  An extra 1% sales tax in the city of Eureka for the next five years and use the proceeds to pay down the (current) CalPers obligation.

We could call it the “Pension Obligation Tax” or POT tax for short.

It still won’t solve the underlying problem but at least it won’t cost the taxpayers $2,000,000 in unneccesary interest payments to wall street parasites.

Do you get it?  The interest paid to CalPers actually helps fund Calpers while the  interest paid on long term Pension Obligation Bonds (POBs) is paid to speculators, interest arbitragers, thieves and wall street parasites.

This is one instance where the interests of the workers and the interests of the taxpayers are clearly aligned.

Just tighten your belt, and pay off CalPers in five years.  The interest you pay to CalPers will in the long run be in your best interest.  And you will save the taxpayers over a million dollars, or about 590 oz of the pretty yellow metal at todays quote.

have a peaceful day,



SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF HUMBOLDT CASE NO. DR120811 AMENDED SUMMONS (CITATION JUDICIAL) CITY OF EUREKA Plaintiff, V. ALL PERSONS INTERESTED IN THE MATTER of the Issuance and Sale of Bonds for the Purpose of Refunding Certain Obligations that the City of Eureka Owes to the California Public Employees Retirement System Arising Under Section 20000 et seq. of the California Government Code, and of the Certain Proceedings Leading Thereto, Including the Adoption of a Resolution that Authorizes the Issuance of Taxable Pension Obligation Funding Bonds and the Execution and Delivery of an Indenture Relating to the Issuance of Such Bonds, Defendants. NOTICE! YOU HAVE BEEN SUED. THE COURT MAY DECIDE AGAINST YOU WITHOUT YOUR BEING HEARD UNLESS YOU RESPOND NOT LATER THAN JANUARY 3, 2013, WHICH IS TEN (10) DAYS OR MORE AFTER COMPLETION OF THE PUBLICATION OF THIS SUMMONS. READ THE INFORMATION BELOW. AVISO! USTED HA SIDO DEMANDADO. EL TRIBUNAL PUEDE DECIDIR CONTRA USTED SIN AUDIENCIA A MENOS QUE USTED RESPONDA NO MAS TARDE QUE EL DIA 03 DE ENERO DE 2013, QUE ES DIEZ (10) DIAS O MAS DESPUES DE TERMINACION DE PUBLICACION DE ESTA CITACION JUDICIAL. LEA LA INFORMACION QUE SIGUE.

TO ALL PERSONS INTERESTED IN THE MATTER OF THE ISSUANCE AND SALE OF BONDS FOR THE PURPOSE OF REFUNDING BONDS THAT FUNDED OR REFUNDED CERTAIN OBLIGATIONS THAT THE CITY OF EUREKA OWES TO THE CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM ARISING UNDER SECTION 20000 ET SEQ. OF THE CALIFORNIA GOVERNMENT CODE, AND CERTAIN PROCEEDINGS LEADING THERETO, INCLUDING THE ADOPTION OF A RESOLUTION THAT AUTHORIZES THE ISSUANCE OF TAXABLE PENSION OBLIGATION FUNDING BONDS AND THE EXECUTION AND DELIVERY OF AN INDENTURE RELATING TO THE ISSUANCE OF SUCH BONDS: Plaintiff has filed a civil complaint against you. You may contest the validity of the above matter by appearing and filing with the Court a written responsive pleading to the complaint not later January 3, 2013, which is ten (10) days or more after the completion of the publication of this summons. Your pleading must be in the form required by the California Rules of Court. Your original pleading must be filed in this Court with proper filing fees and proof that a copy thereof was served on Plaintiff’s attorney. Unless you so respond, your default will be entered upon Plaintiff’s application, and the Plaintiff may apply to the Court for the relief demanded in the complaint. Persons who contest the validity of the matter described below and in the complaint will not be subject to punitive action, such as wage garnishment or seizure of their real or personal property.

DETAILED SUMMARY OF THE MATTER THAT PLAINTIFF SEEKS TO VALIDATE: The City has contracted with the California Public Employees Retirement System (“System”) pursuant to the Public Employees’ Retirement Law commencing with Section 20000 of the Government Code of the State of California, as amended (the “PERS Law”) to provide its employees with pension benefits. The City participates in separate risk pools within the System for the City’s fire and police retirees, pursuant to which the System has established “side funds” (“PERS Side Fund Obligations”) which are obligations to be funded by the City pursuant to a contract between the City and the System dated April 1, 1970, as amended thereafter from time to time (the “PERS Contract”). The PERS Law obligates the City, among other things, to: (a) make annual contributions to the System to fund the value of pension and other retirement benefits for City employees (the “Normal Contribution”); (b) amortize the unfunded accrued actuarial liability of the City under the PERS Law, which is the liability that the System’s actuary has determined to have accured under the PERS Law, but which the City has not yet paid to the System (the “Unfunded Liability”); and (c) appropriate funds for the purpose of making such contributions and meeting the City’s obligation to the System under the PERS Law. The obligation of the City to make contributions to the System pursuant to the PERS Law represents an obligation imposed by law and, as such, the City is required to satisfy such obligation from any money available in the City’s treasury. The City’s obligation to make payments to fund such retirement benefits is exempt from the debt limitation of Article XVI, Section 18 of the California Constitution. On November 6, 2012, after public notice, the City council of the City of Eureka (the “Council”) adopted the Resolution No. 2012 (the “Resolution”). The Resolution authorized the issuance of pension obligation bonds in one or more series (the “Series 2013 Bonds”) and the issuance of future additional pension obligation bonds in one or more series (the “Additional Bonds”). As authorized and approved in the Resolution, the City will issue the Series 2013 Bonds (in an aggregate principal amount not to exceed $8,250,000, an interest rate not to exceed 6% per annum and a maturity date not later than 30 years from the date of issuance). Pursuant to the Resolution, Additional Bonds shall be issued pursuant to a Supplemental Indenture subject to limitations contained in the Indenture and Resolution. Pursuant to the City’s obligation to the System under the PERS Law, the City must pay the System interest on its Unfunded Liability at an interest rate established from time to time by the System in consultation with the System’s actuary. As of June 30, 2012, based upon the actuarial report issued by the System, the PERS Side Fund obligation of the City is approximately $7,782,683. The City desires to issue Series 2013 Bonds in an aggregate principal amount equal to the sum of (a) the principal amount not to exceed the total combined amount of the PERS Side Fund obligations, (b) the costs of issuance of the Series 2013 Bonds (including underwriters’ discount), and (c) the original discount (if any) on the Series 2013 Bonds, for the purpose of refunding the PERS Contract and thereby providing funds for the System to invest. In addition, the City desires to authorize the issuance of the Additional Bonds for the purpose of refunding any additional obligations under the PERS Contract in the future from time to time. The City has filed this validation action to obtain a judicial declaration of the validity of the matters alleged in the City’s Complaint and described herein. In this action, the City seeks a declaration from the Court that, among other things, all proceedings by and for the City in connection with the Resolution, the Series 2013 Bonds, any future Additional Bonds, and the other related agreements, all as described in the Complaint and as authorized by the City pursuant to the Resolution, were, are and will be valid, legal, binding and enforceable in accordance with their terms, and that the Series 2013 Bonds, any future Additional Bonds, and the other agreements authorized in connection therewith, are obligations imposed by law and are valid, legal and binding obligations of the City under the Constitution and laws of the State of California.

YOU MAY SEEK THE ADVICE OF AN ATTORNEY IN ANY MATTER CONNECTED WITH THE COMPLAINT OR THIS SUMMONS. SUCH ATTORNEY SHOULD BE CONSULTED PROMPTLY SO THAT YOUR PLEADING MAY BE FILED OR ENTERED WITHIN THE TIME REQUIRED BY THIS SUMMONS. SI USTED DESEA SOLICITAR EL CONSEJO DE UN ABOGADO EN ESTE ASUNTO, DEBERIA HACERLO INMEDIATAMENTE. TAL ABOGADO DEBERIA SER CONSULTADO PRONTO PARA QUE SU REPUESTA ESCRITA PUEDA SER REGISTRADA DENTRO DEL TIEMPO REQUERIDO POR ESTA CITACION JUDICIAL. The name and address of the Court is (El nombre y direccion del Tribunal es): Superior Court of the State of California County of Humboldt 825 Fifth Street, #231 Eureka, California 95501 The name, address, and telephone number of Plaintiff’s attorneys are (el nombre, la direccion y el numero de telefono del abogado del demandate, o del demandante que no toene abogado, es): Cyndy Day-Wilson City Attorney City of Eureka 531 K Street Eureka, CA 95501 (707)441-4147 Cynthia J. Larsen Cameron L. Desmond Orrick, Herrington & Sutcliffe LLP 400 Capitol Mall, Suite 3000 Sacramento, California 95814 (916)447-9200 Date: November 28, 2012 Clerk, by Cecile Nesslage, Deputy 11/30,12/7,14


Excerpts below of a cautionary tale go to link at bottom for entire article.

my apologies to the author if I have overstepped fair use.  contact me

How Plan to Help City Pay Pensions Backfired


Published: September 3, 2012

Jeffrey A. Michael, a finance professor in Stockton, Calif., took a hard look at his city’s bankruptcy this summer and thought he saw a smoking gun: a dubious bond deal that bankers had pushed on Stockton just as the local economy was starting to tank in the spring of 2007, he said.

The City of Stockton, Calif., sold about $125 million in bonds to try to close a shortfall in its pension plans for city workers like police officers.

The plan was unsuccessful, and the city is now in Chapter 9 bankruptcy.

Stockton sold the bonds, about $125 million worth, to obtain cash to close a shortfall in its pension plans for current and retired city workers. The strategy backfired, which is part of the reason the city is now in Chapter 9 bankruptcy. Stockton is trying to walk away from the so-called pension obligation bonds and to renegotiate other debts.

Financial analysts and actuaries say essentially the same pitch that swayed Stockton has been made thousands of times to local governments all over the country — and that many of them were drawn into deals that have since cost them dearly.

The basic premise of all pension obligation bonds is that a municipality can borrow at a lower rate of interest than the rate its pension fund assumes its assets will earn on average over the long term. Critics contend that municipalities that try this are in essence borrowing money and betting it on the stock market, through their pension funds. The interest on pension obligation bonds is not tax-exempt for this reason.

Stockton got a similar pitch in 2007 — that it could issue municipal bonds with a lower interest rate than the California state pension system, known as Calpers, expected its investments to return annually, on average.

After laying out this daunting situation, the Lehman bankers said there was a way out: Stockton could raise the $152 million all at once in the municipal bond market, send the money to Calpers and get rid of the unpayable loan. The municipal bond market would charge Stockton just 5.81 percent interest. The city would come out way ahead.

Calpers’s investments lost about 25 percent of their value in the financial turmoil that began in 2008. That meant the city had a new debt to Calpers, compounding at 7.75 percent, on top of its debt to the bondholders. Stockton was worse off than ever, with 29 more years to go.

The company that insures the bonds, Assured Guaranty, will make the bondholders whole, but the policy it issued allows it to file a claim in bankruptcy against Stockton for the money it pays the bondholders.

and this one:

Pension bonds risky for state and local governments-Moodys

Tue Dec 11, 2012 12:49pm EST

Dec 11 (Reuters) – Municipal bonds that states and local governments use to pay for some of their public pension obligations rarely improve the issuer’s credit quality, Moody’s Investors Service said on Tuesday.

“If bond proceeds substitute for annual contributions to pension plans or are used to pay pensioners, we consider it a deficit borrowing and would view the financing as credit negative,” Marcia Van Wagner, the senior Moody’s analyst who wrote the report, said in a statement.

The negative credit implications hold especially true if the borrowing is large relative to the issuer’s budget, for example over 5 percent.

“Pension bonds are often a red flag associated with greater rigidity of long term obligations, failure to find sustainable solutions to pension funding and a pattern of pushing costs off into the future,” said Van Wagner.

Pension Obligation Bonds: Financial Crisis Exposes Risks

by Alicia H. Munnell,Ashby Monk,Jean-Pierre Aubry andThad Calabrese.

SLP#9 .

The brief’s key findings are:  •Some state and local governments issue Pension Obligation Bonds (POBs) to raise cash to cover their required pension contributions.  •POBs allow governments to avoid increasing taxes in bad times and could reduce pension costs, but they pose considerable risks.  •Those who issue POBs are often fiscally stressed and not well-positioned to handle the investment risk.

Surprisingly, POBs re-emerged in the 1990s. The 1strong performance of the stock market led some governments (and bankers) to see a potential arbitrage opportunity for taxable POBs. Two factors were important. First, taxable interest rates had come down considerably, which meant that POB borrowing costs were lower as well. Second, pension funds had increased their equity holdings substantially over the decade,9 which generated higher returns for the plans and, thus, led actuaries to assume higher future returns. The combination of these two factors was enough to convince some governments that POBs offered an attractive “actuarial arbitrage.”

While the actuarial arbitrage highlighted above may be persuasive, the issuance of POBs poses serious risks:

1) Financial: The success of POBs depends on the premise that pension returns are on average more than the cost of financing the debt. However, these assumptions may not turn out to becorrect, as the recent financial crisis has shown. Even over 15 to 20 years, the duration of most POB debt, interest costs can exceed asset returns.

2) Timing: POBs involve considerable timing risk, as the proceeds from the issuance are invested en masse into the pension plan. Dollar-cost averaging would be the more measured approach to investing large sums of money. Alternatively, some suggest that governments should issue POBs only during recessions, when stock prices are depressed.   However, this requires having some sense of what the “top of the market” or the “bottom of the market” looks like.

3) Flexibility: While the issuance of a POB does not change the total indebtedness of the sponsor, it does change the nature of the indebtedness. Requirements to amortize unfunded pension liabilities may be relatively flexible obligations that can be smoothed over time, while the POB is an inflexible debt with required annual payments.

4) Political: If the government uses the POB to fully fund the pension, it may end up with a pension system having more assets than liabilities. Such overfunding may create the political risk that unions and other interest groups will call for benefit increases, despite the fact that the underfunding still exists; it was just moved from the pension plan’s balance sheet to the sponsor’s balance sheet.

Calif Treasurers presentation on POBS :

California Government Code Sections 53550-53569

Legal Research Home > California Laws > Government Code > California Government Code Sections 53550-53569

  • California Government Code Section 53550 The following terms shall have the following meanings: (a) “Local agency” means public district, public corporation, authority, agency, board, commission, county, city and county, city,…
  • California Government Code Section 53551 The legislative body of any local agency may issue negotiable coupon bonds, to be denominated refunding bonds, for the purpose of refunding any of the…

Pension fund slams California’s San Bernardino for ‘sham’ bankruptcy

12/17/2012COMMENTS (0)

 By Tim Reid and Jim Christie

LOS ANGELES/ SAN FRANCISCO, Dec 14 (Reuters) – A high-stakes legal battle intensified Friday as the largest U.S. pension fund filed court papers denouncing the financially troubled California city of San Bernardino for what it called a “sham” bankruptcy and accused the city of “criminal behavior” in withholding payments to the pension plan.

Pension tab spurs San Rafael credit downgrade

By Nels Johnson Marin Independent Journal Posted:   12/12/2012 04:39:23 PM PST
A key credit rating agency has downgraded San Rafael’s debt, citing inadequate funding of pension liability.

The city benefits from robust employment and a vibrant property tax base, and its financial outlook is “stable” yet uncertain in light of “low pension funding and reserve levels relative to similarly-rated entities,” according to Fitch Ratings.

Oregon PERS: Risky pension obligation bonds tempt with its promise of quick returns

The Oregonian on December 15, 2012 at  9:02 AM, updated December 15, 2012 at 10:18 PM

Next year in Salem, the governor will be push some systemic PERS reforms, but lawmakers support will be critical for any passage.
Randy L. Rasmussen/The Oregonian

Towns, school boards and agencies are scrambling to forestall more layoffs, furloughs and service cuts next year as they face a 45 percent spike in costs to bail out Oregon’s underfunded public pension system.

Gov. John Kitzhaber is pursuing the fiscal discipline route, proposing cuts to the Public Employees Retirement System to offset the extra $900 million in employer charges slated to kick in July 1. There’s no assurance, however, those fixes will make it past reluctant lawmakers or be deemed legal when challenged by PERS members.
That leaves employers seeking alternatives.
There is a short-cut, one that delivers immediate dividends to cash-strapped public agencies, with the prospect of meaningful long-term savings.
It’s called a pension obligation bond. And public employers in Oregon may be ready to travel this hazardous path again.

Creditor: Stockton city manager, staff put self interest first

By The Record
December 18, 2012 12:00 PM

STOCKTON – A creditor seeking to block Stockton’s bankruptcy in its most recent arguments takes a shot at City Manager Bob Deis and his management team, accusing them of putting their personal interests first.

National Public Finance Guarantee Corp. argues that Deis opted not to take on California Public Employees’ Retirement System because as city officials he and his executive team personally are members of the retirement fund. This tainted their decisions, National Public Finance says in court papers.

From David E. Mix (On Court Validation of Oakland POBs)

Critical Legal Issues

1)  Validation Action – The City’s Validation action in 1996, City of Oakland vs.  All Persons, Case No. 772719-7 (as noted in the staff report), is not valid or binding for any other purpose except for the 1997 Bond Series Issue for which it was filed and to have judicially approved. California Code of Civil Procedures, Section 860 et. seq. clearly does dot allow for, or provide for, hypothetical or non determined future public agency actions to be pre-piggy-backed or pre-packaged and pre-validated as a single judicial action as the City is presently attempting to do with the present Bond Issue Resolution and Ordinance.

As is expressed in the Finance and Management Report the judicial order is by “default” (no opposing party and going unchallenged). It is also understood that the City authored the default order which was written and designed to apply to not only the action filed August 28, 1996 but to all other like pension bond proposals (issues) in the near or far flung future. Be that as it may and besides the City’s best efforts – it can’t be done. The 1996 filing was a “single” Validation Action, and there are no other kinds. The 1996 validation (of the then 1997 $436.3 million Bond issue) clearly cannot be arbitrarily held to encompass any and all possible future actions of or by the City simply because they may vaguely relate to the PFRS Fund or System.There simply is nothing under the law or precedence to allow or even entertain such a far flung notion. Lastly, the “default” order and the Superior Court case does not represent any kind of hearing or judicial inquiry nor determination (factually, there was no hearing or case heard by the court) or in depth analysis of the issues. Lastly, the lower court does not hold the weight of the appellate court or the supreme court and clearly the 1996 default ruling may not be cited or relied upon in any future legal challenge.

2)  Property Owner Override Taxes  – The City cites Valentine vs. City of Oakland (1983) 148 Cal.3d 139, as authority to assess and collect the 0.1575% in property tax revenue to meet its obligation to support the (now closed) Police and Fire Retirement System (PFRS).  However, the Court ruling does not provide that the City may or is permitted to use those specific tax funds to pay or support pension bonds, the principal and interest or to service the bond issue in any other way. The tax revenue is strictly restricted to the “system”, pensioners direct retirement payments and benefits. There is absolutely no law or precedence that allows those funds to be used for any other purpose other than as expressed in Valentine.

The Valentine decision (1983) predates the first Pension Obligation Bonds (1985) as introduced by the City of Oakland, thus there is nothing found in Valentine that specifically addresses the pension bond issue or that can be said to sanction or approve it. As a practical matter it is absurd to contend that the City may legally use tax revenue (public funds) assessed and collected for a very specific and limited purpose (Police and Fire Retirement System) for any other purpose other than the original intent. To use those funds to speculate on the open stock market, engage in questionable interest rate SWAP agreements, or to support bond Issues or the service thereof, or the proceeds thereof, which are in turn used for market speculation, must not be permitted and cannot be permitted. It is unquestionably a misuse of public funds.

Unfortunately, there is a clear indication that the City has been using those funds to service several different bond issues (pension obligation bonds,  New York Life annuity purchases, SWAP agreements, convoluted transactions (lease backs etc.) between the Redevelopment Agency and the City, etc.)  and, additionally using portions of the override tax and bond proceeds to pay Cal PERS premiums along with other non-authorized expenditures. It is estimated by the Retired Oakland Police Officers Association (ROPOA) that the City of Oakland has diverted (misused) more than $450 million in NYL Annuity proceeds, in violation of the NYL Annuity agreement, laws governing pension funds, and clearly the provisions of the Valentine Court. See ROPOA request for an Independent Inquiry Regarding the Expenditure and Use of New York Life Annuity Reserves (February 21, 2012).

3)  Override Tax  “Reserve Fund”  – The City has unlawfully created a Tax Override Reserve fund in excess of $115 million which it used this past year to pay down its obligation to the system or to service the outstanding bonds. As in #2 above there is nothing under the law or precedence that allows reserves or the stockpiling of excess funds or the purposeful collection of excess funds in order to create reserves or stockpiling. All funds assessed and collected are to be strictly used in support of the system (the fund) and specifically for retirement benefit payments. The City is not legally permitted to assess or collect excess override tax funds beyond or over and above what is proven to be needed to fund the system for direct retirement payments. The Override Tax may only be used for a pre-determined voter approved financial support mechanism of the PFRS fund and any annual excess amounts assessed and or collected must be returned to the taxpayer. Lastly and in addition, funds are prohibited from being used for enhanced benefits over the original provisions of the voter approved system.

Breaking News 27 Dead in Connecticut Elementary School Shooting

Posted in Uncategorized with tags , , on December 14, 2012 by highboldtage

Link to real time googlenews



Get every new post delivered to your Inbox.

Join 109 other followers