Los Angeles Firemens Credit Union

Is LA Telling Investors the Whole Truth?

LA WATCHDOG - The City of Los Angeles is currently in the market to raise about $1.3 billion in Tax and Revenue Anticipation Notes (the “Notes”). 

The proceeds from this offering will be used to finance its early payment of $900 million to the City’s two seriously underfunded pension plans ($11.7 billion underwater and only 65% funded) and provide $400 million in short term working capital to fund the City’s operations until January when it receives a significant portion of our real estate taxes. Our lunar cratered streets are an everyday example of the failure to repair and maintain our infrastructure. Add to this our crumbling sidewalks, flickering street lights, dilapidated parks and recreational facilities, aging sewers, and run down City’s buildings, as well as the storm water infrastructure that is projected to cost $8 billion over the next decade. Nor does the Information Statement include details about the multibillion investment required to upgrade the City’s Stone Age Information Technology.  Right now, the City’s Management Information System is incapable of generating reliable, real time information and financial data that is needed to effectively manage a $6.9 billion organization with over 32,000 employees. Nor does the Official Statement adequately disclose the impact of Proposition 26, the Supermajority Vote to Pass New Taxes and Fees Act.  What are the consequences of DWP’s proposed 26% increase in our electricity rates? And what is the impact on the City’s General Fund if the 8% Power Transfer Fee is subject to a City wide vote?  The lack of disclosure is surprising given the recent litigation filed by the Ratepayers of Redding Electric Utility as well as the considerable legal research and related discussions by and with the City Attorney’s office. On the other hand, while the Information Statement does a data dump on the City’s pension systems and other post retirement benefits, it does not disclose the dramatic impact of on the City’s annual contribution of a lower, more realistic Investment Rate Assumption or the lower rate’s impact on the unfunded pension liability. Nor does it discuss the impact of any changes in the very lenient accounting rules. Once again, the City is projecting yet another budget deficit, one of only $281 million for the following fiscal year beginning July 1, 2012.  The underlying driver of this budget gap is the $296 million increase in employee related costs. And this shortfall does not include the necessary expenses to even maintain our deteriorating infrastructure. In this show of bad faith, almost 40 days after the request for a list of owners of the 2010 Notes and the 2010 Judgment Obligation Bonds, he refused to release the names of the institutional investors, even though their holdings are a matter of public record.  Rather, he cited the need for confidentiality of the individual buyers, ignoring the fact that institutional buyers such as Fidelity, Vanguard, Blackrock and Northern Trust are the major buyers of short term paper for their California tax exempt money market funds.   (Jack Humphreville writes LA Watchdog for CityWatch He is the President of the DWP Advocacy Committee and the Ratepayer Advocate for the Greater Wilshire Neighborhood Council. Humphreville is the publisher of the Recycler -- www.recycler.com . He can be reached at:   –cw Our lunar cratered streets are an everyday example of the failure to repair and maintain our infrastructure. Add to this our crumbling sidewalks, flickering street lights, dilapidated parks and recreational facilities, aging sewers, and run down City’s buildings, as well as the storm water infrastructure that is projected to cost $8 billion over the next decade. Nor does the Information Statement include details about the multibillion investment required to upgrade the City’s Stone Age Information Technology.  Right now, the City’s Management Information System is incapable of generating reliable, real time information and financial data that is needed to effectively manage a $6.9 billion organization with over 32,000 employees. Nor does the Official Statement adequately disclose the impact of Proposition 26, the Supermajority Vote to Pass New Taxes and Fees Act.  What are the consequences of DWP’s proposed 26% increase in our electricity rates? And what is the impact on the City’s General Fund if the 8% Power Transfer Fee is subject to a City wide vote?  The lack of disclosure is surprising given the recent litigation filed by the Ratepayers of Redding Electric Utility as well as the considerable legal research and related discussions by and with the City Attorney’s office. On the other hand, while the Information Statement does a data dump on the City’s pension systems and other post retirement benefits, it does not disclose the dramatic impact of on the City’s annual contribution of a lower, more realistic Investment Rate Assumption or the lower rate’s impact on the unfunded pension liability. Nor does it discuss the impact of any changes in the very lenient accounting rules. Once again, the City is projecting yet another budget deficit, one of only $281 million for the following fiscal year beginning July 1, 2012.  The underlying driver of this budget gap is the $296 million increase in employee related costs. And this shortfall does not include the necessary expenses to even maintain our deteriorating infrastructure. In this show of bad faith, almost 40 days after the request for a list of owners of the 2010 Notes and the 2010 Judgment Obligation Bonds, he refused to release the names of the institutional investors, even though their holdings are a matter of public record.  Rather, he cited the need for confidentiality of the individual buyers, ignoring the fact that institutional buyers such as Fidelity, Vanguard, Blackrock and Northern Trust are the major buyers of short term paper for their California tax exempt money market funds.   (Jack Humphreville writes LA Watchdog for CityWatch He is the President of the DWP Advocacy Committee and the Ratepayer Advocate for the Greater Wilshire Neighborhood Council. Humphreville is the publisher of the Recycler -- www.recycler.com . He can be reached at:   This e-mail address is being protected from spambots.

Not for Profit-Not for Charity-But for Service | My LA Fire CU

Dear Members — I have reactivated my blog to engage in an open conversation with you to provide information, answer your questions, and keep you up to speed on Credit Union activities and plans. It is no secret that the Fire Service is being financially impacted more so now than at any time since the Depression of the 1930′s. Members are struggling financially and looking for assistance and answers. Let’s take some time in this blog, to communicate and move to positive outcomes.

During these economic challenges a refocus on the roots of the credit union movement may be in order. “Not for Profit – Not for Charity – But for Service” has been the credit union industry motto for over 100 years, and LAFCU’s philosophy for over 75 years. A credit union is a cooperative financial institution that is owned by its members and operated for the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members.

The most important difference between Banks and Credit Unions might be this: Banks are for profit and credit unions are not. Though credit unions have existed in America for over 100 years – and nearly 100 million Americans already belong to a credit union – many still don’t think of credit unions as being free from profit motives. Credit Unions function like banks in that they take deposits and make loans and provide a wealth of financial services, but exist solely to serve their members, never for profit.

Here are a few additional ways that credit unions and Los Angeles Firemen’s Credit Union are unique:

Los Angeles Magazine

California tax reporter

Finance

California services register

Personal income tax law