Irony abounds. On the same day Los Angeles appointed a blue ribbon panel to study ways to reduce taxes and encourage business, the Canyon Lake City Council decided it was time to raise taxes, errr, FEES and singled out 'Professional Employees and Professional Licensees' for an additional tax, errr, FEE. (They went to great pains to point out in their ordinance that this is a FEE and shall not  be construed as a TAX.) Whatever - the net result is if you're a professional licensee it'll now cost you more for the privilege of doing business in Canyon Lake.

Exactly why they singled out 'Professional Licensees' to hit up for more taxes, sorry - FEES, is anybodies guess. Maybe the city leaders just figured that's where the money's at since it apparently isn't in the city coffers and they need more. So they determined that in addition to the customary 'Business License Tax' that owners of every business pay every year, they were going to break that down even further to "protect the public health, safety and welfare as well as provide for efficient administration of the program". That's clever - invent an unnecessary program and then tax people to run it. These people may have bright futures in state politics.

Ryan Smith, IVAR GAD, board Counsel John Giardinelli and I have been working with the City to address the madness of this ordinance since July. We have held numerous meetings with city staff and counsel and, as of a month ago, had actually reached what we felt was an equitable compromise. Unfortunately the CL Mayor visited her hairdresser a few days before the most recent council meeting and the current Ordinance 121 revision was the result of that high level conference. (No, I am not lying).

From here on out, any 'Professional Associate or licensee' including, but not limited to, realtors, attorneys,beauticians, barbers, manicurists, dentists, dental hygienists, veterinarians, doctors, podiatrists and chiropractors get to pay extra to operate in Canyon Lake. It applies to 'businesses which have a fixed location within the city as well as those which do not'. 

So if you're a Broker, attorney, doctor, etc. with an office in Canyon Lake, you will owe this extra fee for every licensee under you. If you are a Realtor from elsewhere and you list a property in Canyon Lake, they will send you a bill. They are unclear on whether they can bill your Broker for every agent in your office whether or not they do business in Canyon Lake but for sure you'll get a bill because of your sign. If you represent a buyer on a property in CL, they have no way of figuring that out so you can either just pony up the tax, errrr FEE because you are a fool, or you get a free pass. 

I'm sure all the agents from San Diego and Los Angeles (& Murrieta and Riverside) listing bank-owned homes in Canyon Lake will just be falling over themselves to send in that extra payment.Their code enforcement person is going to have a full time job tracking down these signs, sending bills, stopping by offices to count noses and ensure compliance etc. 

What? You say they don't have and can't afford to devote a full time code enforcement officer to this effort? Jeez, maybe it's gonna be a challenge collecting those payments from Ventura and the OC then. If they're lucky a few businesses in Canyon Lake might comply - everybody else will just give this program the respect it so richly deserves - doo-dah. 

The City claims this is necessary for 'disaster preparedness and in the event of an emergency'. So by their logic, if your building is on fire, instead of calling the owner of record they could just call some random Realtor or hairdresser. If your business is being burgled, don't call the manager, just call somebody that does nails in the back stall or a random podiatrist. Yeah, that makes sense. 

In summary, under Ordinance 121, the City of Canyon Lake has singled out 'licensed professionals' working in or thinking about working in the City for an additional tax, errr, FEE. They claim they need to do this for 'disaster preparedness and emergency contact', and they're counting, in large degree, on voluntary compliance because they don't have the manpower necessary to enforce it. They have invented an unnecessary program and want to charge you an additional fee to implement it. 

At this point you may be wondering what the additional tax, errrr FEE is? $20. That's right, $20. One lonely Andrew Jackson. As a representative from their Chamber asked, why is the City willing to piss off some 300+ business' still hanging on in Canyon Lake over $20? If they're lucky, they might generate a few grand. Probably not. He told them straight out "You aren't listening!". He was right. 

If there's any good news to be gleaned from this ludicrosity, they started out demanding $90 a head, they ended up at $20. Of course since the amount of annual increase is unspecified, they could decide to jack it to $90 next year now that it's in place. 

Anyway, if you're thinking about dong business in Canyon Lake, you might want to check out the City's record on business friendly ordinances before you jump. Menifee, Lake Elsinore & Wildomar are right next door and they would love to have your business. And it won't cost you an extra $20 a head to do it. 

You can read the full text of this ordinance if they every figure out how to post it to their website. 

Jeez there are times I just hate to be right. Back in May I wrote about the much vaunted 'Cash for Clunkers' program and what the likely outcome might be in my humble opinion. Well, the numbers are in - no, not the governments numbers, the real numbers the government didn't want you to see that had to be obtained through the freedom of information act. It's that whole transparency thing, you know. And it's even worse than I thought. Let's take a look at some of those numbers, shall we?

Here's the fun facts about the recently completed 'cash for clunkers' program, another well  conceived and soundly implemented government-run program. A new reportwas released by the AP yesterday using figures obtained under the freedom of information act. If the AP isn't careful with this kind of factual and statistical reporting they'll soon find themselves under siege by the White House ala Fox News. You can read the full report here: Cash for Clunkers - FAIL.

Of the 677,081 clunkers traded under the program it appears that about 15% got less than 20 mpg. 8,200 times, owners of high mileage Ford F150 pickups simply traded them for new F150's making it the most highly traded vehicle, followed by Dodge Rams and Chevy Silverados.  Many of these vehicles had over 200,000 miles on them so the owners simply swapped. Yeah, they'll be buying again soon. 

Of the estimated $3 Billion spent by the government, $562,000 went for vehicles that got the same or worse mileage than the trade-ins. Most of the trucks traded saw improvements of between 1 and 3 mpg, if at all. A total of almost $1 Billon went for this type of vehicle. 

Trades into higher mileage vehicles like Corollas, Camrys, Civics, Prius' and Focus' rounded out the top ten and accounted for about $2 billion of the total. Those vehicles brought the average fuel economy for vehicles sold under the program to 24.9, up from 15.8 on the trade-ins.

So let's do some math. 

Using round numbers, if your clunker got 15 mpg and you drove 12,000 miles a year you used 800 gallons of gas. The vehicle you purchased got 25 mpg so that same 12,000 miles only used 480 gallons. Good so far?

So the average clunker traded reduced fuel consumption by 320 gallons a year. That's pretty good, eh?

Assuming they got 700,000 of those rust-buckets off the road (actually 677,081), that saved about 224 million gallons of gas. 

It takes about 5 million barrels of oil to produce 224 million gallons of gas.

That's about 1/4 of one days consumption in these United States.

At a price of $75 a barrel (give or take), those 5 million barrels cost $350 million.

So unless I'm wrong here somewhere, the program that this administration lauds as such a great success from an economic and environmental perspective, actually cost us $3 Billion to save $350 Million. That sounds like my wife at a Nordstrom's shoe sale. 

Now line up like good like doo-bees because these same people want to sell you a health care program. I can hardy wait.

Of course that's just my opinion... I could be wrong.

A woman named Judy  brings a very limp duck, Cuddles, into her veterinarians office.

Judy lays the duck on the table and Nicki the Vet pulls out her stethoscope and listens to the birds chest for a minute.

Nicki the Vet shakes her head and says "I'm sorry, your duck, Cuddles, has passed away."

Judy was very distressed and wailed "Are you sure?"

"Yes, I'm sure. That duck is dead," replied Nicki the Vet

"How can you be so sure?" Judy protested. "He might just be in a coma or something. You haven't even done any tests for that."

Nicki the Vet rolled her eyes but turned and left the room.

Two minutes later she's back with a huge Black Labrador Retriever.

Judy watches in amazement as the dog stands on his hind legs, puts his front paws on the examining table and sniffs the duck from top to bottom. He looks at Nicki the Vet with sad eyes and solemnly shakes his head. Nicki the Vet pats the dog on the head and took him back out of the room.

When she returns she has a cat with her. The cat jumps down on the table and delicately sniffs the duck from bill to tail, stopping to lick one wing very gently. The cat sits back on its haunches, meows softly, shakes its head and strolls out of the room.

Nicki the Vet looks at Judy and says "I'm truly sorry but this duck is 100% certifiably a dead duck. A late duck. It is no more. It has departed."

Nicki the Vet turns to her computer, taps a few keys and produces the bill for Judy.

Still in shock over the loss of her duck, Cuddles, Judy  takes a look at the bill.

"$220.00" she cries. "$220,000 just to tell me my duck is dead?"

Nicki the Vet shrugged and said...

County Assessor/Clerk/Recorder Larry Ward has just released his 2009-2010 Annual Report and it's chock full of all kinds of exciting stuff - and some not so exciting.

I'll just tease you with a few details but for the full scoop you've got to follow the link at the bottom to find the details.

For example, did you know that:

• The Riverside County tax roll value (before exemptions) dropped 10.51% last year - from $242.98 Billion to $217.44?

• There are 500,292 single family residences in the County worth $120,318,983,044. They represent 57.54% of the tax base with an average value of $240,498?

• 253,364 of those received a reduction in assessed value last year averaging $144,432 and a total of $36,593,784,694 was lopped off the tax rolls as a result? That's 15.44% of the total. 

•  Indian Wells has 4 of the 5 largest homes in the county at 22,597; 20,499,; 19,188; and 18,404 SqFt. Palm Desert snuck in #2 at 20,667?

• The Palm Desert place is assessed at $26,619,674 while the Indian Wells places are $16,611,951; 12,180,881; 11,935,337 and $11,736,743? (He doesn't say if they applied for a reduction in value last year).

• There were 36,191 appeals last year, up from 12,330 in 2008 and 2,909 in 2007. Remember those days?

• In Murrieta there were 19,113 homes re-assessed under Prop 8. Gross Value Assessment rolls dropped 14.92% from $11,885,525,613 to $10,112,353,803?

• In Temecula there were 16,110 homes re-assessed. GVA dropped 11.33% from 13,537,557,997 to $12,003,546,129?

• The top business in the County based on Business Personal Property was Abbott Vascular. International Rectifier came in at #14?

Recognizing that the average Realtor® is about 55, the average buyer is under 30, NAR started an aggressive recruiting effort under President Richard Gaylord from Long Beach. The program was officially inaugurated in October, 2007. There are fewer than 20 chartered groups In California with the state association itself just being chartered in September.

Connie Lynch, SRCAR CEO is ecstatic. “Our effort here really got its genesis in 2008 as a pet project undertaken by Chair-elect Wes Ives. Wes has been very supportive of this group and those efforts really paid off.”

“Their first meeting was in May of this year and the energy has just been amazing. Zack Smith, Dane Wunderlich and Luz Acosta just kind of took the ball and ran with it and today our meetings have 20 – 30 young professionals – even more at their mixers. This group constitutes the future leaders of our industry and our community. Our Association is very proud of the work they’ve done to get recognized.”

Chair Wes Ives was equally pleased to see this effort come together. “I think it’s just terrific. At a time when everybody in our industry is down, we’ve got these young people who are charged up and building good solid businesses. The real estate industry is undergoing some major changes today and these kids are going to be on the leading edge of what emerges.”

“Mentoring and networking are big components of what we are about”, according to 2009 YPN Chair Zack Smith. “Dane and I went to Sacramento in June for Legislative Day and while we were there we attended one of the first statewide YPN meetings and found there were hundreds of people just like us looking for this opportunity. The Association has been very supportive and we are really pleased to have reached charter status in just 6 months. We’ve got some great members.”

The S.R.C. Chapter of the Young Professional Network is operated in conjunction with the Hemet/San Jacinto Association of Realtors®. Membership in the group isn’t limited by age, more by mental age and members must be affiliated with the real estate industry – Realtor®, lender, escrow, home warranty, etc.. For more information on meetings and events, please contact SRCAR YPN at 951-894-2571 or visit SRCAR.org.. To find out more about forming chapter in your area visit: http://www.realtor.org/ypn

In a nod to bi-partisanship, Gov. Schwarzenegger has sent a clear message to one his Democratic legislators. Gov. Arnie always includes a note attached to a bill that he signs or doesn't signs letting the bills author know why he is taking the action he did. It's usually a boilerplate note either congratulating them on proposing a bill that serves the people, or telling them to try harder next time. 

In addition to his boilerplate note, he attached the following missive to a bill he didn't sign authored by San Francisco Assemblymember Tom Ammiano. It should be noted that Ammiano was a prominent heckler of the Gov when he attended the State Democrats Convention last month at the request of former Speaker Willie Brown. Among other taunts, Ammiano is reported to have called the Gov a 'liar' and shouted that he could 'kiss my Gay ass' as he walked out of the event. So here's the Gov's message:

Now that in itself is hardly newsworthy - except that some sharpie noticed another message embedded in the text. And it's not that hard to find - just one of those simple 'Read Down the Left Margin' kind of things. If you're having trouble seeing it, the message begins with 'F' and the second word is YOU.  

When asked about the note,  the Gov's office replied:

"My goodness. What a coincidence," said Schwarzenegger spokesman Aaron McLear. "I suppose when you do so many vetoes, something like this is bound to happen."

Silly stuff - and if you want to read what the San Francisco Guardian had to say about the matter (as if you can't imagine what the liberal blogs are saying) just click here: Arnold to SF - FU

Maybe not.

It's a Zen kind of thing, knowing The Truth is out there... and on MySpace of all places. 

I thought I'd found The Truth on ActiveRain a time or two, but it just turned out to be posts from Lenn Harley or Ken Cook - true enough but not The Truth apparently.

I haven't found The Truth on FaceBook or Twitter, although there's some funny stuff on there and I think some of it's true. 

No Truth on YouTube or LinkedIn or Plaxo. 

Certainly no Truth in Sacramento or Washington DC.

There are over 124,000,000 Google hits for The Truth, including one that lays claim to The Truth.com, but they're just an anti-smoking website that runs those edgy commercials. True maybe, but not The Truth.

I used to discover what I thought was The Truth with my friend Jack Daniels but I'd always forget it by the next morning - so it may have been an illusory truth, not The Truth after all.

Carlos Castaneda clamed to have found The Truth using mescaline & peyote. I tried that route once and got sicker than a dog and that's The Truth.

Since it was just spelled The Truth I don't know if it's The Cosmic Truth or The Truth and nothing but The Truth (so help me God). I suspect that The Truth would have a bolder signature - THE TRUTH - with trumpets and a drumroll when you click the link. I don't know.

I suppose I should just click over there and find out what the hell's going on with The Truth.

But to be honest - I don't know if I can handle The Truth. I'm a little afraid of The Truth.

Will it be The Honest Truth, The Ugly Truth, The Undisputed Truth, The Naked Truth?

Thank heaven it's the weekend - it gives me time to uncover The Truth, deal with The Truth and see if I can twist The Truth to my own purposes.

I'll let you know...

When you start your day attending two meetings where the speakers apologize for being depressing, the rest of your day can only improve.  That was my day today. 

I started with an early morning meeting of the Southwest California Economic Development Corporation where we were treated to remarks by John Rossi, General Manager of Western Municipal Water District. Apologizing for depressing us, John presented a factual summary of where our state is waterwise and how the water districts are dealing with our current situation. Having toured the Northern end of our state water supply system last year from Oroville Dam to LA, and having written about the issue on numerous occasions, I believe that rather than being depressed we should see this as a call to action. As Rossi did when he encouraged us not only to use our resources wisely but to engage our legislators in recognizing the complexity of the issue and dealing with it comprehensively.

With over 70% of SoCal water deriving from the north, another 25% from the Colorado River and about 5% from ground water & desalinization,  it's clear where the answer lies. Prayer. But in addition to prayer, the water department is also working legislatively through the current 'special session' to address both conservation and infrastructure issues. Until and if those solutions ever bear fruit, they will also continue to squeeze their customers. Oh, by the way, if those solutions do bear fruit, they will still continue to squeeze their customers. Why? Because they can. And any fix - even the inadequate Democrat proposals, will come with a big price tag that somebody has to pay for. 

Here's a fun factoid. During the past year our primary wholesale supplier of water, Metropolitan Water District, has instituted rate increases of nearly 40%. These increases were designed to encourage conservation - a very admirable goal and one that will certainly help us deal with the problem. There's another 20% increase due in a month or two. Why? Because our conservation efforts have been so successful at reducing water consumption that Metropolitan has less revenue coming in to service their bond debt and fixed expenses. So they need to raise rates again because the first rate increases were so successful at changing our consumption habits. Damned if you do, damned if you don't. Is there a win-win in here anywhere? 

Think our bills will go down anytime soon? The you should have been to the EWDC luncheon featuring Senator John Benoit and Assemblymembers Brian Nestande and Kevin Jeffries. The operative words here were also 'depressing' and/or 'frustrating' by turns, for the state's economic outlook, any chance for real reform and for the water picture.

Assemblymember Jeffries, who was appointed to the state special commission on water, remains hopeful that some compromise solution will be reached soon, possibly as early as this coming week. He bemoaned the fact that water has become so politicized that true progress remains elusive. While the party in power in Sacramento thinks the problem can be solved by merely conserving more and restoring the Delta, the minority view prefers conservation coupled with additional infrastructure to provide long-term solutions. Capturing and storing rainfall and snowpack for future use, channeling current water resources without adversely impacting the Delta Estuary, new dams, an alternative conveyance AND continued conservation are all part of a comprehensive solution. 

Our current drought is caused in equal parts by nature and regulation. Our dams truly are down by 1/2 to 2/3rds as a result of rainfall & snowpack the past few years. It is regulatory by virtue of the fact that judicial decree has determined the rights of the Delta Smelt take precedence over 18 million water users, farmers and food producers throughout the central and southern parts of the state. There are also complex water rights issues with people at the watershed source and with environmental groups concerned about preservation of the Delta. It wouldn't be an easy fix even on a level playing field - given the way our legislature operates it's a wonder anything happens at all. 

All panelists agreed that jobs are the answer for our state. "Not bigger government, not more taxes, more jobs", according to Senator Benoit.  "Taxes up, jobs down, legislature ineffective", according to Jeffries. '450,000 jobs lost this year at an average $68,000 per, 150,000 jobs created at an average of $52,000 per - not good' according to Nestande. 

Jeffries also pointed out that the party in power, regardless of which party, has shown they will do darn near anything to perpetuate that power. There was some disagreement as to whether term limits have been effective at making our state more governable but all agreed that term limits have resulted in shifting power from the people who should be accountable, (our legislators), to people who are not accountable, (staff and lobbyists). The people who make the decisions aren't around long enough to have to deal with the consequences of their actions so what's their motivation to work for the long-term good? (Please keep in mind that all legislators are not altruistic by nature. Some just love the power, some just love the perks, and some just want to have a lobbyist mistress who wears a thong).

Agreeing that reform must occur if California is to turn itself around in any meaningful and sustainable way, they admit that if the legislature is not prepared to reform itself then the public will have to do it for them. When asked about the prospect of that occurring through Constitutional Convention, Jeffries voiced some concern about what could result from opening that can of worms while Nestande opined that any result probably couldn't be much worse than the status quo. 

Depressed yet? You shouldn't be. This is California politics at its best. The more you know, the better prepared you are to deal with it. If you're not at the table, you'll surely be on the menu. Sometimes you might be anyway. Of course that's just my opinion, I could be wrong.

A recent issue of Time Magazine carried an article by The Curious Capitalist / Justin Fox entitled 'Get Homes Off Welfare" .  I'm not sure if Fox really is a capitalist at heart, or if he's just curious about the concept. Either way he makes a semi-literate case against the housing industry in general and the governments support of same. He bemoans the fact that homeowners are 'at the receiving end of a truly staggering array of subsidies and tax breaks', hard to put a price tag on but 'clearly in the hundreds of billions of dollars a year.'

He claims that even with all this aid homeowners aren't doing so well and then trots out the old canards about real estate values falling by $4 trillion the past couple years and the millions of foreclosures and people 'booted from their homes'. Like that's somehow 'housings' fault. He bemoans the fact that 80% of mortgage loans this year are backed by the government and their minions Fannie, Freddie & Ginnie at lower interest rates than private market mortgages.  He lumps in the Federal Reserve for good measure blaming them for artificially lowering interest rates by buying up Freddie, Fannie & Ginnie securities.  All of this, according to Fox, puts taxpayers on the hook when things go disastrously wrong, as they so spectacularly have the past couple years.

He goes on to slam the $8,000 first-time homebuyer tax credit and then progresses to the mortgage interest deduction, property tax deductions and capital gains tax breaks , which he believes cost the government at least $100 Billion this year and every year.  With nary a nod to the economic benefit and the hundreds of billions in revenue & jobs provided by housing, building and ancillary industries, he goes on to complain that the bulk of tax benefits flow to the upper end of the income spectrum and to the coasts. 

Let me get this straight - Justin thinks homeowners aren't taxed enough and that too many breaks go to the wealthy and the coastal elitists. Hmmmm, I may have just figured out his position on capitalism after all. That's curious. 

Then he posits that subsidies have a side effect that 'push us to buy rather than rent'. These dastardly subsidies  not only push us to buy, but force us to buy more home than we can afford & drive prices up and that subsequently our homeownership becomes a 'ball and chain' if workers want to move where jobs are more plentiful. He says  that subsidizing housing resulting in appreciating home values is good for sellers but not renters or first time buyers. Maybe he should peddle that claptrap to the 350,000 first-time homebuyers  who have recently become homeowners thanks to this subsidy. 

In fairness, every point Justin raises is valid. But as with so many in the media today, he appears to be in touch with only 1/2 the picture, the half that supports his agenda. Or maybe he was just on deadline and didn't have time to do an objective article, or he just thought this would be clever or something. Who knows. 

He closes his article by stating the obvious - that rising prices are always good news for real estate agents, mortgage lenders and homebuilders.  (Jeez, Justin, what might you conclude about our fortunes during the past 3 years of plummeting prices?) 

This part I love. "These groups are powers in Washington. The National Association of Realtors gave more money than any other group to candidates in the last election ($4 million). Its 1.1 million members can do a lot of lobbying." Justin, you got that 100% correct right there. 

Finally he refers to Dwight Eisenhower's caution against the 'military-industrial complex' by issuing a call-out to the 'real-estate industrial complex'.  I love that. Sure maybe it's just little old Justin Fox, the Curious Capitalist, who has recognized that fact, but it's a start.

I don't know about you but when it comes to advocating on behalf of homeowners, or standing up for private property rights and supporting the industry that drives our economy, I'm damn proud to be part of the real-estate industrial complex. Except, Justin, for future reference, we call ourselves 'The Realtor Party'. Try to get it right if they give you any column inches in the future. Of course that's just my opinion... I could be wrong.