EncinitasViews
Stop the Land
Transactions?
Q. Why do some in the public think there should be a
moratorium on real estate transactions until a new
council is elected?
A. The short answer is a list. The Mossy car dealership
purchase, the Saxony land swap, the La Costa open
space, the Seeman & Lone Jack vacant land and, unfor-
tunately, the Hall Property. If the city were our real
estate agent we would have fired them long ago. We
repeatedly overpaid for land and failed to do adequate
investigations of the land before completing the transac-
tion. The squander will haunt our budgets for years.
Q. The council is proud of the Mossy dealership
purchase. They say it solves a major problem for the
city. Why is that on the list?
A. Yes, it solves a couple problems. First, it gives us a
place to put a permanent public works yard and the
Mossy site is turnkey. They had demolished the old public
works site without locking in a replacement.
They had cornered themselves. Second, it takes the
Saxony land swap off the table. Against great public
opposition, the council had decided that the Ecke’s
Saxony property was where the public works yard
Also in this issue
PROP C:
A Grassroots Success P4
City Goes
$20Mill in Debt P5
Open Space.
What Open Space? P7
September 2006
should go even though the site hadn’t been considered
as part of the original public search. Once the UT
reported that the city was well on the way to giving Ecke
$6 million worth of city land in exchange for some of
Ecke’s agricultural land that was only worth $700,000
the public came unglued. This should have been troubling
for Council Member Dalager because he had publicly
declared the land swap to be a “no brainer.” The Mossy
purchase helps to bury that plan.
The problem with the Mossy purchase was at $9.5 million
the city flat out paid too much for the property. The
city’s own appraisal says the fee simple market value
was $8.5 million dollars and that value is dubious given
information within the same appraisal. We paid at least
one million dollars too much. Probably three. We should
have been able to get a spectacular deal. At the meeting
announcing the purchase, Dalager went on and on about
how Mossy admitted that this was their only dealership
location to flounder and that Mossy had tried but
couldn’t find another buyer. Ironically, Dalager, who is
a lawnmower repairman by trade, thought that he
had out-negotiated one of our country’s most successful
car dealers.
Q. You say the Mossy site was turnkey but didn’t the
council just vote to spend half a million dollars on
converting the dealership to a public works yard?
[Turn to Can’t Afford More Sales on P2]
P6
 Can’t Afford More Sales [cont. from P1]
A. That expenditure wasn’t discussed at the meeting
they announced the Mossy purchase. We should give
the council a break here, no one could expect any site
to be perfectly set up for our needs, but… that fits
their pattern of behavior, you know, commit to a big
project without first acknowledging and adequately
planning for the entire thing.
Q. Your list of transactions includes the sale of
surplus land. Were mistakes made on sales too?
A. The best way to describe it is to say that no one
would ever sell their personal property the way the
city did. Because the council needed to inject cash into
their budget the city sold off land in Olivenhain and
an ocean view lot in Encinitas. (The Olivenhain site could
have been a nice park or fire station.) This was in 2004. The
real estate market was red hot and the method of
marketing the property certainly should have been
questioned long before the close of bidding. Only one
bid was received and few people inquired.
The city put up signs on the property
for a short time and put a dinky little
notice in the UT. That’s it. Few potential
buyers were aware of the offering.
The single bidder was a neighbor of
the ocean view lot. He had bid the
minimum bid identified in the notice.
After discovering he was the only bidder,
he notified the council that he was changing his
offer to 90K less than he had originally offered. The
council accepted the new offer after the city’s
appraiser conveniently reduced the appraised value,
which was below the publicly noticed minimum bid.
They should have never renegotiated. They should
have never accepted anything under the minimum
bid. They should have marketed the property so that a
large pool of potential buyers were aware. This was
quality property and there were a lot of speculators
looking to sink big money into Encinitas property at
that time. It was a frenzy.
Q. Was the La Costa Avenue open space property
quality property?
A. From a development standpoint that property was
useless. For some reason we paid top dollar for those
17 acres, $1.4 million in 2002. The owner of the
2
property bought the site in 1998 for $260K and public
records show that he attempted to put a single home
on the site. The property is super steep bluffs with one
flat area at the base of a ravine. The property was
unstable and would require a mammoth engineering
effort to build on. That’s the site that slid out onto La
Costa Avenue in the big rains two years ago. (Public
records show that city engineers knew the site’s stability needed to
be addressed even before the city bought the property, which was
made worse when the city permitted the developer to clear much of
the site’s vegetation. Nothing was done until after the landslide
happened. In 2005, the city estimated that half a million dollars
worth of work went into stabilizing the site.)
The seller’s politically connected real estate agent
had been marketing the property as a development
mitigation site. Basically, the site wasn’t developable.
That means three things: 1) it was going to be open
space before the city purchased it, 2) the developer
should be happy when the site finally slid across La
Costa Avenue that he didn’t own it anymore, and 3)
you would expect that the property would be worth
less than the $260k he bought it for (after adjustment
for inflation). The city got duped.
Oh, oh wait. Even if the site was
buildable, the development would
have had to meet the general plan’s
open space provisions because of the
site’s steep slopes. By the site’s well
know development restrictions much
of it would have been open space.
The whole thing wasn’t a very efficient use of open
space purchasing funds.
Q. The Hall property is the pride of the council and its
development is the reason some council members want
to be on the council. How can that be on the list?
A. The potential of the Hall Property absorbs the
hopes of the entire city. It would be great to see it
become our crown jewel. Unfortunately, we paid too
much for the property. Had we paid a reasonable
amount we would have more money available today to
put into building park infrastructure. Instead, the
council is in a position where they are taking on massive
debt to help pay for projects thoughout the city.
We certainly didn’t get the Hall property at a price
that reflected the lack of access to the site or the
uncertainty of the property’s level of contamination.
The Hall property held greenhouses for decades and
in the early years many nasty pesticides were used
there. Some people think the city purposely broke the
California Environmental Quality Act in an effort to
hide the contamination. That violation was the subject
of a lawsuit the city lost in 2004, which forced the city
to do an adequate study of the site.This should have
already been done. It should have been done before
we closed escrow and bought the property.

You should read the judge’s ruling. It isn’t a pretty

portrait of our city’s administration. We won’t know if
we bought a park site or useless toxic site until the city
releases that environmental impact report. The EIR
was due out in July 2006.

The City’s marketing of the Lone Jack and

Seeman Drive property consisted of a notice
found next to an ACE parking job and estate
sales. Any wonder why we only got one bid?

3
 PROP C: A Grassroots Success
Success stories are the ones that are fun to share. The
Encinitas Taxpayers Association with the help of the
Howard Jarvis Taxpayers Association was successful in
defeating a tax disguised as a fee in the city of
Encinitas on April 10, 2005. Proposition C, the so
called “clean water” fee, was an attempt by the
Encinitas City Council to charge its citizens twice for the
same service, thereby fattening the city’s general fund.
Clean water was chosen as the name because it
evokes great emotion in a seaside community where
the beaches and lagoons are a great asset. The only
name better than that would be the “save cute little
puppies tax.”
The challenge was to educate the voters that the
outcome of the election would have no impact on the
cleanliness of the water. For many years the city had
been complying with the all federal and state standards
and most of the conditions of a Baykeeper lawsuit
settlement. Neither the council nor the language of
the proposition offered to do anything more than we
were already doing. What was going on?
Some background information may be helpful.
Dalager, Guerin, and Houlihan voted in February
2004 to impose a $5 per month fee that appeared on
trash bills collected by our private waste disposal firm
in the name of a clean water fee. If this sounds confusing,
it was meant to be because many cities have figured
out that confusion is the enemy of the thinking man.
The City of Encinitas was creating a new property tax
without a public vote. In California, new taxes require
approval by a public vote.
In September of 2005, the Howard Jarvis Taxpayers
Association (HJTA), on behalf of residents Donna
Westbrook and Richard Nagy, filed a successful lawsuit
to invalidate the tax and forced the city to consider a
vote if they were determined to increase taxes. As with
most tax and spend city governments, a unanimous
council decided to proceed.
Unfortunately, there exists a number of slick consulting
firms that boast of their ability to manipulate public
opinion and to assist city leaders in passing tax measures.
The City of Encinitas hired three of them to the tune
of over $110,000 most likely because their proposals
promised to “produce the desired results.” They
specialize in confusing the voters, coaching the city
4
and recruiting and training citizen advocates of the
proposed tax.
The consultants recommended that the city use a
very confusing mail ballot process and that the time
for citizen input should coincide with the December
holiday season. They also coached the city to prevent
an opposition statement from being included with the
ballot, and wrote the ballot language so that it would
be very difficult for the voter to place an X in the NO
box. The deck was stacked! The entire council looked
the other way as the community grew enraged by the
lack of fair play.
Fortunately, a number of organizations became
involved in the opposition campaign. The groups
worked to diffuse any confusion surrounding the
importance of clean water and to raise the level
awareness that a ballot would appear in voters’ mail-
boxes that needed to be read with a cautious eye. Yard
signs that stressed “don’t pay twice” and “don’t be
fooled” sprung up in front yards around the city.
Against all odds, and against a city that spent at
least $124,000 of our tax dollars to defend the
illegal tax* and then try to pass the deceptive “clean
water fee,” the council’s Proposition C was crushed
by a wide margin.
Editors Note: We swiped the bulk of this editorial
from a HJTA newsletter. For a link to HJTA and a
list of the city’s “dirty tricks” used in the attempt to
fool us into paying twice see www.encinitastax-
payers.com.
*The city settled with HJTA before the judge could
make a ruling. The council is quite happy to tell
you it wasn’t an illegal tax “because a judge
never said so,” but if it wasn’t illegal why did the
city cry uncle AND pay HJTA for their legal fees?
 A 20 Million Dollar Letter to the Council

August 22, 2006

Dear Mayor Guerin and City Council Members:

I will not be able to attend the August 23 council meeting but wanted to express my opposition to the plan to
proceed with revenue bonds.

Here are my reasons:

1. The city should refrain from future major expenditures until it knows the size of its unfunded pension liability.
As you know, the 2004 liability was substantially greater than the 2003 amount. In 2005, staff received a substantial
pay and benefit increase. Unfortunately, we do not know the unfunded liability amount for 2005 (the finance
department told me the numbers will be available in October or November), but I would guess the amount is
very substantial. We should know how big this [debt] mountain is before we float more bonds. (Eds. Note: In March
2005, council members, except Bonds, voted for a 35% increase in retirement benefits for city employees. Employees were happy to pay
for some of the cost.)

2. Bonding is unnecessary now. The city could pay for fire stations and the public works yard by selling the Quail
Garden property and using the money that would have been spent on bond issuance and interest. It will be years
before we are ready to do anything with the Hall Property. The Hall Property EIR is not even done.

3. The city will pay millions in fees, expenses and interest on the bonds. The finance department told me the
issuance expenses will include over $600,000 in professional fees and charges, and over $900,000 for capitalized
interest. Annual interest will be $1 million. All these expenses and interest will be wasted because we have the
capacity to pay-as-you-go until we are ready to develop the Hall Property.

4. The rationale that we need to float bonds to save construction costs makes no sense. No one has actually projected
how much construction costs will increase over the next several years. (With new housing starts slowing, construction
costs may soon slide.). No one has attempted to compare the cost of bonding with the cost of pay-as-you-go utilizing
a realistic assessment of when the city’s projects will actually be ready to build. The financial projections prepared
in May were clearly designed to support bonding, and are not believable.

5. The city could save money by selling general obligation bonds. Is the council so opposed to a public vote on
taking on debt that it will spend extra money floating revenue bonds? (Standard bonding requires a vote of the people and
provides lower interest rates.)

6. I gather the proposed bonds will be paid from a revenue stream to be created by leasing the library from the
EPFA to the city. I have seen a lot of gimmicks in my time, but this seems over-the-top. Are you sure this plan
could withstand a legal challenge? Why start a process that seems so legally flawed? The council made the same
mistake trying to put the public works yard on Saxony Road.

I do not have an agenda here other than the fiscal health of my city. I think unnecessary debt is a bad idea. I
have not seen anything that tells me this is the right time or the right reason to sell bonds. Many of us claim to be
fiscal conservatives; this proposal is anything but fiscally conservative.

Regards,
Matt Walker

Eds. Notes: The council made their final vote to issue lease revenue bonds late at night August 23,
2006. They did so without considering how the debt payments will affect future councils from spending
on other priorities in the city or squarely addressing Walker’s points. Many in the public continue to
want an independent forensic audit of the city AND San Dieguito Water District’s finances (The council
runs the water district). Only Council Member James Bond has called for anything of the sort. This letter
was posted at http://leucadia.blogspot.com, where you can read and post commentary about this letter
and the Encinitas City Council.

5
 ECR Upzone Editorial
Most people in the community don’t realize that the Encinitas City
Council has strong backing from a small group of locally grown
megadevelopers.
Most people also think Encinitas is close to build-out.
The city is posturing to upzone developer owned properties along
El Camino Real. The developers want to build way up and out,
adding hundreds if not thousands of residential units. This will result
in even more traffic and more people in need of city services.
The plans have been in the works for years but have you heard
anything? Big changes should give rise to big public discussions.
Unfortunately, some council members have a “father knows best”
persona and don’t think you need or want to know what is brewing.
While we will still have to live by the zoning laws in our neighborhood
the megadevelopers will be given a green light to exceed their current
development rights. They will reap a huge windfall. In return, they will
burden Encinitas forever. That is why they will be so willing to hire
expensive public relations firms to go out and confuse the residents.
(They might even offer you a free lunch.)
These megadevelopers are looking to do something that neither you
nor I are entitled to do. That’s not fair. It is only made uglier by the
fact that the upzoning will be subsidized by our Transnet Tax dollars.
That’s not right. You thought those taxes were supposed to be used to
improve traffic not pack more people into Encinitas. More people
means more cars on the road.
We deserve a say. Elect candidates who will see that our Transnet Taxes
are used appropriately. Elect candidates that agree to put such enormous
changes to a vote of the people. Putting it to a vote will help daylight
developers’ requests and reduce developers’ desire to propel candidates
into office who are easily fooled or willing to put the good ol’ boys’
interest before the public’s interest.
If you would like a say, make sure you vote for candidates who will best
represent you and future generations, not their developer buddies.

What do relaxing environmental standards

and changing zoning for high-rise
buildings really have to do with protecting
open space and encouraging the use of
public transportation after a City already
reaches build-out?

Absolutely nothing.

6
 no new
O p e n Space
What keeps cities from becoming one big urban smear? people from developing, but when people buy property
It’s their publicly owned open spaces and their city’s along steep slopes they know they must develop in a
General Plan. way that reduces impacts on the slopes and improves
safety. In return they get to live next to open space. At
The desire to preserve open space and habitat were the least, that was true until recently. Now those laws apply
top priorities of Encinitas voters in the city's last public to some people and not others. In the last four years, at
survey. Maybe this is why some of our homegrown least four projects have been appealed to the council
council members promised us more open space as part because permits were issued without a reasonable and
of their original campaign platforms. We were promised equal application of the open spaces laws. In each case
more land purchases to serve as buffers and gaps the council blew off the appeal.
between suburban developments. Time has run out
and there are now only a few remaining open spaces A deeper matter is the council’s appointments to the
waiting. There have been no open space purchases planning commission. The commission is composed
since the scandalous La Costa Avenue purchase of of people that work in the building industry and the
2002. Since then, the council had the opportunity to majority has extreme views for the future of our town.
purchase prime habitat at El Camino and La Costa The commission doesn’t always operate in the public’s
Avenue. Only Council Member Houlihan displayed interest by upholding development laws and the
interest in the site, which is now being developed. general plan.
On April 20, the planning
Instead of increasing our permanent open space, the commission proclaimed they
current council has damaged the open space the city didn’t feel it was necessary
already owns. In 2005, the to uphold the open space
council looked the other way provisions as they are written.
when, without necessary permits, Instead they created precedents
the engineering department that will later cause confusion
installed a huge sedimentation for landowners, developers,
basin in the middle of an open and neighbors.
space property the city had
purchased for $1,400,000. The The commission is not a
engineer’s design was terrible legislative body. They should
from an aesthetics and habitat not rewrite the rules as they
perspective. Suspiciously, the The City “enhanced” this open space go. Instead of selectively
design required just the right off of La Costa Avenue. The work was ignoring the open space codes,
amount of excavation to fit the done without permits or public review. they should ask the council to
needs of a nearby developer Later, city officials claimed the work rewrite the municipal code.
(Barratt) who needed fill. was done on an emergency basis. This On Sept. 27 the council will
was a smoke screen to keep several be reviewing planning code
They damaged the open space amendments. They should
value. The placement of an eye scandals from picking up publicity. At
have used that public process
tackling chain-link fence in the little or no cost to the City a better
to make any necessary
middle of the open space clarifies design could have been executed. changes to the code.
the council majority’s respect
for open space and taxpayer’s money. We need to elect a council who respects open space
The council has little respect for the law either. The and will appoint a planning commission who will not
city’s General Plan and Municipal Code have provisions overstep their authority, will represent us, and have
that provide protections that keep a portion of our no professional conflicts of interest.
steep slopes as open space. The provisions do not keep

7
To receive future editions (pdf), make comments, or submit content contact
encinitasviews@gmail.com