Venezia: Curry takes on Peotter’s fiscal folly

Newport Beach Councilmen Keith Curry sent an email March 25 stating, “Last night, during a 30-minute stretch in our council meeting, we came within one vote of creating lasting fiscal damage to our community.”

Geez, that got my attention. What Curry went on to explain should concern every resident.

Councilman Scott Peotter’s move to “slash our current tax structure and implement the same tax used in Irvine without analysis or budget consideration, would have created a three-four million dollar hole in the budget during the middle of the fiscal year,” Curry wrote.

And Peotter’s idea to refund the civic center debt would incur a net additional cost of $21.6 million, according to Curry.

Addressing Peotter’s criticism of the city’s use of Build America Bonds (BABs) to finance the civic center, Curry wrote, “The city’s financial advisors determined that BABs saved $719,000 annually in debt service or $7,190,000 until the first bond call date. Money that would have been lost to the taxpayers if Mr. Peotter had his way.”

Had the city’s paid advisors recommended this, Curry wrote, “They would be subject to fine, sanction and potential disbarment by the Securities and Exchange Commission for violation of the fiduciary standards requirements of Dodd-Frank.”

He also took on Peotter’s plan to terminate the “fresh start” amortization of the California Public Employees Retirement System (CalPERs) liability approved by council last year.

“Our current plan increased our contributions to our pension obligations by $6.6 million in order to reduce our pension amortization from 30 to 19 years, saving $47.1 million,” Curry wrote. “He would instead hold these funds for purposes to be determined. His debt reduction plan, actually would increase our long term obligations.”

The City Council didn’t vote Peotter’s way, though he had the support of Councilmen Kevin Muldoon and Marshall Duffield.

Not one to take defeat quietly, Peotter fired off an email blast, once again using the city’s official seal in unofficial communications.

City Atty. Aaron Harp told me the council is tentatively slated to discuss appropriate seal usage early this month. I’ve raised the issue over the seal’s use and the overall appropriateness of Peotter’s emails in previous columns.

In his latest email this week, Peotter bizarrely compared the legal defense strategy employed by Erik and Lyle Menendez, the brothers who murdered their parents in their Beverly Hills mansion in 1989, to Curry’s approach.

Peotter called it the “the Menendez Syndrome.”

“They caused the problem and then they blame someone else for the problem ...,” he wrote. “Likewise, Keith Curry spent $143M on City Hall and now $40M on Marina Park and he borrowed $128M on behalf of the taxpayers, in non-callable bonds, to pay for the excesses. Then Curry blames me, because I want to discuss possible ways to pay down debt early.”

Peotter also defended his debt-repayment idea.

“At last week’s council meeting I requested that we agendize creating a debt repayment fund that we could direct surplus revenues to, in order to pay down debt,” he wrote. “Curry took the occasion to talk about how the bonds that he used to finance his debt couldn’t [be] repaid without extraordinary pre-payment penalties (so in other words the bonds could not be refinanced, if we wanted to). So Curry suggested that I am the idiot for even suggesting it.”

The last time I saw Peotter at state Sen. John Moorlach’s campaign headquarters on election night, I suggested it might be prudent for him to talk through his disagreements with Curry man to man, rather than in these email blasts, which I felt were unbecoming a councilman’s behavior.

Peotter said he’d tried that.

Peotter’s stance on public art funding

Then the newly elected councilman, who represents Corona del Mar, shared other ideas he’d like to bring forward, like ending city financing for the Newport Beach Arts Commission and funding of public art projects.

Peotter told me he’s spoken to members of the commission, suggesting they should be finding private funding for these projects.

Rita Goldberg, chairwoman of the arts commission, confirmed having conversation with Peotter about this, and said her group is not opposed to working with private sponsors and donors who want to partner on big projects, like theaters and such.

“But collaboration and partnerships is the key word,” she said. “The city also needs to live up to their part of the bargain.”

Goldberg does not believe the city should withdraw all arts commission funding.

Arts Commissioner Lynn Selich, wife of Mayor Ed Selich, said while she respects Peotter’s desire to be fiscally accountable, “not investing in the arts is a result of an uninformed, short-term stance that does not reflect any vision of making our city more vibrant.”

Lynn Selich said considering the city’s general fund is over $81 million dollars, the arts commission is typically allocated $40,000 annually. She now chairs an ad-hoc fundraising committee to create public-private art alliances.

Peotter also told me he may champion completing the controversial Mesa Drive recreational trail in Santa Ana Heights.

Expect more wars of words over these and other topics.

BARBARA VENEZIA lives in Newport Beach. She can be reached at [email protected].