The EID board meeting on Jan. 27 was important. Refinancing of $130 million of EID bonds to secure significant financing savings was the topic. Relevant discussion of the refinancing was buried in a 373-page packet that covered a review of EID’s investment returns to an update on the Flume 41 project that should have been postponed.
What interested member of the public will plow through 373 pages to understand if the refinancing is a good idea? The projected revenues to justify the district’s ability to repay the new bonds were buried on pages 196-221. They included revenue projections beyond 2014 that haven’t been approved by this board but that was not in the resolution presented to the board. Director Prada did the right thing and abstained although the resolution passed with three “for” votes.
The resolution presented did not disclose that future payments depend on unapproved rate increases beyond 2014. It did not include an additional $65 million of debt financing buried in the financial projections that start on page 215 of the board packet. Furthermore, there was no discussion of insurance or reserves in case of a potential default. The Citibank representative had to explain that to the board with no visual presentation.
Does EID staff intentionally provide voluminous documents to the public and the board to obscure the issues or are they not capable of distilling the relevant issues into a short summary? Who sets the agenda for these meetings? Why would you schedule a routine report for a meeting that includes a major financial decision?
Public board meetings should make decisions transparent to the public. The documents for the meeting should be divided into backup information such as the legal document for the bond offering (175 pages) and a summary description of the deal that could be done in three to five pages. And, EID received an award for excellence in financial reporting. If this meeting was any indication, the bar must be low.
El Dorado Hills