Fifth in a Series: Memo to Councilmembers, cc'd to Taxpayers, re the Civic Center Proposal
by Terry Jensen
(November 21, 2014) -- To: Councilmembers Gonzalez, Vice Mayor Lowenthal, Councilmembers Price, O'Donnell, Mungo, Andrews, Uranga, Austin, Richardson, cc to my fellow taxpayers:
I've been watching the Council's actions at all of its meetings and study sessions regarding the proposed Civic Center transaction.
I watched the video of the City Council’s Nov, 11, 2014 "study session" that was supposed to discuss the transaction's financial aspects that could affect the City and its taxpayers for decades.
City staff didn't provide taxpayers or Councilmembers with even a businesslike memo. It displayed "Power Point" slides that weren't disclosed online prior to the meeting. This prevented the public, and perhaps you as Councilmembers, from preparing genuinely probing questions. Two Councilmembers (Assemblyman-elect O'Donnell and Councilman Andrews) didn't attend. One Councilmember asked if the live-work aspect of the project would include child care.
I was aghast at inconsistencies I heard from staff. Some of staff's figures aren't consistent with what staff previously told Councilmembers and taxpayers
City staff has lost all credibility with me on this. The Council should agendize at least one additional study session to deal seriously with the financial aspects of this proposed transaction. That includes inviting presentations on financial issues, options and alternatives from sources other than city staff. No glitzy artist renderings. Numbers.
Staff was allowed to present what amounts to advocacy for the better part of an hour. In contrast, taxpayers were given 180 seconds per speaker to rebut staff's claims and present alternatives. This reflects what I believe is city staff's fear of facts. Staff is denying you details you deserve to hear. What's taken place to date has been advocacy, not study. As Councilmembers, you deserve to hear fiscal issues, options and alternatives that city staff hasn't given you.
At minimum, you deserve to have the following questions answered before being told to vote on what in my opinion is a seriously flawed proposal.
Has it occurred to city staff that the $12.6 million it says it costs to operate and maintain the Civic Center is by objective measures excessive and ought to cost much less?
Doesn't it concern you that the private sector can manage and maintain Class A office buildings like City Hall for approximately 55% less than what staff says it costs the City? The savings from this could be roughly $4 million per annum. That money could be available to you for General Fund items...but it won't be if you vote for the transaction as proposed.
Hasn't staff lost credibility with you by first claiming that the City "won't pay a penny more than $12.6 million" but now admits it could cost the General Fund between $4.6 million and $9.1 million (depending on whether the Port can be maneuvered into the deal)? To be clear: this additional cost is on top of what the City has already spent to date, a sum that hasn't been quantified publicly.
Shouldn't you be concerned that staff now acknowledges that moving 110,000 square feet of offsite leases to the new City Hall "may not" happen, but staff hasn't reduced the size of the proposed new City Hall building? And staff continues to keep the $2.1 million in lease "SAVINGS" in the $12.6 annual lease payment.
Does it concern you that additional Civic Center costs (that staff acknowledges could be in the millions) will impact our already fragile General Fund, affect our already understaffed Police & Fire budgets, reduce the City's ability to fix its infrastructure and make huge pension payments?
Is anyone troubled when staff claims using a "public private partnership" P3 is the only way to get a quality building and claims you'd get lower quality materials and a lesser quality build out using other methods? Those of us in the private sector know these assertions are laughable and without merit.
Doesn’t it make sense to have an independent appraisal of all the publicly owned land that staff proposes to give the private developer/operator so you'd responsibly know the value of what you're giving away before simply accepting what two developers say it's worth?
Isn't it disconcerting to learn that in addition to making annual lease payments of $12.6 million plus generous CPI escalators, staff has brought you a proposal that would leave the City exposed to pay for its electricity plus annual escalators? That's on top of the $1 million the City already pays for power and is included in the $12.6 million staff says the City is required to pay.
Given the enormous budgetary challenges we face, perhaps now is the time to slow down, take a deep breath and demand staff prepare accurate and supportable information (that doesn't conflict with its previous information) before you're told to make a nearly irreversible, costly decision . You owe it to taxpayers, and to yourselves, to hold at least one additional study session to at minimum hear financial details, options and alternatives at reasonable length -- not filtered and spun by adversarial city staff -- that could provide you and the City with a new Civic Center at less cost. .
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Previously in Mr. Jensen's Special Series on Civic Center: