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Editorial

Put Proposed Civic Center Transaction On The Ballot, Because...


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(Dec. 7, 2014) -- On December 9, Long Beach Councilmembers will be asked to commit taxpayers to a multi-million dollar transaction costing millions of dollars up front with increasing costs for decades when the public could have the same, or a better, outcome using a less costly financing method.

The less costly method uses bonds that require a vote of the people.

The more costly method gives a private developer/operator control of LB's Civic Center for 40 years, doesn't anticipate occupancy for a seismically safe City Hall until late 2019 (we expect later), shrinks LB's Main Library, gives up valuable property along Ocean Blvd. under LB's former courthouse...and costs more...and can be imposed on taxpayers without a vote of the people.

Which sounds better to you?

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The transaction proposed on Dec. 9 is in our opinion bad on its merits and is being pursued in large part because it avoids a vote of the people. This is precisely why Long Beach Councilmembers should put the transaction on the ballot for a vote of the people.

LB's previous Council majority (Schipske dissenting) unwisely incurred up front costs of up to roughly $1 million for a consulting firm and up to nearly half a million for outside legal counsel for preparatory costs, but what the current Council is being asked to do is much worse. The Council, with five new members who thus far haven't been parties to this deal, is being asked to allocate up to $4 million more to the consulting firm and nearly $2 million more to another outside law firm for more preparatory matters over five years prior to occupancy.

The Council is being asked -- without a pubic vote -- to commit the public to a transaction that we believe could cost the City and its taxpayers millions more than necessary with smarter financing. Those are millions that won't be available for police, fire, parks and libraries citywide. Yes, some of those costs would be spent anyway to maintain and operate our current Civic Center...but not all of them. The details are buried at the end of an attachment to city staff's Dec. 9 agendizing memo. They're on pages 24-29 of the pdf document (which are pp. 3-8 of the final exhibit to the document.) Click and scroll to those pages at this link. Read them yourself. Does this look like the proposed transaction will really be cost neutral?

Commercial property expert Terry Jensen favors a new Civic Center. He says it could be a major improvement over what we have now. (LBREPORT.com's position is somewhat different. We believe the Civic Center should be left alone and City Hall's seismic issues should be fixed as quickly as possible at the least possible cost, which is the opposite of what the City has done to date.)

Although Mr. Jensen favors a new Civic Center, he is alarmed by the financial aspects of the proposed transaction. He has told us that he believes the proposed transaction will be a major self-inflicted wound for the City and its taxpayers. Mr. Jensen took the time and effort to read staff's materials cover to cover. He analyzed their financial cost claims. He then shredded the cliche, still parroted in some quarters, that the proposed deal supposedly won't cost the City more than $12.6 million plus a CPI escalator and collapsed other aspects of the proposed financial transaction.

On November 11, 2014, staff held the first and to date only "study session" on the proposed transaction's financial details. It was a Power Point show with no businesslike memorandum. Nearly a month later now (timed for a vote during the holiday period when fewer people are paying attention) staff provided its first and to date only memo with financing details in narrative form (that it obviously already had a month earlier in narrative memo form.)

The Council's "study session" on financial details was a non-study-session.. It let an advocacy party -- city staff -- dispense all the financial information studied. If your child received a serious medical diagnosis, you'd (at minimum) seek a second opinion. Councilmembers let city staff provide the entire diagnosis and offer only one cure. Does that sound smart to you?

Throughout this entire proceeding, the City -- under several Councils and two elected Mayors -- has failed to invite ANY presentations on fiscal options (costs) or physical alternatives (seismic issues) from any sources outside city staff. Options from other than city staff have been relegated to 180 podium seconds. Good minds are like umbrellas; they work best when they're open. Does what the City Council has done to date sound intellectually honest to you?

The item as proposed will hide from the Council and public view the binding contract(s) for this proceeding until after they're signed. That will keep details of the deal invisible until after it's too late to change them without mutual consent. Does that sound open and transparent to you? Yes, that's Long Beach's current procedure on all contracts, but a number of other cities routinely attach proposed contracts, especially large ones, for Council and public review before they're done deals. This transaction now proposed eclipses others in size, scope and taxpayers consequences. It will commit the City to a financial marriage from which it will be very costly to get a divorce. If the Long Beach City Council really favored transparency, it would long ago have directed city management to attach proposed contracts (at minimum large ones) for Council and public review before they're signed. This is the proper place to start.

The threshold pretext for this proceeding has been nearly forgotten. City staff initially cited public safety seismic issues to justify what's being done but it now admits (source: Dec. 9 memo) that even if all future milestones are met (and some past ones have already been missed) that a new City Hall isn't anticipated to be ready for occupancy until late 2019. We expect that date will easily end up in the next decade.

Exactly what will Long Beach Councilmembers say if, may G-d forbid, a serious earthquake brings serious injuries or worse from a City Hall whose seismic issues have been known since 2005 and 2007? To this day, the City has never issued an RFP seeking retrofit bids that would show real world costs and the Council has instead accepted "estimated costs" proffered by city staff. Does that sound smart, when other cities have retrofitted their much older City Halls and LB has building from the late 1970's? More than one retrofit authority has told us that the cost should be much less than city staff claims.

In some respects, the Civic Center proposal bears eerie similarities to the Council's notorious 2002 "pension spike" vote. City management assured Councilmembers (who'd just been safely elected or reelected) that what was proposed was just fine. Councilmembers had political cover from city staff and even the City Auditor. Within a few years, voters threw out the Auditor and Mayoral candidate Frank Colonna ended up paying a high political price even though he'd simply joined in a unanimous Council action.

Mayor Beverly O'Neill didn't cast a recorded vote; Mayor Robert Garcia won't be casting a recorded vote (although he previously voted to pursue the transaction and has advocated it.) Nine Councilmembers -- including five whose records are thus far clean on the issue -- are the ones with the most to lose politically from enabling this transaction.

Costs that could be avoided with bonds. Escalating annual payments. Nearly $6 million more in consultant and legal costs. Losing control of LB's Civic Center for forty years. Giving up valuable property along Ocean Blvd. that hasn't been appraised. No public safety seismic remedy until late 2019 (more likely 2020 or beyond.) No alternative views on fiscal or physical alternatives in "study sessions." No RFP to get marketplace retrofit cost (not a city staff "estimate.") A shrunken Main Library (we don't accept rationalizations accepted by management's Librarian and the independent Library Foundation; we believe size matters.) No transparency in seeing the binding contract(s) until after they're signed.

Thoughtful, principled Councilmembers would be fools to join in this lemming march, This transaction deserves a democratic decision, not a dictated outcome.

If this proposal's benefits are so self-evident, its supporters shouldn't resist this. If Councilmembers offer excuses to prevent a vote of the public when it's so clearly deserved now, they will pay the price when the public next votes on them.

We presume a citywide election might cost $1+ million if consolidated with the upcoming 4th Council district special election, but that's a fraction of what the City and its taxpayers are being asked to pay when there are, we believe, better fiscal and physical alternatives. .

We urge Councilmembers to do the right thing and put this transaction on the ballot so the people can decide.

If you agree, you can download the avatar .jpg to the right -- just right click on it and save it to your hard drive -- and then use it for the next few days as your Facebook photo.

Share this editorial with your Facebook and other emailable friends and encourage them to do likewise.

LBREPORT.com will carry the Dec. 9 Council meeting LIVE on our front page (www.LBREPORT.com) and we'll report what Councilmembers do.

And we maintain an Amnesia File that doesn't forget.


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