Letter From State Lands Comm'n -- Which Oversees City's Operation of Port on State Lands -- Warned City and Port It Has "Concerns" About Whether Using Public Trust Funds For Parts Of New Civic Center Is Consistent With CA Constitution, Common Law Public Trust Doctrine And Statutory Grant to the City; Asked Council To Defer Action Or Allow Flexibility "To Make Changes To Agreements"
Deputy City Att'y Tells Council Agreements Include Sufficient Flexibility; Council Approves 9-0; Harbor Comm'n Will Discuss Dec. 17
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(Dec. 16, 2015) -- In a letter vaguely mentioned during a December 15, 2015 decisional City Council hearing but independently obtained by LBREPORT.com, the CA State Lands Commission -- which oversees the City's operation of the Port of Long Beach under state laws restricting its tidelands revenue for state-specified purposes -- informed the city that it has "concerns" about whether using public trust funds to pay for parts of the new Civic Center is consistent with the CA Constitution, Common Law Public Trust Doctrine and the state's Statutory Grant to the City.
The letter, dated Dec. 15, 2015 from SLC Chief External Affairs/Legislative Liaison Sheri Pemberton, was addressed to the City, its Councilmembers and LB Harbor Commissioners and cc'd to PoLB CEO John Slangerup, City Attorney Charles Parkin and Deputy City Attorney Rich Anthony, City Manager Pat West, State Lands Comm'n Exec. Dir. Jennifer Lucchesi and Deputy Attorney General Anthony Vogel.
"These public trust funds are generated by the Port of Long Beach, the City's Public Trust Properties and the city's oil and gas operations on public trust lands," the letter states. It notes that beginning in December 2014, the Commission's staff offered it assistance to the Port and the City, but was provided with an "initial briefing" by Port staff and copies "of the complex Agreements for the Project" on December, 3, 2015 [a year later.] "...[T]wo weeks is not enough time for Commission staff to comprehensively review the agreements and work with the City and Port staff to resolve the identified issues prior to formal action by the City Council and the Board of Harbor Commissioners," the letter states.
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In pertinent part the letter goes on to state:
The first concern is that the Agreements require the Port to expend trust revenues to improve City-owned, non-trust property...[T]his appears to be inconsistent with the City's statutory trust grant. While the Port will own 50% or more of the improvements...the Port will not have an ownership interest in the lands being improved with trust funds. In summary, public trust revenues appear to be dedicated to improving non-trust lands in violation of the City's statutory trust grant...
The second concern is that the Memorandum of Understanding [Port agreement] allows for purely municipal uses on public trust property without consideration of current trust needs for that space and how future public trust needs will be assessed and accommodated...[Under the MOU] the Port grants the City licenses to use space within the Port Headquarters Building...for purely municipal purposes serving the City's operations, appearing to be in violation of the City's statutory trust grant...Commission staff believes it is inconsistent with the California Constitution, the common law Public Trust Doctrine, case law, and its statutory trust responsibilities for the Port to use trust assets for non-trust purposes that are purely municipal in nature.
Commission staff is also interest in additional detailed information substantiating how the shared cost allocations were determined, and to what extent the City is using tideland trust oil revenue and other revenue for its share of the Project.
...Commission staff therefore respectfully requests that the City and Port defer action on these agreements until these Agreements until these issues can be resolved. In the alternative, staff requests that in any action to approve these Agreements, the City and the Port provide enough flexibility to City and Port staff to continue to work with Commission staff to make changes to the agreements to ensure consistency with the City's statutory trust grant.
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The State Lands Commission letter was vaguely referenced, but not read into the record during the hearing, by Councilwoman Suzie Price, who asked Deputy City Attorney Rich Anthony if [paraphrase] he was comfortable with the Council approving the Agreements at the Dec. 15 Council meeting. Mr. Anthony replied [paraphrase] that the City Attorney's office believes the Agreements already provide sufficient flexibility on matters at issue.
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The State Lands Commission letter's text wasn't introduced or read into the record and didn't appear on the City Clerk's list of hearing documents on the City's website prior to the hearing. Councilwoman Price indicated she was satisfied with the Deputy City Attorney's response; no other Councilmembers pursued the issue; the public (unaware of the item) didn't raise the issues...and the after the Mayor closed the public portion of the hearing, the Council went on to vote 9-0 to authorize city management to execute the Agreement in substantially similar form to a 41 page city management summary memo. (A copy of a draft contract, which omits some key numbers, is online and 750 pages long.)
The Harbor Commission is scheduled to vote on Dec. 17 on whether to authorize its Chief Executive "to execute the Project Agreement for the Port Headquarters Building, Shared Facilities, Shared Rooms and Shared Civic Plaza of the City of Long Beach Civic Center project and associated agreements and Memorandum of Understanding; Authorize Additional Spending in the amount of $16,998,173 and approve a Project Budget of $235,271,898 for the Long Beach Civic Center Project." The item as agendized includes multiple items but as of dawn Dec. 16 didn't include the State Lands Commission correspondence.
