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To enjoy on-demand replay VIDEO coverage of Long Beach Veterans Day Parade, click here. | AND for VIDEO and FURTHER INFORMATION on EL DORADO AUDUBON, CLICK HERE. Paid for by El Dorado Audubon |
| (Dec. 19, 2016, 10:55 p.m.) -- On Tuesday Dec. 20, the City Council will consider whether to obligate LB taxpayers to spend $10.7 million dollars from LB's Tidelands fund, in annual amounts ranging from $1.0 million to $1.7 million starting in FY17 and continuing to FY 2025, to help fund an Aquarium-desired expansion.
Although city management's Dec. 20 agendizing memo and other documents use the term "grant," to our knowledge the Council hasn't held any public discussion or taken any voted actions that legally obligated the City to give the Aquarium $15 million for its expansion from LB's Tidelands. Accordingly, in our view, the City doesn't "owe" the Aquarium $10.7 million "remaining" under a supposed "grant"...but all of this could change if a Council majority approves the Dec. 20 agendized action. [Scroll down for further.] |
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The City Manager's FY13 Budget Executive Summary (p. CM 28) stated in its "Tidelands Operating Fund" section that the "savings from refinancing 2001 Aquarium bonds in 2012 "provides an opportunity for the City to include in the Tidelands Operating Budget, a $1.5 million challenge grant to encourage private investment in the Aquarium of the Pacific facility. This payment is anticipated to last ten years..." Attachment B (page CM 39) only listed FY13 budgeted "enhancements" under "Tidelands Operating Fund" that included: "Challenge Grant funding for the Aquarium of the Pacific capital improvement program. Proposed $1.5 million yearly for 10 years. Beginning in FY14, this funding is offset by the $1.1 million annual savings from the recent refunding of Aquarium bonds (Citywide activities.)" City staff's agendizing memo acknowledges that the Council's FY13 action didn't create an ongoing obligation, calling it a "non-binding program." In other words, in the deciding whether to impose the legal obligation on LB taxpayers now, Councilmembers have the choice to say "no."
LB taxpayers have already spent the following sums from LB's Tidelands for the Aquarium expansion: $1.5 million in FY13; $1.5 million in FY14; $1.3 million in FY15...until the decline in oil prices prompted city management to recommend, and the Council to agree, to put all Tidelands projects under review in FY16, with no Tidelands payment for the Aquarium expansion in that year. City management did include $1.5 million in the City's FY17 budget (approved by the Council in Sept. 2016) and in its agendized item, management proposes annual LB taxpayer payouts for the Aquarium expansion as follows: :
For the period between 2018 and 2023, city management says it plans to get the $1 million annual sum from two sources: half from bond refunding savings and half from Tidelands operations...but management cautions: "It is intended that the annual $500,000 from Tidelands operations will come from oil revenue above current operating needs, although that is not certain; if new revenue is not available, budget adjustments may be necessary." [Management's memo doesn't give examples of what budget items might be "adjusted."] These sums are on top of roughly $6 million that LB taxpayers continue to pay annually [source: city staff Dec. 20 agendizing memo, p. 1] to cover debt service on bonds to support the Aquarium. That's despite the fact that LB taxpayers were told in 1995 that the Aquarium should be able to cover its debt service from its attendance and operations (and anyone who doubted this was a "naysayer.")
Amnesia File: In the public interest, LBREPORT.com provides pre-internet magnetic tape audio (less than optimal quality) of salient portions of the August 1, 1995 City Council meeting included votes that put public money at risk if Aquarium visitors and revenue didn't materialize as predicted. What's really behind the costly Dec. 20 Council item, scheduled five days before Christmas? As described in city management's agendizing memo: The Corporation [Aquarium] is planning to borrow money to construct the Pacific Visions Project. To satisfy the needs of the lending institution that provides a loan, the City's Grant payments to the Corporation will need to have priority over all Tidelands operating needs, except for debt service payments on existing Tidelands bonds (the Aquarium and Rainbow Harbor) and any Tidelands bonds expected to be issued in the future.
As to financial risks, city management's memo states: There may be some financial risk: The Pacific Visions Project is an impressive addition to the Aquarium, but it also may present a higher than minimal risk to the Tidelands funds as there may be costs beyond the Challenge Grant. The risk areas include construction costs and contingency, financing costs, operating income, and potential long-term renovation and rehabilitation costs. City staff is not able to determine the specific level of the risk. The risk assessment takes into account the backing of the Aquarium bonds by the Tidelands Fund and the important nature of the Aquarium as a City asset. In 2005, the Aquarium governing board requested and the Council approved a 29 year cap on annual Aquarium rent payments to the city, effectively requiring public money, including Tideland sums, to pay part of the Aquarium's annual debt service. [LBREPORT.com coverage here. Also in 2005, LBREPORT.com learned and reported that sometime in 2001, the Aquarium governing board quietly removed the name "Long Beach" from the Aquarium's official name, At its 1998 opening, the attraction was called the "Long Beach Aquarium of the Pacific." Now it's simply "The Aquarium of the Pacific" with Long Beach relegated to locational terms (example: at the end of 710 freeway in Long Beach.) Asked about the name change at the time of our report, Aquarium's manager of media relations, Marilyn Padilla, emailed us at the time: "The decision [to remove Long Beach's name] was based on market research that stressed the new name would be more effective in attracting regional audiences to Long Beach." Ms. Padilla added, "In addition, the Aquarium of the Pacific focuses on the entire Pacific Ocean, not just local waters; therefore, the name would better explain the institution. Since it would not be part of the name, it was decided that 'Long Beach,' the Aquarium's location, would appear in all materials as well."
City Hall has allowed a private non-profit entity to operate the publicly-owned Aquarium. From its inception, that non-profit has declined to allow the public (and the press) to attend its governing board meetings. In contrast, a number of prominent LB non-profits receiving major city funds, such as CVB and DLBA, do allow public and press access. LBREPORT.com has editorially objected to Council approval of any additional public money for the Aquarium until its governing board agrees to allow public and press access to its meetings. Although non-profit entities don't generally have to open their governing board meetings to the public, when the Aquarium seeks millions in public money, the City Council could require this transparency measure as a condition of the Aquarium receiving those funds (as well as providing access to its minutes (on non-attorney-client matters) and public notice of board meeting places and times and planned agenda topics (basic Brown Act items.) On January 21, 2014, LBREPORT.com publicly testified at the City Council, urging Councilmembers to require public access to Aquarium board meetings. Our testimony sparked some Council discussion, in response to which now-exited Assistant City Manager Suzanne Frick said she would ask for the Board's position on the matter.. In May 2014, Ms. Frick indicated to LBREPORT.com that the Aquarium Board had expressed its view to her that it doesn't want the public or press present at its meetings. [Ed. comment: LBREPORT.com's position remains that in letting a private non-profit operate a public asset and consume millions in public money, the City Council should require the Aquarium to allow public and press access to its governing board meetings.] The Aquarium's current board president is John Molina. A list of all of its board members is at this link. On December 13, 2016, the City Council held a session closed to the public and the press, agendized as follows: Mayor and Council adjourn to Closed Session: Developing. LBREPORT.com added text on Dec. 20 at 7:35 a.m. indicating that Aquarium's non-profit governing board deleted "Long Beach" from the Aquarium's official name at some point in 2001, which we learned and reported in 2005. We also made some minor changes to smooth and clarify other article text blog comments powered by Disqus Recommend LBREPORT.com to your Facebook friends:
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