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LBReport.com News in Depth/Perspective W.C. Fields Financing ("Never Give A Sucker an Even Break"): City Hall Asks NLB To OK Diverting Blight-Reducing Redevelopment Money To Build North Div. Police Stn. (January 21, 2003) -- On January 16, a delegation of top City Hall officials -- including Acting City Manager Gerald Miller, Community Development Director Melanie Fallon, Redevelopment Bureau Mgr. Barbara Kaiser, in the presence of Councilmembers Rob Webb (8th dist.) and Val Lerch (9th dist.) -- journeyed to a hastily convened meeting of the North Long Beach Redevelopment Project Area Committee (North PAC). City Hall didn't come to give but to receive: it wants the PAC's blessing for an ugly act. Citing a budget deficit (perpetuated by Council spending that exceeds city revenue), City Hall wants to take NLB Redevelopment money -- not public works money or bonds -- to build the North Division police facility in Scherer Park. City Hall hopes the PAC (which is only advisory) will provide political cover ("see, NLB wants this") to lend some legitimacy to what is clearly a major betrayal. Raiding NLB's Redevelopment money will deprive NLB of millions for projects meant to remove blight. Reducing blight was the legal basis for imposing the anti-democratic Redevelopment machinery on NLB in the first place. City Hall's desired Redevelopment diversion -- which to our knowledge drew no opposition from either Councilmembers Webb or Lerch at the meeting -- contradicts representations by city management on February 22, 2000. A publicly delivered city management memorandum, billed as a status report on the project, was agendized to coincide with what turned into a raucous 9th district Council meeting on February 22, 2000 at NLB's Jordan High. City management's memo (during former City Manager Henry Taboada's tenure and before the arrival of Ms. Fallon) was a barely concealed hit piece targeting park protection advocates. It assured NLB residents -- and the Council -- that city funds (roughly $5.5-$6.0 million) had been appropriated and Capital Improvement Project plans were in place to cover construction of the police facility...so long as it was built in Scherer Park. However, management said if the facility were built at some alternative site -- which is what park supporters advocated -- then NLB Redevelopment money might be threatened. Approximately $5.5 million was appropriated by the City Council during the FY 1999-2000 budget process for construction of a permanent facility in North Long Beach. This expense was included in the Capital Improvement Projects budget and debt service payments are proposed to be made from future City revenue growth. It should be noted that the original budget of $5.5 million did not assume any cost for land acquisition. The actual cost to construct a new facility may range from $5.5 to $6.0 million. The final cost of construction is largely dependent on the market conditions within the construction industry at the time the City solicits construction bids and the actual bids received. Should a site be selected which necessitates extensive land acquisition of tenant relocation, additional financial resources will have to be identified. One source of additional funding could be the use of a portion of the tax increment revenue generated by the North Long Beach Redevelopment Project Area, assuming the site is within or adjacent to the boundaries of that Redevelopment Project Area. City Hall's threat -- that saving Scherer Park land might somehow cost NLB its Redevelopment money -- undermined park protection advocates...and timing the "report" to coincide with the annual NLB Council meeting amplified the effect. Sure enough, when park protection advocates spoke, they were booed and jeered. By the end of the night, City Hall had managed to turn long-time activists against each other...and for good measure staged a bogus vote (8-1, Grabinski dissenting) "to conceptually approve Scherer Park as the primary site for the development of the North Police Station." Few noticed that the Council vote was not needed to proceed with the project, further evidence of the spin-zone nature of City Hall's "status report." A year later, in February 2001 city staff delivered another update on the North police facility. It again represented that City Hall could build the police facility in Scherer Park although its cost had now ballooned to $7.2 million. City staff explained the approximate 20%-30% increase over what it claimed a year earlier because of "additional site preparation and...significant changes in the Uniform Building Code for this type of facility." City Hall said the most likely financing alternative involved issuing tax-exempt bonds: Staff is exploring a variety of financing alternatives for construction of the North Police Station. Since it is unlikely that this project will be financed with cash, the most likely alternative involves the issuance of tax-exempt bonds...In October 2000, the City Council authorized a Resolution of Intent to reimburse the General Fund for pre-financing expenditures, which to date total approximately $61,500...The actual total project costs, excluding land acquisition and financing costs, are estimated at $7.2 million...Staff intends to seek City Council approval for the issuance of bonds within the next three months if the issuance of bonds is deemed the best option for financing this project. [LBReport.com note: The bonds were never floated and taxpayers were not reimbursed for the $61,500 pre-financing costs.]

We all know what happened in 2002. LB's establishment assured voters that LB was on the "right track" and City Hall incumbents deserved reelection. When the elections were over, the mounting deficit (about which city management warned and LBReport.com reported with no visible Council response) had suddenly become a "budget crisis."

The lesson from all this: the stakes on issues from the airport, to parks, to police, to the city's financial stability are too high to entrust to a City Hall that governs based on W.C. Fields' principle: "Never give a sucker an even break."

What LB City Hall is offering NLB now is precisely what it said would only happen if the police facility were not built at Scherer Park. No, Councilmembers Webb nor Lerch were not in office when the latest fast shuffle began, but they are rapidly being pulled into a City Hall sink hole on this. No, Acting City Manager Miller and Community Development Dir. Fallon weren't in their current positions either. That's irrelevant. A well run city's word should be its bond.

It may not have dawned on Councilman Webb yet, but he's already on the road to recall over his record on the Airport which has left his district worse than when he took office. The newly drawn 8th district now includes much of NLB, including neighborhoods from Del Amo to Market St. If City Hall raids NLB's Redevelopment money, his northern 8th district residents can sign recall petitions just as easily as people in Cal. Hts., Bixby Knolls and Los Cerritos.

Councilman Lerch, who took office barely six months ago, has stunned some at City Hall by putting a premium on principle (what a concept). When some suggested combining Redevelopment areas (a clever way to loot NLB's Redevelopment money), Lerch wasn't fooled by fiscal diversions; he argued that the issue was City Hall keeping its word.

Councilman Lerch was right...and probably hasn't forgotten that he was actually in the audience at the February 2000 NLB Council meeting when City Hall assured taxpayers it had the money for the project. Speaking from the floor before becoming a Councilman, Mr. Lerch urged City Hall to get busy and move ahead on the project.

Three years later, we doubt he'll take kindly to a W.C. Fields fast shuffle that tries to hold the project hostage to draining millions of Redevelopment dollars from his district. For the record, the Scherer Park police facility isn't even in his district.

Then there's a pesky question of whether LB City Hall can legally get away with raiding North LB's Redevelopment funds to build the Scherer Park police station.

Statutory authority for Redevelopment is based on elimination of blight. Section 33445(a) of the CA Health & Safety Code provides in pertinent part (with boldface highlighting added by us):

(a)...[A]n agency may, with the consent of the legislative body, pay all or a part of the value of the land for and the cost of the installation and construction of any building, facility, structure, or other improvement which is publicly owned either within or without the project area, if the legislative body determines all of the following:

(1) That the buildings, facilities, structures, or other improvements are of benefit to the project area or the immediate neighborhood in which the project is located, regardless of whether the improvement is within another project area, or in the case of a project area in which substantially all of the land is publicly owned that the improvement is of benefit to an adjacent project area of the agency.

(2) That no other reasonable means of financing the buildings, facilities, structures, or other improvements, are available to the community.

(3) That the payment of funds for the acquisition of land or the cost of buildings, facilities, structures, or other improvements will assist in the elimination of one or more blighting conditions inside the project area or provide housing for low- or moderate-income persons, and is consistent with the implementation plan adopted pursuant to Section 33490.

(b) The determinations by the agency and the local legislative body pursuant to subdivision (a) shall be final and conclusive. [emphasis added]

You be the judge: Would you be persuaded that constructing a larger police building in an adjoining Council district "will assist in the elimination of one or more blighting conditions inside the project area?"

NLB's PAC may lack many substantive powers, but it does have the ability to hire legal counsel to advise it on this and other related matters.

The NLB PAC will vote on city management's proposed use of North LB Redevelopment funds on January 23. Although it will be only advisory, a "yes" vote could give City Hall political cover ("See, NLB wants us to do this.") A "no" vote would prevent City Hall from claiming NLB favors the action.

A third alternative -- a parliamentary move by members to "table" the matter -- would avoid a direct confrontation with City Hall without acquiescing in the action.

LBReport.com will report what happens.