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    "Free" LB Day At The Aquarium

    (Nov. 25, 2006) -- The Aquarium of the Pacific is holding what it calls a "free day" for Long Beach residents -- up to four tickets per household -- on Sunday, Nov. 26.

    Although we couldn't find it on the Aquarium's website, an Aquarium flier says it'll be open free on Nov. 26 to residents living in zip codes 90802, 90803, 90804, 90805, 90806, 90807, 90808, 90810, 90813, 90814, and 90815 who present a valid ID or utility bill. The Aquarium's Sunday hours are 9:00 a.m. to 6:00 p.m. (remember: limit four tickets per household)

    But with all due respect, it's not really a "free day" for LB residents. In our view, the Aquarium, despite being a wondrous and wonderful facility, remains a continuing thumb in the eye and thumb at the nose to LB taxpayers that needs to be set right.

    In a 1995 tour de force presentation, then-City Manager Jim Hankla basically told the City Council that he believed the Aquarium ought to be able to repay bonds (proceeds to pay a construction firm to build the Aquarium) without tapping backup public [government] sources based on forecast Aquarium attendance and revenue. (At the time, downtown interests and others wanted something built in the area after a Disney sea project didn't pan out.)

    City Manager Hankla didn't offer guarantees about the Aquarium. He explicitly cited the risks involved. He told the Council and the public that public money could be tapped. The then-Council bought it...and subsequent Councils did the rest.

    We've posted below archival audio of salient parts of city management's 1995 presentation and the Council's response. We urge LB taxpayers to hear for themselves what was said and done then...compared to the sorts of things being said and done now. The audio speaks for itself...but here's our summary, admittedly including our opinions.

    The Council and the public were first given a dazzling presentation of the Aquarium's future displays. That was foreplay to escort the Council to the bedroom for the main event: using public money to repay bondholders if the Aquarium didn't do what the "forecasts" predicted.

    Our audio picks up with a prestigious accounting/consulting firm (hired by the construction company that would build the Aquarium) that presented a "financial feasibility report" that forecast attendance and revenue figures (subject to caveats mainly unnoticed in the heat of the moment). An independent consultant separately retained by city management then basically indicated (again subject to caveats) that he'd reviewed the forecast and found its procedures reasonable.

    Prestigious bond counsel told the Council that the bonds would carry a lesser repayment interest rate if they were backed by public LB government sources. That should have rung major alarm bells...since it amounted to an admission that knowledgeable investors treated their money with greater caution than LB City Hall was asked to treat public money.

    The Council was also told that the proposed Aquarium -- to occupy city property with public money at risk -- would be run by a private non-profit entity governed by a private board. That should also have rung alarm bells...since we believe handing operation of a public asset to a private entity is dubious at best, even more so without meaningful Council oversight and public openness. (A separate LB example: the Queen Mary).

    Warnings from some outside City Hall were brushed aside. Second District Councilman (now State Senator) Alan Lowenthal (in whose district the Aquarium was proposed) fretted about the seeming lack of accountability and reliance on projections...but he ultimately joined in 9-0 Council approval.

    Big surprise, the Aquarium soon failed to meet its attendance and revenue projections. Public money was tapped. The Aquarium's "underperformance" was then blamed in delays in finishing "The Pike" (another O'Neill administration "success").

    In April 2001, City Hall refinanced the Aquarium bonds (for a second time), conveniently structuring the deal in a way that deferred larger bond payments until after the 2002 election cycle (in which O'Neill's boosters claimed the city was "on the right track.")

    Big surprise, even with "The Pike," the Aquarium still didn't do what had been projected. Rather than downsize to achieve sustainability, Aquarium management proposed an audacious expansion plan. Incredibly, on a 9-0 Council vote in 2005, the City Council approved the Aquarium expansion plan (which was backed by city management under Jerry Miller) to extend the Aquarium's lease, cap its rent...and let the Aquarium expand by using privately raised money [instead of insisting that the money be used to ease taxpayer cost that the Aquarium wasn't supposed to create].

    Unmentioned publicly at the time -- but subsequently learned and reported by -- the Aquarium board had voted sometime prior to the April 2001 bond financing to remove Long Beach's name from what was originally proudly called the "Long Beach Aquarium of the Pacific." Today, it is the truncated "Aquarium of the Pacific" with Long Beach relegated to a geographic mention as an appendage.

    To our knowledge, is the only LB media outlet to have reported this action. As we noted at the time (Oct. 2005), "Elsewhere, major firms reportedly pay significant sums to ensure their names are part of attractions (Edison Field, the Staples Center)."

    Invited by us to reply, the Aquarium's manager of media relations, Marilyn Padilla, emailed: "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."

    Sorry, but as best we can tell, the LB Aquarium would likely not be financially afloat today were it not for multi-million dollar annual bond bailouts, generous leases and deference from LB's City Council.

    In our view, what happened resulted from the O'Neill administration and its enablers letting a private entity run the public-asset Aquarium (a valuable city asset, like Queen Mary) without serious Council oversight or meaningful public openness. (The Aquarium board's meetings remain closed to the public.)

    We believe City Hall's conduct invited what followed...and we want City Hall now to start treating public assets and public money more seriously than it has in the past.

    In our view, some serious minds need to tackle the task of finding an appropriate corporate sponsor to defray continuing LB taxpayer costs in connection with the Aquarium. We favor finding a corporate entity willing to pay an annual seven figure sum for the privilege of having its name on the LB Aquarium, no strings attached (no expectation of future approval by any city entity of something else the sponsor may want).

    Some have whispered to us that corporate sponsorship might deter the Aquarium's pursuit of government grants and the like. Good. Those "grants" are taxpayers' money. The Aquarium has consumed too many taxpayer resources as bailouts. Before seeking more taxpayer grants, things need to be set right with taxpayers first.

    To hear what the City Council was told and did on August 1, 1995, click our archived audio reports below.

    The first Aquarium-related agenda item was a "receive and file" item that included a dazzling presentations by Kajima, a financial feasibility report then being finalized by Coopers & Lybrand (retained by Kajima), an independent consultant retained by city management to review Coopers & Lybrand's report, a VP from Goldman Sachs [bond counsel], an Aquarium boardmember and then-City Manager Hankla. Our coverage of this item begins with presentation of the financial feasibility report.

    The second item was a Council action item approving use of public money to back the Aquarium bonds. It included presentations by then-Deputy (now Ass't) City Attorney Heather Mahood and then-City Manager Hankla.

    To provide a listenable presentation, we posted salient portions of these items, omitting less pertinent sections (edits/omissions are indicated with a "whoosh" sound, our version of an audio ellipsis).

    The audio quality on this posting isn't our usual CD quality material; it's a quick acoustical duplicate...but it's clear enough to discern what happened.

    Agenda item 23, Aug. 1/95 (excerpts) (38:40)

    Agenda item 24, Aug. 1/95 (24:47).

    [These audio segments are in the "real audio" format which should stream into your computer. Many people already have the program their computer. If necessary, the player can be downloaded free at: RealOne player download]

    We like the Aquarium...but as with several actions under the prior Mayor (who advised ignoring dissenting taxpayers she called "CAVE people" [citizens against virtually everything]), we urge LB's new Mayor and Council to confront the consequences of prior actions and do what it takes to set things right for taxpayers now.

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