New ordinance, new salaries – same old problems – how do we get Chico PD to do their job?

3 Aug
When I went to the Airport Commission meeting last week I noticed somebody had taken up residence outside the front door of City Hall.

When I went to the Airport Commission meeting last week I noticed somebody had taken up residence outside the front door of City Hall.

Anybody who frequents Downtown, Midtown, and Lower Bidwell Park has noticed more homeless, or “street” people than ever. They have firm encampments at City Hall, City Plaza, the Vallombrosa post office annex, and throughout Bidwell Park. They mill up and down Mangrove and Vallombrosa Avenues around the Safeway shopping center.   As you get away from the city center and the park,  you see them alone or in pairs, moving along the main corridors of town, congregating wherever they can get cash for recyclables, or be out of the sight of passing cops, like the parking lot behind Raley’s on East Avenue.

The problem being, most of us have a hard time separating the truly needy from the hardpan criminals. Having observed the little mob that congregates at the recycling facility behind East Avenue Raleys, I was shocked to hear a report that a couple of them had got in a fight in broad daylight and one man had produced some sort of blade and stabbed the other.  That got my attention – I’ve parked my car on that side of the store since I had toddlers in hand.  

We see them regularly in our old midtown neighborhood now, they seem to be following the freeway across town. Our immediate neighbors, including a large church, noticed a brief upswing in crime, with some cars broken into and reports of bicycles stolen from garages. A car was broken into across the street from our house, again in broad daylight.  One afternoon not long after that, my husband and I encountered a woman out in front of our house who had just caught a couple of men in her garage with their hands on her son’s bike. She had chased them out and then got into her car to see which direction they’d headed. She said they had one bike of their own, and both jumped on it fleeing her garage. She was unable to follow them.  

This is a pattern I recognize all over town, don’t you?  Watch the local news – people have caught daytime break-ins on their security cameras. Full faces are shown. No arrests have been made that I’ve heard of, not since they got  the kid who was breaking into schools months ago. I haven’t heard of anybody getting their stolen property back either. 

The authorities have always acted as though a car break-in is the victim’s fault, especially in the park. Sometimes valuables have been left in plain sight, sometimes cars are smashed and rifled and nothing noticeable is taken. It’s as though you are stupid to leave your car unattended anywhere, including your own driveway. 

I’ve been shopping for mosquito netting – the other day I saw a screen that is specially made for your big garage door, with zipper openings big enough to get your car in and out. Great idea – airing your garage will cool down your house. But who would leave their garage open and untended around here?

 Did you know, local policeman Peter Durfee is the president not only of the Chico Police Officers’ Association (which is also a political PAC) but also the Chico Realtors Association? Durfee is a realtor? Wow, where does he find the time?  

Durfee is the officer who occasionally gets sick of the criticism of Chico PD and goes on a tear Downtown harassing street people. Not that I mind – he’s supposed to harass people for breaking the law. Anytime he’s felt like it, he’s managed to find about a violation every six feet – the sit and lie ordinance the cops screamed for is very specific. I see violations every time I go out. 

The picture above I took last week at City Hall at about 6:30 pm Wednesday.  There’s almost always a bed  laying in this spot. It still lay there when we exited the Airport Commission meeting, so my husband  snapped a picture of it. As we were leaving the little portico, a bedraggled man came round to see what we were doing. He smiled his drunken smile and greeted us with a tinge of fear – were we going to give him a bad time?   No, that’s not our job. At least one cop and more than a half dozen staffers, including city manager Mark Orme, had passed that bedding on their way into the chamber. He had been smoking in the non-smoking area when we arrived, and was still smoking when we came out. 

I get such a kick out of City Council, I’d really like to return the favor sometime, right in the seat of Mark Sorensen’s pants. They wasted hours of $taff time and passed that stupid sit and lie ordinance despite the fact they’d passed a similar ordinance years before that wasn’t being enforced. Now we see the same with sit and lie. Council also gave the cops very generous raises in exchange for paying three percent more of their pension – 12 percent. Out of salaries in excess of $100,000, they pay 12 percent of  pensions comprising 90 percent of  their highest year’s salary, available at age 50.

I predict Durfee will retire at 50, and then I predict he will make a run for city council. I predict he will be our mayor someday.

Just about the time our town is poised to go straight  down the shitter. Good luck Pete! 

 

 

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CARD continues to run aquatic center committee behind closed doors

1 Aug

I attended a 3pm Chico Recreation District meeting at California Park Pavilion Thursday to find out that a committee selected at a  closed meeting had interviewed consultants to do a “feasibility study” on behalf of the proposed aquatic center. Their findings – nobody would do it for the $30,000 offered, so they had to up the ante to $50,000.

What this “feasibility study” will include is a guess because they won’t include me in the meetings where they actually discuss it. When I asked staffer Rob Hinderer why I wasn’t noticed for the interviews he replied,

Juanita, good morning!

 There was no AFAC Meeting. There were interviews with the RFP respondents. An interview panel was formed. They were the only persons present at the interviews other than myself and CARD GM, Ann Willmann.

 When the RFP decision is made, I will send out invites to all AFAC members, yourself included, to share the outcome of the RFP.

 Thank you,

 Rob

The last AFAC meeting I was noticed about started late because many of the members didn’t show up. When the meeting started, there was confusion – several of the members wanted to talk about the deplorable condition of Sharpiro and Pleasant Valley pools, and when they would be repaired. They were told those options would be included in the “feasibility study”, but of course, we haven’t seen the study.  The conversation was all over the place, I had to leave about 40 minutes into the meeting. They were supposed to discuss the Request for Proposals that had been sent out to consultants, but Rob Hinderer was still trying to pull the meeting together when I left. 

This 3pm Wednesday  meeting was called to discuss the annual budget. The AFAC matter was part of it because they had to agree on how much to budget for this “feasibility study.” The three consultants who showed up to be interviewed said they couldn’t do a good study for less than $50,000. An ad-hoc committee had talked about $75,000, but agreed on $60,000,  because they wanted to be sure they would have plenty of money to cover it, without having to ask for budget allocations. I don’t think that was the right tack – now they will not have to discuss cost overruns before the public, they just have the money there in a pot to spend it. Oh well. 

That’s why they had this meeting at 3pm on a Thursday at the Cal Park clubhouse, Lakeside Pavillion, instead of at a regularly scheduled meeting at the CARD center. Board president Jan Sneed has taken CARD behind closed doors because she knows they’re playing fast and loose with taxpayer money. 

Sneed tried to act the fiscal conservative. When a board member moved to approve the $75,000 expenditure, she held out for $60,000, just to show us what a penny pincher she is.

Well, she’s skeletized CARD with layoffs because they can’t afford to pay benefits for their workers. New CARD director Ann Willman, an ex-CARD employee who left a couple of years ago to take the helm at Feather River Rec in O’ville, is back in Chico at just over $100,000, according to the Enterprise Record. Her replacement in Oroville gets $70,000, and refused the benefits package because she said her husband already has one on his job. I think they were offering her a $5,000 benefits package. Willman’s predecessor Steve Visconti and most CARD management get packages that cost around  $25 – 30,000/year. 

I don’t know what Willman really makes because new state controller Betty Yee has taken down John Chiang’s  salary database. Now we have to believe what these public employees tell us, and well, you know they will lie to us.  They’re ashamed.

And I’m back on the same merry-go-round with Willmann that I rode with her predecessor Visconti. Here’s the last e-mail I received from outgoing Visconti:

From: svisconti@chicorec.com
To: juanita sumner
Subject: RE: intergovernmental committee
Date: Mon, 22 Jun 2015 16:17:41 +0000

Ms. Sumner, you are correct. The Intergovernmental meetings are generally on an as needed basis. The most recent meeting was with the City Manager to discuss a few issues related to the City budget and certain fees they collect that CARD has utilized in the past to construct new park improvements. I will notify our new General Manager Ann Willmann that you would like to be noticed on future Intergovernmental Meetings. She will be starting on July 6th.

 As far as meeting reports, I will notify Ms. Marciales as soon as she returns to the office the week of July 6th.

 Thank you for your inquiry.

 Steve Visconti

Interim General Manager

July 6 came and went, I got no response from either Willman or Marciales. Jennifer Marciales seems to think she’s paid to do her fingernails.  So, when I went to the meeting Thursday, I was surprised when a human potato walked up to greet me in my chair – “Are you Juanita?” It was Willmann, who had put on a bigger rearend since I had seen her last. I know the Oroville job was rough – Feather River Rec has been in financial arrears for some time, and then there was the incident involving a teenage boy, a camera, and a girl’s toilet. That didn’t play well for Willman, I’m guessing she ran back to Chico crying for Mama.

I repeated my request to Willmann and she gave me her business card, telling me to e-mail her. By law, she’s supposed to have these reports on hand for anybody who requests them, but I played along because the room was full of unfriendly people by that time. I e-mailed her promptly the next morning. 

From: juanita sumner
Sent: Friday, July 31, 2015 5:26 AM
To: Ann Willmann <annw@chicorec.com>
Cc: Jennifer Marciales <jmarciales@chicorec.com>
Subject: RE: intergovernmental committee

 Hi Ms. Willmann,

 I’m glad you gave me your e-mail – as you know, most card e-mail address are first initial, last name. I see where that would be confusing to people trying to get ahold of you.

 As I asked Mr. Visconti below, I’d like to get the report of the last Intergovernmental meeting, which Mr. Visconti had told me Ms. Marciales would contact me about.

 I’d also like to get on the notice list for the Intergovernmental meetings, as I had asked.

 Thanks for your anticipated cooperation, Juanita Sumner

And here’s what I got back – sounds like the same bullshit runaround to me.

From: annw@chicorec.com
To: juanita sumner
CC: jmarciales@chicorec.com; 
Subject: RE: intergovernmental committee
Date: Fri, 31 Jul 2015 16:50:13 +0000

Dear Juanita, thank you for your email. I will follow up on your requests and also ensure you are on the requested notification lists. Have a lovely weekend. Ann

In my past experience, this is a brush off, and I won’t hear from this woman again unless I put a hornet up her ass. We’ll see. 

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Airport consultant just looking for a meal ticket

30 Jul

I went to the Airport Commission meeting the other night to hear a couple of reports and frankly, my head is swimming so full of bullshit I have a hard time putting it into words. 

Excuse me – Frank Fields’ budget report was no bullshit, just straight facts. Frank was detailing the actions that led to essential bankruptcy out at the airport – the airport fund has been completely in the red the last few years, despite a million dollar infusion from the feds every year. Frank explained that the airport fund has been pilfered by way of an initiative passed by council – “cost allocation.”

“cost allocation” is the system by which you steal money from one fund to pay salaries from another department. I sat through that meeting – Chris Constantin explained that every time they have a meeting, they pay staff out of the fund they’re talking about at the meeting, get it? So if they discuss the sewer at an Internal Affairs meeting, the staffers present at that meeting get paid out of the sewer fund. And the electricity for the room, the coffee, Dani Brinkley’s foot wear, the whole nine yards, comes out of the sewer fund. That, by the way, is also how the sewer fund, and the development fund,  ended up in the red to the tune of a million dollars or so a piece.

Then Fields explained another measure passed by council – when a fund is in the red, staff now takes money out of the General Fund to cover it.  And the books are good! 

I think we missed all this. I’m guessing they were threatened with some sort of punishment if they didn’t come up with a better set of books, so here we are. They had too much red ink in their books, and you know what that looks like.  On Perry Mason it’s called embezzlement.

Despite the fact that the city gets about a million dollars a year in federal grants to keep it open for the fire fighting planes, the airport fund is still in the red every year because of the cost allocation bullshit. They haven’t been putting any money into the airport. If you listened really carefully to Tom, the $190,000 consultant from AVPorts consulting firm, you find the real reason we don’t have commercial air service is we have no terminal, and our runway is inadequate. He really slid those by, talking instead about how we need to give him a contract to attract the airlines. He didn’t want to give us too much bad news at once.  He wants us to hire him to do a job he admittedly can’t do. 

We don’t have commercial air service because we haven’t been keeping our airport up to modern standards. We’ll need a new tower, a longer runway, and a brand new fancy terminal. We’ll also need to guarantee them a certain amount of profit – or pay them an “incentive” charge of hundreds of thousands a year. 

But Tom went on and on, getting really excited toward the end of his presentation. While he admitted our chances of getting commercial service were really poor, he kept saying we have to try. 

The major obstacle being – Redding has already done all the stuff above. He expects us to steal customers from Redding, that’s the only way his scheme will work. 

I’ve got pages of notes on this guy – I’ll boil it down for you. Watch “Music Man.” 

And I’ll tell you what else – the feds are going to walk away with their million a year if we don’t make major infrastructural improvements out there. We won’t even have the fire fighting planes if $taff doesn’t quit embezzling that fund to pay their pensions off. 

Orme isn’t telling us everything. He’s sitting on a pile of trouble, I hope it goes right up his ass.

Here’s what I think – why pander after the airlines? Why not wait until they are knocking on our door? 

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Thanks to councilman Randall Stone for taking city clerk Debbie Presson to task over her refusal to post the campaign reports

29 Jul

A year or so ago I got into an ugly bitch fight with Chico City Clerk Debbie Presson over the posting of the campaign contribution reports on the website. For starters she was letting the cops go months beyond the report deadline with their PAC filing, letting them get off without paying the per-day fine. I quit when I felt she was trying to set me up for some sort of harassment suit. I also got e-mails from Stephanie Taber and Sean Morgan telling me I needed to “back off” of Presson. I started to feel like I might have the makings of a suit myself, but I’m not that kind of person.

Now it looks like Presson has taken everything off the website and requires people to physically present themselves in her office at her convenience to view the physical records. That’s view – if you want copies you will pay per page. 

Council member Randall Stone has taken up this issue with a Facebook posting here:

https://www.facebook.com/ElectStone/posts/732600713534996?comment_id=733024570159277&offset=0&total_comments=22&notif_t=feed_comment

I’m going to go on a little rant here. 

Debbie Presson is not fit for public office. She uses her position, in which she is supposed to protect the voters, to protect herself and her coworkers. Instead of working in the voter’s best interests, she furthers the best interests of herself and her friends. She uses her position to cover corruption, and that’s corrupt. 

Furthermore, I’ll say, the city charter needs to be changed so that the city clerk is elected like the county clerk is elected. Things might be different if her $135,000 salary, plus health benefits and pension, were on the line every four years.  I notice county clerk Candace Grubbs’ office is a lot more responsive. Grubbs also has plenty of help – Presson cut her staff and took a larger salary, but has the nerve to tell us she’s shorthanded! 

I see Stone has got a discussion going on this issue – at last, some sunshine in the sewer that is Downtown  Chico.

 

 

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Attorney General Kamala Harris is investigating former CPUC president Michael Peevey – so far CPUC has spent $5 million (of our money!) on attorneys

28 Jul

According to the Sacramento Bee, “Attorney General Kamala Harris’ office is investigating former President Michael Peevey, and perhaps other current and former commission employees, and the CPUC is paying an outside law firm, Sheppard Mullin, to represent it.”

The Bee also says “The commission entered into the contract [with Sheppard Mullin] in November 2014, claiming it was for $49,000 [as stated in the above linked story]; the contract since has ballooned to $5 million-plus.”

Former CPUC president Michael Peevey, who stepped down amid a scandal involving his inappropriate relationship with PG&E, will pay his own attorneys – I’m sure he has plenty of dough! “…internal PG&E emails show Peevey sought a $1 million PG&E donation to combat a ballot measure in 2010, while the commission considered issues related to PG&E, including the 2010 gas line explosion that killed 38 people in San Bruno.

Southern California Edison disclosed that Peevey asked Edison and San Diego Gas & Electric to donate $25 million to fund a center at UCLA, as the commission was deciding how to apportion the $4.8 billion in costs of shutting the San Onofre nuclear power plant.”

These people are so shameless.

The Bee asks, “But why does a public agency with nothing to hide need a team of criminal defense lawyers to represent it against another public agency that is seeking to determine whether there has been wrongdoing? What sort of precedent does this set?”

This precedent will become the way it is as long as the public fails to act.

If you don’t attend another meeting all year, here are a couple that would be worth your time

26 Jul

Two meetings I will attend this week are the Airport Commission meeting on Tuesday (July 28) at city chambers, 6pm, and a CARD budget meeting Thursday (July 30) at 3pm at Lakeside Pavilion out at Cal Park.

The Airport Commission will be discussing the airport budget, with a report from consultants AFCO AvPORTS (sic). AFCO is working under a $190,000 contract. They will report on their efforts to get commercial air service back to Chico Airport.

I’m curious to see what they could possibly add to the conversation that Chico Chamber director Katy Simmons has not already told us. Here’s my guess  – they want about $300,000 allocated from the city’s general fund to pay a new airport manager. Then they want hundreds of thousands of dollars in taxpayer money, spent over the next five or so years, with no guarantee that commercial air service will be restored.

First there’s the matter of a $60,000 study as to “who flies out of the airport and where they go“. This seems to have been answered in a recent survey done by the Chamber, in which only about 60 individuals indicated they used the airport on anything resembling a regular basis. Why the city continues to pursue this avenue is anybody’s guess.

CARD will discuss their budget, looking for public comment, and I hope they get it. But, I’m not expecting many attendees at a 3 pm weekday meeting in Cal Park. CARD staff and the board seem to be bending over backwards to keep the public out of their meetings.

One budget issue that screams for public comment is the study they want to fund for the aquatic center – the price has jumped from about $30,000 to about $75,000. Yeah, for a study.

I would hope to see some other members of the public at these meetings.

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Recent state court ruling “a disappointment” to water districts hoping to use drought as an excuse to raise rates

24 Jul

I read a piece in today’s Sacramento Bee, written by Dave Kasler – “Court won’t budge over water”. 

Kasler writes, “the state Supreme Court has kept intact a ruling that makes it harder for municipalities to impose tiered pricing to discourage heavy water use.” Governor Jerry Brown was quoted as saying the ruling represents a “potential strait jacket” for regulators. 

The court cites Proposition 218, a ballot measure passed in 1996 that forbids municipalities from charging fees that represent more than the actual cost of providing the water. In other words, these water utilities can’t use the drought to make an extra profit, like they’ve been trying to do.

While the decision came out of a case involving the city of San Juan Capistrano, it looks like it will also affect all water districts in the state.  “What was particularly alarming to state officials was that the court of appeal ‘published’ its decision, extending it’s impact to the whole state.”

San Juan Capistrano will have to make refunds to customers, but, this may not be the end of gratuitous rate increases. The ruling allows rate increases as long as “they tie their rates to cost to comply with Prop 218.” Ask yourself, exactly what is meant by costs?  The notice we got in 2013 included over $300,000 for pensions, and $165,000 for infrastructure. They consider their own pensions to be our cost.

Compliance seems to be up to the water district. For example, “Sacramento Suburban Water District said it thinks it’s tiered pricing complies with the court ruling.”    Uh-huh, sure it does Honey.

These agencies are “quasi public” and should have to show their books. We should know exactly how much they spend on themselves, and we should know what the investors are getting. We need our city officials to stick up for us like the city of Selma, near Fresno. 

“[City manager Ken]Grey explained, ‘It’s a grave disappointment to the city of Selma to see this kind of an increase, it draws into question the operational aspects of Cal Water providing services to the city of Selma and certainly the city council is going to have to give consideration to whether or not they continue this relationship with California Water Services.'”

In fact, one city council member is calling for the city to buy the utility right out of town. Read more at Marysville for Reasonable Water Rates:

https://www.facebook.com/pages/Marysville-For-Reasonable-Water-Rates/176321489194208?fref=nf

That’s really a discussion Chico needs to have, now. If you dig through a pile of crap Downtown, you might find the reports regarding the clean-up of wells around town – wells used to make a profit by Cal Water, cleaned at the expense of the city, the taxpayers, the ratepayers.  Now that the city has foot the bill to clean all the wells, just what “infrastructure” is Cal Water intending to fix?

Remember people, if you want Accountability, you have to provide it yourself. 

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At last, somebody is paying attention to CARD aquatic center discussion

23 Jul

At last somebody is paying attention to the CARD aquatic center discussion. Enterprise Record letter writer Sam Goepp raises the reality that CARD’s proposed aquatic center will never pay for itself – out going CARD board member Ed Seagle made that statement repeatedly in early discussions of this project, but the rest of the board didn’t listen.

Mr. Goepp hasn’t seen the proposals, because CARD hasn’t been public with this discussion. They are planning the amenities he’s listed below, with cost estimates up to about $20 million dollars. I think their estimates are low, this project will go millions in overrun. They’ve already more than  doubled the price on the feasibility study, from around $30,000 to $75,000. Tom Lando wants the city of Chico to take money out of the park fund to pay for it. 

Thanks to Sam Goepp for paying attention and taking the time to write a letter to the paper.

from Chico Enterprise Record:

CARD needs to admit to aquatic center realities

I cannot bite my tongue any longer after reading about CARD allocating more than $30,000 to pay for an aquatic consultant to tell them what they can learn through professionals for free. Simple facts about public pools: 90 percent of people want to be in water 3 feet or less while 10 percent of swimmers are competitive or lap swimmers.

So who do you build a pool for? The general public or a special-interest group that will be vocal about the economic benefits and their willingness to contribute? Then once the costs to operate exceed $750,000 annually, everyone will be in shock as to the expense to operate without any true revenue generated by the aquatic facility.

The comment that the city of Chico has $3.6 million in the park fund gives the impression they think city money belongs to CARD. Keep in mind that they will need triple that figure. No community can afford a true competitive 50-meter pool. Just ask the city of Long Beach. For the Olympic trials they built two temporary pools and once trials were over they sold them. Why? Too expensive to maintain.

Bottom line: If you are committed to build an aquatic facility, you need to realize 50-meter pools are expensive and cannot be used for the recreational swimmer as they are too large and deep to accommodate families. The general public will need splash pads, water slides, a lazy river, a zero-depth entry feature, children play structures and deck space for tables, chairs, umbrellas and concessions.

— Sam Goepp, Durham

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Staff pushing council to forgive $205,539 Nature Center loan – tonight, in a special meeting with 24 hours notice

22 Jul

I received the original agenda for tonight’s meeting on Monday, then  an amended agenda containing this report yesterday. This subject was originally brought up June 2, but somebody  raised a Brown Act issue. I bet! 

I went ahead and posted the whole report, sorry for the hasty cut and paste job.

The Nature Center runs a for profit day care center, and they haven’t been showing their books. When I asked for their finance reports at a meeting, Mark Sorensen told me, “that’s enough Juanita!”  

Why isn’t the center being offered to a group that can manage  it properly? Why is this group so in the red? $250,000 in expenses for running kid’s camps? Why won’t they provide all their financial information, salaries, etc? 

http://www.guidestar.org/organizations/68-0341188/chico-creek-nature-center.aspx

Here’s the link to the whole agenda:

http://chico-ca.granicus.com/GeneratedAgendaViewer.php?view_id=2&event_id=221

REPORT IN BRIEF: The City Council will consider several options related to a loan provided to the Chico Creek Nature Center that is currently in default. Options include forgiving the loan to deferring or calling the loan. At its May 20, 2014 meeting, Council authorized staff to prepare Amendment No. 4 to the agreement that would: (1) reset the accumulated interest and penalties owed for the period beginning July 15, 2009, through April 15, 2014, to zero ($0) so that only the current principal balance of $181,026.95 is owed; (2) adjust the interest rate from 1.80 percent per annum to 3.42 percent per annum from July 15, 2014 forward; and (3) establish interest only payments for one year beginning with the payment due July 15, 2014. Staff prepared Amendment No. 4, however, the CCNC did not agree with these terms and, as of the date of this staff report, has not signed the Amendment resulting in the loan falling into a default status.

RECOMMENDATION That the City Council authorize the City Manager to execute an amendment to the “Restated Loan Agreement for the Construction of New Exhibit and Classroom Facility, Chico Creek Nature Center, Inc.” to either: Option 1 – Loan Forgiveness – Forgive the Chico Creek Nature Center of its loan obligation. Option 2 – Loan Foraiveness with conditions – Forgive the Chico Creek Nature Center of its loan obligation with conditions as specified by the City Manager. Defer loan payments for a period not exceeding August 1, 2015 until successful negotiations on agreements conclude. If agreement is not reached, proceed with Option 4. Option 3 – Defer Loan Obligations – Defer all payment of interest until July 1, 2016. Option 4 – No Action – City Council takes no action and City Administration works with City Attorney’s Office to proceed with available remedies specified through the agreements with the Chico Creek Nature Center. FISCAL IMPACT: The “Restated Loan Agreement for the Construction of New Exhibit and Classroom Facility Chico Creek Nature Center, Inc.” establishes quarterly loan payments, in the amount of $3,397.43, due on the 15th of January, April, July, and October. The original loan amount was $185,000 and the total annual loan payment is $13,589.72. Loan payments not received within 15 days of the due date are to bear a penalty of additional interest at a rate of one-half percent (0.5%) per month which has been waived for the majority of the deferred payments. Because the loan was made from a development impact fund, the City Attorney’s Office advises that if the loan obligation were to be forgiven, the General Fund would be required to reimburse Fund 347 – Zone I Neighborhood Parks for the current principal balance plus accumulated interest, a total of approximately $205,539.71.If the two year deferral request is granted without penalty, and the interest rate is adjusted to 3.42 percent per annum, then the deferred payments will be added to the end of the amortization schedule and interest will continue to accrue. If the loan’s accumulated interest and penalties are reset to $0 and an adjusted interest rate of 3.42 percent per annum is applied to the current principal balance of $181,026.95, then the Nature Center’s payments would be approximately $1,547.78 per quarter ($6,191.12 peryear).The Nature Center would be required to request in writing by April 1 st of each year to continue interest only payments or to advise that it can begin payments of both principal plus interest. The City may periodically review and adjust the interest rate in accordance with the City’s actual rate of return on investment. An interest only payment would provide a small revenue stream to the City until such time as the Nature Center can resume full loan payments.

BACKGROUND: The Chico Creek Nature Center (CCNC) leases property, including two City owned buildings, in Bidwell Park along East Eighth Street between Cedar Grove Picnic Area and the Deer Pen. As consideration for such use, and in lieu of the payment of rent, the CCNC operates a nature museum and conducts educational classes and programs on nature and the environment for the benefit of the public. The lease was executed July 1, 1996, amended on July 21, 2005, and terminates December 31, 2027. One of the City owned buildings, the administration building, was destroyed by an arson fire in April 1998. By City Council motion on November 10,2005, the City Council approved a request from the CCNC for a loan in the amount of $185,000, bearing an interest rate of 5.24 percent per annum, to cover the balance of increased construction costs for the new exhibit and classroom facilities within the new building that were not covered by grant funds, insurance proceeds, or existing donations. It was the intention of the CCNC to conduct fundraising activities to generate funds to make the loan payments and, in the event fund raising activities failed to generate sufficient funds, the CCNC had agreed to use interest generated from its Paradise Community Foundation endowment as security for the loan to make the loan payments. Upon completion of construction, the first loan payment was made July 15, 2008. After making four quarterly payments, the CCNC requested a deferral of loan payments for three years due to unanticipated costs associated with the completion of the new facility which required the Nature Center to divert operating funds to capital expenses and to use the interest generated from its Paradise Community Foundation endowment for operating expenses, making the endowment funds that had been identified as security for the loan unavailable. The Finance Committee recommended deferral of the loan payments that were due July 15, 2009, through April 15, 2010, with associated penalties, and the deferral of the loan payments due July 15, 2010, through April 15, 2011, without penalty, but recommended that deferral of the third year of payments be considered following staff analysis of a business plan to be submitted by the CCNC. Subsequently Council authorized the City Manager to execute Amendment No. 1 to the agreement subject to these conditions. The Finance Committee recommended the third year of deferred loan payments (July 15, 2011, through April 15, 2012), without penalty, based on staff review of the CCNC’s business plan which showed they were making progress toward financial stability and could potentially be in a position to resume quarterly loan payments in fiscal year 2012-13. Council approved the recommendation at which time Councilmember Holcombe suggested staff review the loan’s interest rate relative to the City’s actual rate of return on investment and that Council consider a future discussion regarding forgiveness of the loan. Council authorized the City Manager to execute Amendment No. 2 to the agreement subject to these conditions. In 2012 the Finance Committee considered the CCNC’s request for an additional three years of deferred loan payments (July 15, 2012 through April 15, 2015). In addition, as requested by Councilmember Holcombe, staff reviewed the City’s actual rate of return on investment and recommended that the interest rate be adjusted from 5.24 percent per annum to 1.80 percent per annum to more accurately reflect the City’s actual rate of return on investment The Finance Committee recommended to Council that only a two year deferral be granted, through April 15, 2014, and that the interest rate be adjusted to 1.80 percent per annum retroactive to the payment due July 15, 2009. Council authorized the City Manager to execute Amendment No. 3 to the agreement subject to these conditions.By letter dated April 2, 2014, the CCNC requested an additional two year deferral of loan payments, from July 15, 2014 through April 15, 2016. When the Finance Committee considered this request Committee Member Stone was in favor of forgiving the loan, Committee Member Sorensen was not in favor of forgiving the loan, and Committee Member Gruendl was absent. The request was forwarded to the City Council without a Committee recommendation. At its May 20, 2014 meeting, Council authorized staff to prepare Amendment No. 4 to the agreement that would: (1) reset the accumulated interest and penalties owed for the period beginning July 15,2009, through April 15, 2014, to zero ($0) so that only the current principal balance of $181,026.95 was owed; (2) adjust the interest rate from 1.80 percent per annum to 3.42 percent per annum from July 15, 2014 forward; and (3) establish interest only payments for one year beginning with the payment due July 15, 2014. Staff prepared Amendment No. 4; however, the CCNC did not agree with these terms and, as of the date of this staff report, has not signed the Amendment. DISCUSSION: Since the City and the Chico Creek Nature Center (CCNC) have not been able to execute a 4’h amendment to modify the loan agreement as directed by Council, the CCNC is in default of the original loan agreement. Based on the loan’s history and the actions taken over the past years, there is high likelihood that the CCNC will not be able to ever repay the loan. The loan proceeds went into improving a building that is and will remain City property. At this point, the City must take a final action on whether to call the loan or forgive it. In March 2015, to minimize the impact on the City, the City Council approved the use of one-time, General Fund, carry over funds from 2013-14 to move the debt obligation from Fund 347 – Zone I Neighborhood Parks Fund to the General Fund. This still results in an accounts receivable; however, if the City forgives the loan, the City would not have to identify funds to cover the loan obligation in the neighborhood parks fund. City staff are requesting the City Council consider four options on resolving the loan. Request from CCNC

The CCNC indicates that the City’s decision to reduce community based organization funding in 2014-15 has created significant financial difficulties for the CCNC and in October 2014, the CCNC provided a written request to the City to reconsider the relationship between the City and the CCNC. The letter requested the City consider four options or an alternative if none of the four options were acceptable. The requested options include that the City: 1) assume the CCNC loan; 2) provide funding to CCNC for visitor services and the subsidizing of programs for local families; 3) provide the CCNC a place at the table when discussing Transient Occupancy Tax decisions; or 4) become a significant funder of the CCNC Alternative: the CCNC wants the City to fund the Bidwell Park visitor information services and the CCNC will then begin paying off the loan. The nature of the request was more expansive than the City Council considered during the May 2014 meeting. Further, funds the City would provide to CCNC under option 2 would appear to be used to pay the loan which is essentially the City paying itself. As a result, this CCNC options do not appear to be viable option for the City. City Proposed Options City staff prepared several options for the City Council’s consideration to either resolve the loan, continue the past practice of deferring the loan, or proceed with enforcement of the agreement default provisions. These options and considerations are provided below.

Option 1 – Loan Forgiveness – Forgive the Chico Creek Nature Center of its loan obligation. City staff presented this option in May 2014. The loan was used to benefit City owned property, and an argument could be made that the City directly benefited by the expenditure of loan funds to improve the area leased by the CCNC. However, the recitals to the loan agreement indicate that the loan agreement was to cover the increased construction costs for the new exhibit and classroom facility at the CCNC, items that may not have been constructed but for the CCNC’s intended use. The current situation involves the CCNC not being able to make payments for over five years. Consequently, there is increasing likelihood that our external auditors will view the loan obligation as bad debt. The City Council’s action in May 2015 to move the debt from Fund 347 – Zone I Neighborhood Parks to the General Fund as an account receivable provided a buffer to the City’s operations as well as address the issues auditors may have had with bad debt. If the City had liquidated the loan prior to taking this action, the City would have had to identify sufficient funds to cover the debt. To the extent that it happens during a fiscal year, finding additional resources may impact operations. Finally, eliminating the loan would also eliminate another complicated relationship that is unique among other lease agreements with non-profit entities.

Option 2 – Loan Forqiveness with conditions – Forgive the Chico Creek Nature Center of its loan obligation with conditions as specified by the City Manager. Defer loan payments for a period not exceeding August 1, 2015 until successful negotiations on agreements conclude. If agreement is not reached, proceed with Option 4. Same explanation as provided in Option 1. The City has undertaken a review of City leases in order to establish a citywide policy governing leases and creating more consistency from one lease to another. Currently, the CCNC has a lease which expires in 2027. The City wishes to keep leases to no more than 2-3 years with voluntary extensions to 5 years until the City engages in a more thorough vetting of leases going over 5 years. Additionally, the City needs to strengthen records retention and audit provisions, establish more explicit performance standards, and introduce more comprehensive reporting requirements to leases. The loan situation with the CCNC offers a win-win solution where the City can forgive the loan while modifying its lease agreements to obtain changes meant to protect the City’s assets and the viability of the organizations leasing the assets. This option would provide the CCNC and City time to revise the lease agreement while retaining the ability to enforce loan provisions in the default situation.

Option 3 – Defer Loan Obligations – Defer all payment of interest until July 1, 2016. This options continues the past practice of delaying the obligation. If this option is selected, the City would evaluate the CCNC’s ability to operate as a going concern in order to better advise the City Council in addressing the loan in 2016 Option 4 – No Action – City Council takes no action and City Administration works with City Attorney’s Office to proceed with available remedies specified through the agreements with the Chico Creek Nature Center. The agreements with CCNC include default provisions that may result in the City taking legal action on the loan note. Ultimately, this option would negatively impact the CCNC and result in the City buildings remaining vacant for the foreseeable future. Currently, the CCNC pays utilities and conducts basic maintenance to sustain the status quo of the facilities. The City would become responsible for these costs should the CCNC lose possession of the buildings.

CONCLUSION: The options provided in this staff report should address the long standing deficiency in the Chico Creek Nature Center’s (CCNC) performance on its loan and lease agreements. Actions taken previously buffer the City from an unforeseen financial impact from having to address the loan against the Neighborhood Parks Fund.Opportunity exists for the City to revise the CCNC agreements to better meet the City’s goals related to its property leases while also providing an opportunity for the CCNC to achieve its goal of being a viable organization.

CARD reschedules final budget meeting – July 30, Lakeside Pavilion, 3pm

21 Jul

I was unable to make the CARD board meeting last week. I missed the opportunity to tell them what I think about the budget. According to the subsequent article in the Enterprise Record, only one member of the public showed up with a comment – an Aqua Jets parent, who wanted to say he was happy to see the board going forward with plans to build a fancy new aquatic center. 

It frustrates me that nobody pays attention to this board. I’ll admit, sometimes I get a bad attitude because I think nobody else cares.  I could have put a muster on it and made that meeting last week, but I was tired, just like the rest of you, after a long day, and I didn’t feel like it. 

I’ll admit, I haven’t felt like it a lot lately.  It’s not like they roll out the red carpet to the public. I’ve been trying to get into the Aquatic Center Advisory Committee meetings for a couple of years now. I finally got into a meeting a couple of months ago, only to find the committee was disjointed and many members were not up to speed. Turns out, most of the real discussion and decision making has been going on in ad-hoc committees of former Chico City manager Tom Lando, former CARD manager and board member Jerry Hughes, and members of Chico city staff, the police department, and other public officials.  There have been special meetings called with 24 hours notice. When I’ve tried to get reports of these meetings I’ve been handed around from one staffer to another. I asked to be on the notice list for these meetings.  Interim manager Steve Visconti told me I’d be contacted by incoming manager Ann Willman, who left her post at Oroville Recreation District after only a year or so to take the manager’s position in Chico. He told me I’d get a report of that special “inter government” meeting, but I’m still waiting. Willman was supposed to have started her job July 6.

I’m guessing these meetings are about a sales tax increase initiative, as well as city funding for the aquatic center.

I predicted cost overruns on that center – Lando is already announcing they will need more than twice the budgeted amount – about $75,000 – just for a feasibility study. He wants to get that out of the city parks fund. 

The good news is, they have postponed their final budget meeting, which was to be held in two days, to July 30. I hope more members of the public will show up to address this fiscal irresponsibility. It’s nuts, and we need people to turn out in droves to say so. That’s Thursday, July 30, at 3pm, Lakeside Pavilion, Chico. 

 

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