Yes, the ‘Mobile City Hall’ is indeed being bought with General Fund dollars

The City Council unanimously approved spending $100,000 on a “Mobile City Hall” during  Tuesday night’s meeting.

According to the staff report from Tuesday’s meeting, there is “no impact to the City’s General Fund or to any other unrestricted fund” from purchasing the Mobile City Hall.

This is not to debate the merits (or demerits) of a Mobile City Hall. Opining is not my role here. But the staff report’s description of the funding source for the Mobile City Hall is cloudy at best.

As reported by The Record on May 25, 2015, a $100,000 allocation for a Mobile City Hall was included in the 2015-16 general fund budget. The city had just emerged from bankruptcy a couple of months earlier. Before the budget passed, The Record reported:

(City Manager Kurt) Wilson has suggested $100,000 for a “Mobile City Hall” — a recreational vehicle that could travel periodically with city staff to neighborhoods and businesses. The Mobile City Hall, Wilson said, would provide opportunities to help residents apply for jobs or process forms.

And it would provide a modest service increase for a city still struggling to provide for its residents in the early days of its post-bankruptcy era.

“We’re a large city,” Wilson said. “The idea is that we can go to the outskirts, places that don’t feel like they get enough attention, and maybe under that scenario we can take City Hall to them.

“It’s not going to change the world, but it’ll help us to reach people we wouldn’t normally reach. We fully acknowledge that the service level is not as high as we want it to be.”  

The $100,000 was not spent during the 2015-16 fiscal year. Instead, it was carried over to this fiscal year’s budget. Tuesday’s vote was to finally spend the money to purchase that “Mobile City Hall” — with general fund dollars.

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Sierra Club: More clarity needed to Council direction on General Plan

Eric Parfrey of the Sierra Club sent an email today to Mayor Michael Tubbs and the rest of the City Council in reference to the direction given to staff on Tuesday night concerning development of an amended General Plan.

The email from Parfrey essentially demands the final version of the amended General Plan, which probably won’t be complete for a year, makes it clear that there is to be no new development north of Eight Mile Road barring an extraordinary job-creation opportunity like a Tesla plant or a state university.

“We respectfully request that Councilman Holman and Mayor Tubbs clarify that the intent of the motion is to support Alternative C, which includes direction to shrink the Sphere of Influence back to Eight Mile Road, and to add one or more General plan policies that explicitly state the City will consider future amendments to the General Plan for development north of Eight Mile Road for extraordinary projects that reap huge and tangible benefits to the City.

“To be clear, we will vigorously oppose any attempt to retain the existing Sphere of Influence line which includes the Spanos lands north of Eight Mile Road. We hope that we will not have to organize public opposition to the new General Plan over this issue, but we are prepared to do so.”

You can read Parfrey’s entire email here.

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Translating the Silva arrest warrant

By now you’ve probably seen the arrest warrant for former Stockton Mayor Anthony Silva but if not, it’s below. Below the warrant, you can view all the penal codes.

















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Legal medical cannabis=Tax revenue

The City Council has a special meeting Tuesday night with an item that proposes setting a tax rate of $50 for every $1,000 of medical cannabis sales and cultivation. Stockton voters approved two medical cannabis-related measures in November. You can view Tuesday’s agenda here.

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Housing, jobs, safety, education: Have your say in District 2

District 2 Councilman Dan Wright will host a community forum for constituents Saturday. The meeting will focus on affordable housing, job creation, public safety, and educational opportunities. More details here.

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CPA Ned Leiba on Stockton’s fiscal health

CPA Ned Leiba, the shy and retiring sort who never shares his opinion, was not wild about this story yesterday, which cited a publication’s article ranking Stockton among America’s healthiest cities fiscally.

I’ll say off the bat that the article didn’t necessarily say Stockton is healthy — just that it’s healthier than a lot of other places right now. A person also could be one of the healthiest patients in a hospital, but that doesn’t mean he’s healthy, either, does it?

Anyway, here’s what Mr. Leiba wrote. He began by referring to this paragraph from my article:

“According to the city, the overall [pension] obligation is $343 million, $30 million more than a year ago. Some outside observers have expressed fear that all cities’ CalPERS obligations could balloon in an economic downturn.”

Then, Leiba wrote,

“Look at the 6/30/2016 CAFR and my comments that are cogent:

“The CAFR displays a staggering increase in unfunded pension liabilities. Per the statement of net position, the net liability is $449.3m versus $414.7m a year before. The one year increase in unfunded pension liabilities, after all the payments, was $34.7m.

“But the true unfunded pension liability is far higher than $449.3m. You must add the unfunded pension bonds. The city tells us that the present value of those bonds is only $53.7m. But you must increase this liability by the amount of “contingent general fund payments” that could be millions. Ignoring the millions of “continent” payments, just using the $53.6m results in an unfunded pension liability of $502.9m.

“But the City uses an unrealistic discount rate of 7.65% to value the pension liability. The CalPERS Board voted to reduce that 7.65% to 7.5% and now to 7%. The notes to the financial statements show the effect of a 1% change in discount rate. With just a 1% adjustments, the unfunded pension liabilities jump to $716.5m. A proper discount rate is a risk-free 3% or at most 4%, not 7.65% or 7.50% or 6.50. I estimate that the “true” unfunded pension liability using a proper 3% discount rate (as would be required under FASB rules) would be $1.495 billion. If we used the upper end of the risk free scale 4%, the liability would be a mere $1.282 billion.”

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A federal chill on affordable housing?

The Portland Mercury in Oregon posted a detailed story yesterday on how the election of President Donald Trump has sent a chill through the affordable housing community:

The reason is Trump’s campaign promise to reduce the federal corporate tax rate from 35 percent. … “The bottom line is you will get less housing, and it will be harder to serve lower-income families,” says Michael Novogradac, managing partner at San Francisco-based accounting and consulting firm Novogradac and Company. “There’s no silver lining to having less funds available.”

For all the details on a very complicated matter, read the entire story here.

I shared the article with DFA Development’s Chris Flaherty and asked his thoughts. Flaherty’s company opened Stockton’s Cal Weber 40 affordable project last year and is in a collaboration with Ten Space on a planned affordable project in downtown’s Medico-Dental Building.

Flaherty responded with these comments in an email:

“The (Portland Mercury) article echoes exactly what we have been experiencing over the last 2 1/2 months on our most recent deals set to close.  We have 2 California projects with 102 affordable units that were scheduled to close this week. Following the election, the idea of corporate tax reform eroded the appetite for tax credits.  This compressed yields and deleted almost $2 million in equity.  Fortunately, we were able to resurrect the projects financing but not without contributing the eroded equity ourselves.   The state, recognizing this dilemma, extended the closing dates by 90 days, thus, offering a reprieve.   We are on track to close at the end of the month. 

“It affected many of our peers as well and all of our upcoming projects in Hawaii and California including our Medico Artist Lofts project.   We do feel, however, that we will be able to get them done.  We are restructuring our financial feasibility models to find ways to make up the gap in credit pricing.  The economics are just a lot more difficult.  The price for tax credits has dropped almost 20% on most deals for one dollar of credit.   This will make if very difficult to develop the much needed housing that not only our country and state need but more importantly our city and county needs.

President Trump’s father, Fred Trump, developed many affordable housing units in his life and I think he will remember the need is great and the financing extremely difficult.”

We’ll see.

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Accountant Leiba weighs in on city finances

New Stockton Mayor Michael Tubbs selected new Councilwoman Susan Lenz as the chair of the City Council’s audit committee. It’s a logical choice, considering Lenz has been an accountant for 38 years. Tubbs formerly chaired the audit committee.

The audit committee (Dan Wright and Christina Fugazi are the other members) is slated to meet at 4:30 p.m. today at City Hall. You can view the agenda here. It includes discussion of the city’s recently released Comprehensive Annual Financial Report, or CAFR.

Lenz will preside over today’s meeting. But another accountant — longtime Stockton budget hawk Ned Leiba — already has weighed in, as he is wont to do. Leiba posted his thoughts about the CAFR and city finances in general in one of his regular group emails Wednesday evening.

You can read Leiba’s email here.

A caveat: City officials have been known to dispute Leiba’s analysis on more than one occasion.

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Read the transcript of Michael Tubbs’ speech at tonight’s swearing-in ceremony

New Mayor Michael Tubbs just delivered a four-page speech at tonight’s swearing-in event at the Bob Hope Theatre.

You can read an advance copy of the speech here. 

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Tubbs: Holman ‘an exemplar of a public servant’

Ceremonial swearings-in will be held Tuesday night for Mayor Michael Tubbs and council members Jesús Andrade, Susan Lenz and Dan Wright. Also at 5:30 p.m. tomorrow at the Bob Hope Theatre: Tubbs’ committee assignments and Tubbs’ official appointment of Elbert Holman as vice mayor.

Click here for Tubbs’ City Council seating chart and his statement on Holman. To read more on the new vice mayor, click here.

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