You can’t fight three City Halls

City Hall #1

• Or can you? Here’s a column about  the City of Stockton’s move to buy a new City Hall.

• In that column, the city claims moving into the building it is leasing at 400 E. Main St. is just too costly — a new City Hall is needed. One big reason it’s so expensive, ostensibly, is because a couple floors need major remodeling.

That may be so.

But the Council should be skeptical about this claim. Presumably the space rented by the city is in the condition the city specified when negotiating the current city lease.  Assured Guaranty demolished the ground-floor cafeteria (Remember “American Cravings?”) and that space is now is now “raw shell space.” Other city-leased space is currently configured as office space, where minimal  work may be required.

The staff’s assessment could be correct. But due diligence requires the Council to verify it.

• Of note is that Assured Guaranty would not comment. So we don’t have its side of the story. There are indications Stockton city officials, too, were unresponsive to Assured when it offered to negotiate. In an Aug. 17 letter to Mayor Michael Tubbs and City Manager Kurt Wilson, Holly Horn, Assured’s chief surveillance officer for public finance, opened with these telling lines:

“After several unsuccessful efforts to meet in person while I was in Stockton on July 26, as well as the inability to arrange a phone call, I am writing you regarding 400 E. Main St. …”

Make of that what you will. I infer two things from from these cross-claims of unresponsiveness.

1). The City and Assured don’t like each other. That goes back to the bankruptcy, Assured’s repo of 400 E. Main and the multi million-dollar haircut the City gave Assured.

2). Assured, satisfied with its existing lease deal, may well have been aloof — until it got wind the city was seriously shopping for another building, at which point Assured got friendly. The late-in-the-game dates of Horn’s visit and her two letters support this interpretation.

City Hall #2

• Ned Leiba, a CPA, member of the Measure A Oversight Committee and fiscal watchdog, issues a newsletter. Here’s his take.

The City Council will meet Tuesday evening to vote to purchase property and expend additional funds to bring us a new City Hall.  The total cost is ostensibly $25 million, but it probably will be much more.

I have attached the article from the Stockton Record by Roger Phillips and the Legislative Text City Hall Leg Text (31) prepared by City staff.

The important missing analysis would compare what that $25 million proposed expenditure would bring to a sensible renovation of the existing, venerable City Hall.

The staff report contends:

Remodeling the building to continue to serve as City Hall would not only be very expensive but would also be too small to meet the City’s current needs. Renovating historic City Hall and constructing a new annex behind it to accommodate current space needs would be cost prohibitive with an estimated expense of $50-60 million to design and construct the improvements. This would result in the need for debt issuance which would have a negative impact to the City’s Long-Range Financial Plan.

We should see the details behind these claims. We need a cold, impartial financial analysis of the alternatives.

On pages 7 and 8 of the Legislative Text, you will see again the “fuzzy graphs” of the Long Range Financial Plan (LRFP). I do not believe the City has released the detailed schedule behind any version of the LRFP since bankruptcy. In the past these fuzzy LRFP graphs have been used to claim the city will go bankrupt if it opened the Fair Oaks Library with costs of under $500,000, and now they are being used to justify $25 million in expenditures.

The City Council refused to adopt the unanimous recommendation of its Charter Review Advisory Commission to place on the ballot a measure to provide Stockton with a strong and independent City Auditor. One of the duties of an independent City Auditor would be to impartially analyze proposals such as this $25 million project. The City meanwhile has not allowed an audit, as required by ordinance, of Measure A funds.  The Measure A financial statements produced and filed with regulators are profoundly, clearly misstated, by millions of dollars. We can have no confidence this proposal is economically sensible without an independent fiscal analysis.

A few of you may recall I expressed my concern about the 2007 pension bonds that were approved unanimously by the City Council. I said the City was headed for a “financial calamity.”  I worry that without a proper financialanalysis by independent experts, not hired by City staff, we will rue the day the City embarked on another plan to spend millions of taxpayer dollars.


City Hall #3?

I agree both that the city should examine restoring its historic City Hall and that the Council should sift the claim that outfitting 400 E. Main could cost too much.

City of Stockton officials deserve credit for turning over a new leaf when it comes to fiscal management. The Council owes the citizens of Stockton the utmost of this diligence to ensure the city’s fiscal prudence is complemented, not compromised, by this proposed major purchase.

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  • Blog Author

    Michael Fitzgerald

    Mike Fitzgerald is The Record’s award-winning metro columnist. His column runs in the paper three times a week. Born in San Francisco, he was raised in Stockton. His column covers diverse beats including, sometimes, the offbeat. Read Full
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