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You Have Reasons To Be Concerned About Ventura’s Pensions

August 27, 2018/in Newsletters/by VREG Editors

“Courage Cannot Be Counterfeited. It Is One Virtue That Escapes Hypocrisy”

—Napoleon Bonaparte

The City of Ventura has a spending problem, and it’s time for an intervention. The fiscal crisis is not widely understood. At its core are the promised unfunded pensions for public employees.

Ventura’s pension contributions for 2018 are $17,410,000. The annual contributions will balloon to $32,630,000 by 2025. That’s a compound annual growth of 9.4%. No other expense item in the US economy is growing that fast. As of 6-30-15, the entire unfunded liability for the City of Ventura is over $169.2 Million ($169,292,212). It is not possible to get out of the CalPERS retirement plan. As of 6-30-15, to terminate the CalPERS plan would costs $1.2 Billion ($1,197,537,902).

Ventura is not alone. Cities up and down the state must face up to the problem. However, Ventura’s pensions are a debt time bomb.

Ventura is already paying 34 cents to CalPERS for every dollar it pays its active employees. In six years, that amount will go up to an unsustainable 51 cents for every dollar of payroll—more than any city in Ventura County. Pensions are already crowding out other essential city services like filling potholes, fixing infrastructure and even hiring more police officers and firefighters.

How Pensions Affect You Directly

Pensions Will Crowd Out Needed City Services

Expect senior programs and after-school activities to disappear first. Next, the city will defer maintenance and capital

expenditures. The city will extend service contracts for police cruisers, city vehicles, and equipment. These things represent only a fraction of Ventura’s budget. Reductions in services will never be enough to stop the detonation of the pension debt bomb.

Ventura can only fix the problem by raising taxes, cutting needed services, or both. There is a direct correlation between the money Ventura spends on pensions and the city’s ability to pave streets and repair sewers.

Reckless Spending Continues

Despite knowing this, Ventura’s City Councilmembers increase spending without regard to the long-term consequences.

The Roving Fire Truck Crew Adds To Ventura’s Pensions

Last month, the Council voted 4-2 to give the fire department $600,000 for a roving paramedic fire engine. City staff, the fire department and the fire union proudly pointed out grants and budget manipulation will pay the first year expense. No one on the Council asked what happens in year two and beyond. Fire Chief David Endaya asserted Ventura needs the engine because of an increase in calls. Yet he lacked specifics about whether there are more cost-effective ways to deliver the services.

To their credit, Councilmembers Mike Tracy and Christy Weir voted “No.” They wanted more details. Nonetheless, the Ventura Fire Department got its new engine, even though no one gave adequate data to support the decision.

Interim City Manager Dan Paranick did not recommend funding the roving engine for this year. Paranick worked with Fire Chief Endaya, but in the end, he said, “I haven’t gotten myself to a place where I’ve been comfortable yet, where I could sit here and justify the need based on the demand. That’s why I did not recommend it.”

Days later, he announced his resignation to accept a position closer to his home in Simi Valley.

The Fire Department isn’t the only group benefiting from the spendthrift City Council. Earlier this year, the police received pay increases of 5% adding to the city’s future pension liability.

In 2017, 90 of the top 100 salaries on the city payroll are police officers and firefighters. Every one of the Top 100 earns more than $198,800 in pay and benefits. For perspective, the average family in Ventura earns $66,000 per year with two wage earners.

In reality, Ventura pays pensions for 3.3 retired police and fire employees for every two public safety employees on the job. That’s untenable.

So how is the Ventura City Council managing spending, and considering the long-term financial effect of their decisions? In short, they’re not.

Elected officials first believed the extra $10.8 million collected from Measure O would afford them the ability to meet new programs. But, Measure O is now a supplement to existing projects. Councilmembers frequently discuss the need for tax increases.

Moreover, it is not only about pensions.

According to the Capital Improvement Plan (CPI), Ventura Water Department insists on spending $538 million to convert wastewater into drinkable tap water. There remains the probability that water rates will increase by 200%.
Ventura’s golf courses lose $1.7 million annually on the debt they incurred.

When the money runs out, it has forced other cities to find solutions. They turn to the only tools they have at their disposal: raising taxes, cutting needed services, or both. Some even filed bankruptcy.

Economist Herbert Stein once said, “If something can’t go on forever, it won’t.” Ventura is on a trajectory that cannot go on forever.

Your Chance To Make Ventura Better

This November, Ventura has an unprecedented opportunity to tell the City Council, “No more new spending.” There are three open seats on the Council in this November’s election.

Past financial overspending must stop. New Council Members with an economic understanding of operating a city must prevail. Voters need to look past the individual candidates’ popularity to carefully consider their ability to understand and manage city finances.

Desirable candidates will:

Treat city money as if it was coming out of their pocket, which it is
Understand the Comprehensive Annual Financial Report (CAFR) before taking office
Understand the city budget and capital expenditure projects
Hold city staff accountable to present successful projects to the Council
Hold the City Manager accountable for results
Make difficult decisions knowing their decisions will anger some constituents
Do the right thing, not the same old, easier thing
Represent of the citizens of Ventura, not be a cheerleader for city staff recommendations

Editors Comments

You have the opportunity to make Ventura better this November. Voter turnout needs to be high for this crucial City Council election if Ventura is to improve. Decisions these new Councilmembers make will immediately impact the city’s economic vitality. We mustn’t leave this election to chance.

Encourage people to vote. Educate everyone on the grave crises facing the city today. Ask candidates how they plan to address these crises. Listen to their answers. Hold them accountable after they’re elected. If we do all these things, we’ll improve the chances Ventura will remain fiscally sound now and in the future.

Hold These Councilmembers Accountable For Their Past Spending

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program so you can write directly to that Councilmember.

Let them know what you’re thinking. Tell them what they’re doing right and what they could improve upon. Share your opinion. Not participating in government weakens our democracy because our city government isn’t working for all of us.

Neal Andrews, Mayor		Matt LaVere, Deputy Mayor
Cheryl Heitmann		Jim Monahan
Erik Nasarenko		Mike Tracy
Christy Weir

For more information like this, subscribe to our newsletter, Res Publica. Click here to enter your name and email address.

Ways Ventura Lost In The Harbor Church Deal

July 31, 2018/in Newsletters/by VREG Editors

“You’ll Never Reach Your Destination If You Stop And Throw Stones At Every Dog That Barks” —Winston Churchill

Harbor Church in midtown Ventura

When it comes to real estate, Ventura’s City Council is, at best, inconsistent. At worst, they are reckless with our money. Their latest decision costs taxpayers over $1,000,000.

On June 16th, the Council accepted the city staff’s recommendations for the Harbor Church. Like some other real estate recommendations, it loses money.

How We Got Here

The Harbor Church—located in midtown Ventura—was feeding the homeless as part of their outreach program. Nearby residents were upset with the homeless. They asked the city to get Harbor Church to stop. The city said, “Stop it.” The church cried, “You’re violating our religious freedoms,” and threatened to sue.

The city is weak-kneed and folds at the hint of a lawsuit. Their solution was to buy out the Harbor Church to get them to move. City officials will claim this solution was less expensive than the legal costs of a suit but, at the heart of it, this is still a real estate transaction.

Nothing About This Deal Adds Up

2016 was a year of financial mistakes for the city.

The city paid church officials $2,300,000 to buy the Harbor Church property in 2016. City Hall and Harbor Church agreed the value of both the land and the church building was $1.6 million. The actual sales price included an additional $700,000 to pay the Church to move. By any measure, Ventura overpaid for the property.

City staff proposes to demolish the church, subdivide the property and sell the lots. Total cost to the taxpayers to clear the lot will be $2,670,000.

Purchase Harbor Church Building $1,600,000

Moving Expense $700,000

Demolish Church Building $350,000

Remove Hazardous Material $20,000

Total $2,670,000

The city staff enthusiastically reported the value of the property on which the Harbor Church sits increased by 66% since 2016. We see that factored into their optimistic projections. They believe we can get four lots on the existing site. They estimate each lot will sell for between $250,000 and $375,000.

The arithmetic didn’t add up from the beginning. A staff report lists the property and building appraisal at $1,350,000 in July 2017. A year earlier, the city paid $1,600,000 for the church and the lot—$250,000 more than the appraised value. This transaction lost money from the very start and doesn’t begin to realize the gains from the purported 66% increase in land value.

Something Else Doesn’t Add Up Either

The city staff used an optimistically over-valued selling price for the lots.

We pulled data from a local title company for homes sold in zip code 93003 for the past two years. What we discovered was shocking.

	Average	Median	Avg SF	$/SF	# Sales
2016	$ 628,321	$ 595,000	1619	388	184
2017	$ 633,269	$ 599,000	1700	372	322
2018	$ 593,415	$ 594,000	1747	340	179

According to the data, lots on Harbor Church’s corner should sell for between $215,000 and $233,000. We derived those figures using the standard property developer’s rule-of-thumb. The land is worth 1/3 of a home’s selling price. The market values the lots are well below the $250,000 to $375,000 the city staff believes they’re worth.

A More Realistic Calculation Of The Transaction

Using this realistic data from the title company and giving the city the higher anticipated value, the sale of the property would actually look something like this:

Sell Four Lots ($233,000 each) $932,000

Lease Payments From Harbor

Church For 12 months $36,000

Realtor’s Fee (6%) ($55,920)

Total Revenue $912,080

Total Costs (from above) ($2,670,000)

Total Loss on Transaction ($1,757,920)

Is The City Looking Out For Your Money In These Real Estate Transactions?

In April, the City Council sought outside experts for a real estate decision on the property at 505 Poli. The city staff made a recommendation that made the City Council uneasy. The Council instructed city staff to seek advice from a licensed commercial realtor. The Council wants to determine the actual value of the property. As far as we know, city staff has not reported the findings to the City Council in the last 90 days.

The Council was cautious with 505 Poli. They appeared skeptical of the city staff’s recommendations. They were willing to await the findings of an independent appraiser. So, why was the City Council so willing to accept staff’s opinion on the Harbor Church property?

The Council voted 6-0 to proceed based on city staff’s recommendation. Councilmember Jim Monahan was absent at the meeting. The City Council was uneasy with staff’s 505 Poli valuation and recommendations. One would think the Council should be cautious with the Harbor Church property, too.

The City Council’s inconsistent real estate decisions should concern citizens. It causes taxpayers to doubt their financial acumen. The Council trusted the city staff again, with the same disastrous, money-losing results. Decisions that lose over $1,000,000 makes one question whether they are good custodians of our tax money.

Editor’s Comments

We’ve believed the city should get out of the real estate business for a long time. The litany of poor decisions grows—the WAV Building, Brooks Institute lease, 505 Poli and the Harbor Church property.

Ventura owns commercial real estate throughout the city. As these examples demonstrate, the city has not made financially responsible decisions regarding these properties. We recommend the city to seek an independent appraisal of its property, and then to sell it to private enterprise. The city could then take the proceeds and invest them to cover the huge unfunded pension liabilities we face in the coming years.

At the very least, the city should seek advice from licensed realtors and experts whenever making a real estate decision.

Large financial decisions deserve scrutiny. When stewarding taxpayer money, it’s best to proceed with caution and with thought. It’s too easy for city staff to recommend spending taxpayer money on losing projects. We urge the City Council to approach each real estate transaction with skepticism. Treat the money as if it was coming out of their own pockets.

Insist Ventura Gets Out Of Commercial Real Estate

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program so you can write directly to that Councilmember.

Neal Andrews, Mayor		Matt LaVere, Deputy Mayor
Cheryl Heitmann		Jim Monahan
Erik Nasarenko		Mike Tracy
Christy Weir

For more information like this, subscribe to our newsletter, Res Publica. Click here to enter your name and email address.

Ventura needs a Water Commission to oversee the water and wastewater processing.

With Water, The Simplest Solution Is Best

June 26, 2018/in Newsletters/by VREG Editors

“Water is life, and clean water means health.” —Audrey Hepburn

Ventura needs to get its priorities straight about water—and fast. On July 9th, Ventura Water will ask the City Council to approve direct potable reuse (DPR). Ventura Water views DRP as a primary alternative source for increased drinking water. The project will cost $538 million of taxpayer dollars. The trouble is, it’s an untested, unproven and unregulated solution to our water needs. Why would the City Council gamble with the health of its citizens?

Ventura Water already gave a similar presentation to the Ventura Water Commission in May, when they asked the commission to approve the 2018 Annual Water Report. Ventura Water’s priorities were to add DPR as an additional water source. State water would only act as a backup supply to the recycled water program.

The Ventura Water Commission rejected the idea. They made it clear that the city should look to State water as a primary resource to supplement our existing water sources and reconsider DRP only as a backup when it is perfected.

How We Got Here

Two legal agreements jeopardize Ventura’s water supply. The first was a Consent Decree requiring Ventura to cease putting 100% of its treated wastewater into the Santa Clara River estuary. It needs to be diverted somewhere else by January 2025.

The Consent Decree stems from a Federal complaint filed by Whistoya Foundation [WISHTOYA VS. CITY OF SAN BUENAVENTURA, CASE NO. CV 10-02072]. The City Council consented in March 2012. Rick Cole and Shana Epstein signed the consent decree on behalf of the city. The city no longer employs either of them.

The second was a new contract between the City of Ventura and the Casitas Municipal Water District executed by the City Council in May 2017. The new contract obligates Ventura to reach Water Balance by 2020 to maintain its current water rights. To achieve water balance, Ventura must find an additional source of water.

Both agreements are disturbingly vague. The Consent Decree requires Ventura to cease putting treated wastewater into the estuary. It doesn’t specify where to place treated water or how to use it. It only states it cannot go into the estuary.

There is one exception. If a scientific panel, based on biological studies, decides the environmental health of the fish and wildlife in the estuary need that water, Ventura may release 50% into the inlet. There have been four studies in the last six years. The findings indicate the risks are unacceptable. We’ve noted some of them below.

The new Casitas Water contract entitles Ventura an amount of water based on projected needs and adjusted for drought staging conditions. Ventura Water anticipates our water needs at 5,669 acre-feet per year by 2025. By then, they expect we’ll be out of our current drought conditions. Under the1995 contract, Ventura was allowed a minimum of 6,000 acre-feet of water per year. That water could be used in the western part of Ventura (everything west of Mills Road) and the eastern part of the city, if necessary. The new contract changes that and puts East Ventura at a disadvantage. The old agreement allowed Ventura to blend Casitas water with the East End to achieve better quality. The new contract does not allow any use for the East End of Ventura.

The Race To Make Ventura First

Ventura Water seized the opportunity to make the city the first to used recycled wastewater to drink. No cities in the world have used recycled water except Windhoek, Namibia and a small town in Texas. Neither place had other water options.

Since 2012, employees at City Hall and the Ventura Water Department have been actively publicized and pushed VenturaWaterPure. They view the project (toilet-to-tap) as the primary source to supplement our drinking water resources. They believe State Water should only be used as a backup in case something went wrong with the recycled water.

Ventura Water says we need the project:

(1) To augment our water supply from a reliable source

(2) As beneficial reuse of wastewater effluent

(3) To improve our water quality.

They assure us that VenturaWaterPure will meet these goals. Their assurances are misleading and just not right.

What We Know Now

We’ve learned a lot since 2012 when this began. For instance, in February 2018, Stillwater Sciences issued a final report on releasing treated water into the Santa Clara River estuary. It recommended diverting 40%-60% of the wastewater, not 100% as initially presented to the City Council. Stillwater Sciences filed the report with the State Water Resources Control Board (SWRCB). The SWRCB has not decided on the amount to be released yet.

In August 2016, a report by a state-appointed panel of experts concluded it was “technically” feasible to use DPR, but there are serious health risks. Here are some fundamental problems outlined:

Guidance and regulations currently do not exist for DPR
Of specific concern are chemicals adversely affecting the development of fetuses and children, plus any as-yet-undiscovered compounds.
There are no standards to guard against Cryptosporidium, and Giardia to maintain a risk of infection equal to one in 10,000.
Reverse osmosis is unable to detect and remove low molecular weight compounds such as halogenated solvents, formaldehyde, and 1,4-dioxane.
The inability to identify solvents on the Proposition 65 list that reverse osmosis membranes cannot remove.

Notwithstanding this new information, the City of Ventura continues in its pursuit to be the first to use recycled wastewater for drinking. The water department soldiers on and plans to spend many millions of dollars starting in July 2018 for consultants and a project that may never see the light of day.

The Cost Comparison

The cost of DPR wastewater is high. According to the Capital Improvement Plan (CIP), the wastewater and water costs will total approximately $538 million once financing costs are added. Included in those costs are advanced purification facilities to treat the wastewater that will cost $77.7 million. Also included is another $170 million to pump the water north to the desalination/Reverse Osmosis plant. Other infrastructure improvements comprise the remaining costs—including a brine line to carry away contaminants from the new RO plant.

By comparison, the pipeline for State Water is estimated by the Ventura Water Department to cost $27 million. That does not include the annual fee for the State Water Pipeline (SWP) entitlement. The city currently pays $1.2 million per year for that option (which the city never used). Over $50 million has been cumulatively paid in annual installments to the SWP since 1972 and will continue until 2035. Every citizen’s water bill includes a portion of that payment. Nor does it cover the additional cost of water pumped through the water line. Keep in mind that State water can be injected directly into the Ventura water system. The water is reliable and used throughout Southern California.

The Decision Facing The City Council With Water

The City Council will make a monumental decision on water July 9, 2018. They will set Ventura’s water priorities for decades to come.

They will be asked to decide between State Water and DPR as the first supplement to our existing water supply. Their decision will send a message whether Ventura wants to be first with an untested, unproven, unregulated water system with DPR or safe with State Water. We will also learn whether they will listen to the Water Commission or ignore their recommendations.

Finally, we’ll learn how the City Council plans to comply with the Consent Decree. Will they accept scientific findings to divert only 40%-60% of treated wastewater from the Santa Clara River? Or will they ignore the Decree’s exception and insist on diverting 100% at the cost of $400 million?

Editors’ Comments

The City Council must make a policy decision now and direct Ventura Water to concentrate on the importation of State Water immediately. The current effort to plan, finance and build a VenturaWaterPure treatment plant and RO plant to process recycled water for DPR by 2025 must stop or at the very least be delayed until further study. We only hope that the City Council has the leadership and strength to change course and not feel bound by this misguided concept of past water leaders.

Protecting public health is paramount. Complying with the Consent Decree is also essential, but we can keep our part of the bargain and adhere to the decree by pumping the water into settling ponds for absorption into groundwater basins such as the Mound basin, then ultimately into our water system.

Lastly, we don’t need to build a desalination plant/RO facility now or in the next five years. However, it should not be forgotten. It will be required in the next 25 years to filter water pumped out of the Mound basin and to filter DPR. We must prepare our community for that as our population continues to grow.

As for the Consent Decree, we suggest that the City Attorney get to work. Present the fact that the current project is infeasible due to technical infeasibility and lack of regulations and extend the term for compliance beyond January 2025—say 2030. If they do not agree, that is why we have a court that will listen to logic, and common sense hopefully will prevail.

Insist The City Council Makes State Water Ventura’s First Option

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program so you can write directly to that Councilmember.

Neal Andrews, Mayor		Matt LaVere, Deputy Mayor
Cheryl Heitmann		Jim Monahan
Erik Nasarenko		Mike Tracy
Christy Weir

For more information like this, subscribe to our newsletter, Res Publica. Click here to enter your name and email address.

The City Should Get Out of the Property Rental Business

May 21, 2018/in Newsletters/by VREG Editors

“We need leadership. We don’t need a doubling down on the failed politics of the past.” —Paul Ryan

505 Poli building. Crime lab in the lower right corner.

City Council Makes The First Step Toward Dealing with Surplus Building

To get realistic information for the City Council to decide about 505 Poli, Councilmember Mike Tracy presented a motion to seek advice from a licensed commercial realtor. Councilmember Jim Monahan seconded the motion. The Council unanimously agreed after City Attorney evaluated the right to sell the property, to seek advice from a licensed commercial realtor. The goal is to “determine (the) value of 505 Poli Street including the Crime Lab (appraisal and parking analysis study). Then to decide on disposition (of the property).”

Good decision.

Why The City Should Get Out Of The Property Rental Business

The 505 Poli building adjacent to City Hall exemplifies why the City of Ventura should not be in the property rental business. The city owns several properties. Ventura needs some to house various city departments and needs others for future use. However, the city owns and operates some for the sole purpose of generating income — rental income property.

Citizens have a right to expect the city to manage 505 Poli wisely.

When public money is used to buy rental income property, citizens have a right to expect the city will manage the investment wisely. Acquiring and operating such property requires knowledge and expertise to protect the investment. In the case of our city, the City Council makes the decisions. They rely on the City Manager and city personnel for sound advice.

Here’s the rub. Ventura city personnel have demonstrated historically—and continue to show, as we will later explain—that they do not have the knowledge or experience needed to assist the City Council in making decisions in such matters.

Why The City’s Bad At Property Rental

There are four major issues with city-owned rental income property:

First, the daily maintenance and management of these properties require constant attention. Buildings cost money to operate with or without a tenant and thus are a continual liability and drain on public resources. Private owners use qualified property managers to manage their property. If those managers are not able to produce any income to the owner after expenses, the owner fires them.

Should Ventura be in the property rental business at all?

Second, the city does not have a structured professional approach to operations and tenant management. It is merely an additional task for someone in some department to look at in and among all of their other daily tasks, which staffers usually place behind the immediate problem of the day. Income property must be monitored and requires constant professional attention. Fail in that task, and the supposed investment will fail. The Brooks Institute rental at 505 Poli was a debacle and is the perfect example of why the City Council should not rely on city staff for help in trying to operate such property. Still, they persist.

Third, properties are acquired and operated long past their usefulness to our city. Once the city uses taxpayer money to pay for the property, the City Council and city staff blot the investment out of their minds. If the property is not producing the expected income or outlived its purpose, it should be placed on the market and sold. To spend taxpayer’s funds without any concept to how much the city has already spent on past failed projects for the same property is wrong.

Finally, the City believes that it is acceptable to compete with private free enterprise and offer free rent or discounted rent for city-owned buildings and property acquired with taxpayer money. Private property owners are encouraged to invest in Ventura, but why would anyone make such an investment when the City is a major competitor? It is unfair competition and constitutes a misuse of taxpayer’s funds.

The City Council needs to address these problems.

505 Poli Confirms That Ventura Is Bad At The Property Rental Business

Appraised for $3.55 million in Sept. 2005, the City of Ventura acquired it in November 2006 for $4.03 million. Our then-City Manager pushed the acquisition. The Council followed his advice. To fund the purchase $1.23 million in General Funds were used together with another $2.8 million from a particular service fund — Workers Compensation Fund. The use of the Workers Comp funds should have been a warning to the City Council. That fund pays for future worker’s compensation claims. The interim City Manager, Johnnie Johnson, exposed that budget manipulation when he advised the City Council in 2012 of a $5 million deficit.

Just why the City Council thought “robbing Peter to pay Paul” was a good idea defies logic.

Questions remain as to how much the city has spent to acquire, improve and maintain 505 Poli.

Then there is the building itself. The City accepted the premise—and the adjacent old County crime laboratory which was part of the deal—knowing that asbestos filled this old Ferro-cement structure. The removal of asbestos and hazardous material remediation in the crime laboratory alone was estimated to cost $500,000-$700,000. The list of deficiencies abounded—seismic conditions, old air conditioning systems, old electrical systems and a 60-year-old elevator that hinders tenant usage.

In 2006, City staff advised the City Council that if they decided to buy the property, the city would get a return from the investment in 6.3 to 8.8 years. There was no return on the investment. The building was repurposed to provide free or low rent to new tech startup companies. City staff reckoned that if the startups succeeded they would do business in Ventura and bring jobs to the community. The City Council allocated another $5 million for that purpose. However, aside from the single success of Trade Desk, the project failed.

Six years later, in February 2012, the Ventura Chamber of Commerce agreed to pay $1,000 cash per month for the first floor. In March & April 2013, the Trade Desk leased the 4th and 5th floors for $6,025 a month at which time the City Council spent another $62,750 in improvements. Trade Desk left and in Feb. 2016, the city then tried to lease the two top floors to Brooks Institute. Demolition proceeded on those two floors, and since Brooks Institute defaulted, those floors have been vacant. They remain empty today.

By this simple accounting, the City of Ventura has spent or is obligated to pay an additional $4.6 to $5.0 million with no net rental income to justify the investment over the last 12 years.

Spending More Money Won’t Fix What’s Bad About Ventura’s Property Rental

The latest proposal put forward by the Public Works Department recommends the city sink more money into the building. On April 16, 2018, the city staff recommended the City Council spend another $2.0 million to build tenant improvements on the 4th and 5th floor of 505 Poli. That report contained a lot of facts and figures but was notable for the lack of a feasibility study.

City staff suggested in the report were that if the City Council spends the money, 505 Poli would then be considered a Class A property rental property and would rent for $3 a square foot because of its downtown location. There was no rental comparison survey to support the plan. There was no vacancy survey included. The report also ignored the fact that vacancy is running at 25% citywide on commercial property. The entire argument assumes that if “we build it, they will come.” The recommendation also suggests our city would receive a monthly income of $53,413 after the improvements at 100% occupancy. Great promise, but it lacked facts and is unrealistic.

Then something happened in the city staff presentation that further demonstrated how they lack the knowledge and experience to guide the City Council on rental properties. The Public Works presenter hinted a possible tenant would take the space and finance the tenant improvements in exchange for significantly reduced rent. Almost immediately, Jeff Lambert, the Community Development Director, corrected that information. The potential new tenant had pulled out earlier that week. There were no interested parties, at this time. It was apparent these two departments were not communicating, and the facts were not straight before asking the City Council to spend $2 million.

Editors Comments

We recommend several things about 505 Poli and city-owned real estate in general.

First, the City Council should follow up on how much taxpayers have spent to acquire, improve and maintain 505 Poli. The total amount may surprise some of them.

Second, the City Council should hold the city staff to a higher level of thoroughness and professionalism before recommending spending taxpayer money.

Third, and most importantly, city government should get out of the property rental income business and find a qualified, reputable real estate company to lease and manage all city-owned rental property.

Insist The City Council Heeds The Input Of Outside Consultants Before Deciding What To Do On 505 Poli

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program so you can write directly to that Councilmember.

Neal Andrews, Mayor		Matt LaVere, Deputy Mayor
Cheryl Heitmann		Jim Monahan
Erik Nasarenko		Mike Tracy
Christy Weir

For more information like this, subscribe to our newsletter, Res Publica. Click here to enter your name and email address.

What You Missed In The 2018 State-Of-The-City Speech

April 4, 2018/in Newsletters/by VREG Editors

“We’re no longer a quaint little beach town.” —Ventura Mayor Neal Andrews

Mayor Neal Andrews’s State-of-the-City address was noteworthy more for what he didn’t say. The speech was a summary of last year’s events delivered by each of the major department managers with summary comments by Mr. Andrews.

What this year’s address lacked was a vision for Ventura’s future. Neither Mr. Andrews nor the city’s department heads mentioned job creation, new sources of revenue or business development. Instead, we heard how the city utilized Measure O’s $10.8M sales tax revenue.

The fact remains that Ventura faces significant challenges. The recovery from the devastating Thomas Fire has brought out the best in people but also exposed failures in systems and processes. We acknowledge the heroic efforts of citizens, police, fire and water personnel who fought to prevent further tragedy. But, we must temper those accomplishments with the systemic failures by the local government that contributed to this horror.

2018 Challenges Not Addressed In The State-of-the-City

Rebuilding After The Thomas Fire

Post-fire reconstruction is overwhelming the Building & Safety Department. Community Development Director Jeff Lambert put a brave face on it, but the stress was palpable.

City Manager

There is currently no City Manager. Assistant City Manager Dan Paranick stepped up to lead the city’s recovery efforts. From all indications, he is performing proficiently. Nonetheless, the search goes on for a permanent replacement.

Water Department’s New General Manager

New Ventura Water General Manager, Kevin Brown assumed leadership only weeks before the Thomas Fire. He now faces the double task of improving performance while he defends the city against lawsuits filed in the aftermath of the Thomas Fire.

Elections By District

The 2019 City Councilmembers will represent specific voting districts. Before 2018, voters elected Councilmembers “at large” to serve the entire city. This change will force Councilmember Mike Tracy and Mayor Neal Andrews to retire from City Council. New faces representing the Ventura Avenue and East Saticoy Districts will occupy their seats on the Council.

The Deafening Silence

In the closest thing to providing a vision of Ventura’s future, Mayor Andrews laid out his commitment to “focus on building prosperity.” He plans to support the business community, but he shared no specific policies or initiatives.

Another of Mayor Andrews’s commitments was to “radically increase the city’s technology.” He plans to do this through an improved broadband strategy. He revealed no further details or costs or how to pay for this plan.

Pragmatically Looking Ahead

What we know is Ventura faces specific, severe financial and budgetary challenges, even with the Measure O revenue. What we don’t know is from where the extra funding will come.

Other issues not commented on were:

Ventura will receive less property tax revenue from the 535 houses ravaged by the Thomas Fire.
Ventura can expect lower gasoline sales tax revenue because of trends towards less driving.
Unfunded pension costs will increase another 10%-20% next year.
The recent rains increased road damage on unrepaired streets. Telegraph, Victoria, Wells, and Thompson all show the effect of the storms.
Ventura Water needs an extra $500-$600 million over the next decade for water and wastewater infrastructure. Recent rate increases over the past four years will not cover this shortfall. Water rates will increase again.
Legal costs to defend the city against lawsuits filed in the aftermath of the Thomas Fire will come from the General Fund. The unbudgeted expense could result in higher fees.

Where Is The Vision?

There was one tiny glimmer of vision in Neal Andrews’s address. He said, “We [Ventura] are no longer a quaint little beach town. We’re among the top 10% of the largest cities in California.” Mayor Andrews recognizes a truth many of us have known for years. Ventura has urban issues, and we can’t solve urban problems with provincial solutions. We need fresh thinking.

However, Mayor Andrews and the city staff have not shared a future vision. Some may look to a new City Manager to provide a long-term plan. But experience indicates this is wishful thinking.

Rick Cole nearly ruined Ventura financially.

In 2004, the City Council hired Rick Cole. Mr. Cole had a grand urban development plan for Ventura. He spent millions planning to narrow Victoria and make Ventura a “walking community.” His unrealistic thinking nearly ruined Ventura financially. The economic impact will haunt Ventura for decades to come.

Mark Watkins inherited a mess from Rick Cole.

Following Mr. Cole, the City Council hired Mark Watkins. Mr. Watkins did not have the

grandiose vision of Mr. Cole. The City Council employed him as a caretaker. Unfortunately, he wasn’t able to overcome the problems left by his predecessor. He inherited budget deficits. He managed those deficits by not hiring more employees. The remaining city staff he inherited stumbled executing his vision. As an example, Mr. Watkins lack of supervision surfaced when his team fumbled Brooks Institute. That mistake cost Ventura taxpayers over $261,000.

The two new members of the City Council may have a vision, but they are unknown and have no experience.

Editors’ Comments

Ventura is struggling. We’re struggling following the Thomas Fire. We’re struggling financially. We see the struggle in the faces of our neighbors. We see it in the faces of people on the street. We read it social media.

If the city is to move forward, it’s up to us to provide that vision. The government does not create jobs or develop business, nor do we want them to. Government (the City) is the last entity you want to create jobs. The government does better to stay out of the way so businesses may thrive.

What Government can do is create an environment that is favorable for business. They can do so by:

Issuing permits faster
Charging competitive fees (compared to other cities in the county)
Creating acceptable zoning that encourages desirable companies to relocate to Ventura
Identifying desirable industries with high paying jobs
Bringing qualifying business owners to Ventura on a personalized tour of the city

Contact your City Councilmember. We need the revenue to offset our growing needs. Demand a plan to attract more business to the area; preferably ones with better than entry-level jobs. Insist the city assist property owners to fill all vacant commercial property. With jobs, revenues will increase. With jobs, crime will decrease. With jobs, Ventura will prosper.

Demand a Plan From City Council To Attract More Businesses with Better Than Entry-Level Jobs to Ventura

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program so you can write directly to that Councilmember.

Neal Andrews, Mayor		Matt LaVere, Deputy Mayor
Cheryl Heitmann		Jim Monahan
Erik Nasarenko		Mike Tracy
Christy Weir

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Is The City Hiding The Truth From You About Brooks Institute?

February 20, 2018/in Newsletters/by VREG Editors

Three things cannot be long hidden: the sun, the moon, and the truth. —Buddha

The City Cuts And Runs On Brooks Institute Debacle

Citizens Short Changed

The folks at City Hall are trying hard to put on a brave and jubilant face in trying to explain why their decision to accept $71,000 to settle a lawsuit against Brooks Institute is a victory. Readers of this letter know better. The settlement does not even cover the rents and security deposit that Brooks was to have paid in the first 6 months of their lease or the future lost rents and property damages.

By our best estimate, there was $61,000 in lost rent Brooks Institute was to pay under the lease for 6 months in 2016. Also there is the $200,000 it will cost in tenant improvements to return the space to leasable condition. Add to that the undisclosed amount the city spent in legal fees and staff time to reach this point, there is well over $261,000 lost in this settlement.

History of Events

The Brooks Institute example is a case study in ineptitude

On March 1, 2016, after meeting with the then Mayor of Ventura and downtown property owners, Brooks executed an office lease for the 4th and 5th floors at 505 Poli Street, behind City Hall. That lease was for a period of 6 months with provisions of four -1 year options to extend.

The contract expressly provides that concurrent with the signing of the lease with Brooks, prior to their taking take possession, had to first pay a security deposit of $10,181.20, first months rent of $10,181.20 and last months rent of $17,390.65, for a total of $37,753.05.

The money was never paid. Yet the City allowed Brooks and their contractors’ access to enter the premises to tear out the offices in the building and start building out their new space. City personnel knew it. Engineering plans and permits were expedited and the work commenced.

It was never completed. Brooks walked away from the project in August, 2016. No rent was paid for July through December, 2016. An additional loss of $61,087.20.

On December 22, 2016, the City Attorney filed a complaint seeking damages for lost rents and security deposit ($84,936), the cost of repairing and restoring the property destroyed by Brooks in starting to perform tenant improvements (according to proof at trial) attorneys fees and punitive damages.

That lawsuit was against Brooks Holdings, LLC., Green Planet Inc., dba GPHomestay, a Massachusetts Corporation, and Xinwie Lin, the primary stockholder of Green Planet. The only person that signed the leases agreement with the City was Edward M. Clift as President of Brooks Holdings, LLC. This company had been formed, one year before, to acquire a bankrupt Brooks Institute of Technology. Nobody else signed any agreements, contracts or guarantees.

Brooks Institute paid no money to the City for rent, no money for a security deposit and no money to restore the tenant improvement their contractor destroyed at 505 Poli.

A Lease “Approved As To Form” by City Attorney

To further compound this enormous error, the written lease agreement did not have any provisions for a performance bond and no performance guarantees signed by Green Planet or Ms. Xinwie Lin. They all orally assured our Mayor, the city staff and the City Council that they were financially sound and would bring a thriving school of higher learning to the community for many years. You know, “trust us”, our word is our bond.

City Attorney Gregory Diaz closes the book on Brooks institute

Those promises and assurances proved false and evaporated after 4 months. City leaders were blinded by glittering opportunity, dollar signs and the prospects that all of this wonderful development would come to the downtown. City leaders were so caught up in this “wonderful idea” that economic reality was ignored.

When the City Attorney, the same person who negotiated this settlement, signs a lease as “Approved As To Form”, does he have a responsibility to ask why the lease didn’t have any guarantees or bonds?

We may never get an accurate reporting of what the damages are in fact. Loss of future rents from other potential tenants, costs of repairing the property and legal costs. We were assured however that “the City is conducting a through process review to determine what caused the delay to collect the amount due from Brooks, and that we (they) will also be developing a better administrative process to prevent this from happening in the future. The City takes this issue seriously and we (they) strive to promote transparency at the highest level”. Now, City Attorney Gregory Diaz tells the Ventura County Star, “This matter is now closed.”

To our knowledge, the city never informed the public of the results of that review process. In fact, no one knows if the city actually performed the review.

The only noble gesture in this entire debacle was the public apology of then City Manager, Mark Watkins, who accepted full responsibility. He has since retired. As for a certain member of the City Council, they were not quite so noble, quickly throwing anyone and everyone under the bus in attempt to divert attention from their foolish folly.

Call for Action

Demand accountability from city officials.

Brooks Institute is a case study in ineptitude. Only this time it’s different. We can hold city officials to their promise. City staff committed to investigate the process thoroughly and make changes. Ask to see the results of that investigation. Ask to look at the changes to the review process the city implemented as a result of that investigation.

Click on any one of the pictures of City Councilmembers below. Your email program will open automatically. Write to your elected officials. Demand to learn what changes the city’s made following the Brooks Institute breakdown. It’s your right as a citizen to know the city is working in your best interest. It’s your right to know how they are changing to prevent it from happening again.

Editors’ Comment

In the private sector, when a so-called “good deal” goes bad for lack of common sense and due diligence people are deservedly fired.. In the public sector there are zero consequences, only platitudes and assurances “that this will never happen again” or “we will strive to promote transparency.”

The City Council directly hires two people, the City Manager and the City Attorney. While the City Manager recently retired/resigned, after the Brooks Institute debacle, the City Attorney should be under greater scrutiny.

Demand To Know What Changes Have Been Made To The Real Estate Process As A Result Of Brooks Institute

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program so you can write directly to that Councilmember.

Neal Andrews, Mayor		Matt LaVere, Deputy Mayor
Cheryl Heitmann		Jim Monahan
Erik Nasarenko		Mike Tracy
Christy Weir

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How To Make The Most Powerful Job In Ventura Government More Accountable.

January 11, 2018/in Newsletters/by VREG Editors

“Those who do not remember the past are condemned to repeat it.”

—George Santayana

Here we go again. Ventura is hiring its fourth City Manager since 2000.

You’ve undoubtedly told our children or grandchildren, “Haste makes waste.” It’s sound advice; especially when you want to prevent them from making a mistake. The same advice holds true for Ventura’s City Council when hiring our next City Manager. A hasty decision now leads to adverse consequences in the future.

The City Manager is the most powerful role in Ventura’s city government. He controls millions of dollars and impacts Ventura for years to come. He does this with little oversight by a part-time City Council. And history shows the Council lacks sound financial judgment when overseeing him. Voters know even less about how the City Manager does his job.

A Chance For The Council To Start Fresh

This City Council faces its most important decision—selecting the next City Manager. It’s no easy task. The new manager will be responsible for healing Ventura after the Thomas Fire. No prior City Manager has faced such a daunting task.

The Council should act slowly, boldly and thoughtfully when hiring. They should think creatively and progressively as they make their selection.

Balancing these goals will not be easy. The Council will feel internal and external pressure to act quickly. They’ll want to fill the vacant position right away to provide leadership at City Hall. And, citizens will demand someone to manage the Thomas Fire recovery. The search firm Ventura hired will add to the external pressure, too. Ventura pays the search firm when the new City Manager accepts the job. Typically, the fee is three months of the City Manager’s starting salary. In this case, it’s $60,500. The search firm will want the City Council to act quickly, so it gets paid.

The Council must resist the urge to succumb to the pressure.

We Know Poor Choices Lead To Financial Disaster

The tenure of the past three city managers keeps getting shorter.

The City Council does a poor job overseeing the City Manager. Former City Manager Rick Cole moved $7.5 million from the Public Liability Fund, Workers’ Compensation Fund and Information Technology Fund to other areas in the budget to make it appear as if the city’s budget was balanced. Either the Council didn’t catch the manipulation or was unwilling to investigate further.

A city manager could confuse the city council in the past.

Former City Manager Donna Landeros reallocated $9 million earmarked for the proposed Convention Center for various city programs, and nobody knows what happened to the money.

And, most recently, retiring City Manager Mark Watkins acted as the chief cheerleader on Measure O. He touted the money was for city services when the truth is it will eventually go towards employees’ pensions.

Even the City Council’s most recent hiring decision costs taxpayers money. The Council erred in the transition to Mark Watkins from Rick Cole. Cole received total salary and benefits of $189,341 along with a housing allowance to move to the city. When Watkins came in, he didn’t need a housing allowance because he already lived in Ventura. Rather than save that money, the Council chose to increase his salary and bonus to $242,059. The $52,718 increase impacts the city’s future financial condition negatively. At the time, Councilmember Christy Weir claimed hiring Mr. Watkins would save the city more money than the rise in his salary. The figures don’t bear that out over the four years he served in the role.

What’s more, Mr. Watkins is to receive his retirement pension based on his highest salary. At 56 years old, Watkins will receive retirement pension based on his $242,059 salary.

Greater Transparency Is The Key

Past City Managers had a bureaucratic background. Some argue requiring bureaucratic experience makes sense. Bureaucrats are the antithesis of transparent, though. They operate out of sight of the voters. This lack of transparency was disastrous for Ventura. Here’s why.

The city manager would be more accountable with published standards of performance.

A bureaucrat measures success by how large a team he manages. He’s driven to increase budgets to protect that organization. A more massive government usually equates to increased regulation. Rarely is that beneficial to citizens.

Also, a bureaucrat that is friendly towards and advocates for the city staff is not impartial. He will be reluctant to reduce expenses, eliminate unnecessary work, redirect work to private entities or minimize long-term staff costs. Bloated staff costs taxpayers money.

Finally, a bureaucrat negotiates his retirement when negotiating for the staff because he participates in the same plan. Human nature being what it is, the City Manager will likely bargain less vigorously, creating a conflict of interest.

Transparency begins with knowing how the City Manager is performing. The city should use Standards of Performance (SOPs) to measure achievement. Currently, the City Manager doesn’t have SOPs listed on its website. The Council should prepare SOPs, and the city should post them for the public to review. What’s more, the City Manager’s accomplishments should be in the public record. Citizens deserve a yardstick to measure if the city is meeting the City Council’s directives.

How to be more transparent when selecting the next City Manager:

Publish the screening criteria the City Council gave to the search firm to select candidates
Reevaluate the job qualifications and look outside of municipal government.
Post the Standards of Performance. Establish measurable performance levels on a regular review schedule.
Establish a Blue-ribbon committee to provide the Council strict salary and bonus guidelines.
Verify a candidate’s financial management expertise. The candidate must provide clear and incontrovertible evidence.
Insist on community outreach success from the candidates. The job description doesn’t list this as one of the primary duties.

Editors’ Comments

Hiring the next City Manager is paramount, and citizen input is a must.

Tell The City Council Not To Act Hastily

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program ready to write directly to that Councilmember.

Let them know what you’re thinking. Tell them what they’re doing right and what they could improve upon. Share your opinion. Not participating in government makes us worse because our city government isn’t working for all of us.

Neal Andrews, Mayor		Matt LaVere, Deputy Mayor
Cheryl Heitmann		Jim Monahan
Erik Nasarenko		Mike Tracy
Christy Weir

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How To Connect To Your 2018 Ventura City Councilmembers

January 2, 2018/in General News/by VREG Editors

To make democracy work, we must be a nation of participants, not simply observers.
—Louis L’Amour

Our federalist system gives us many opportunities to participate in our democracy. Some forms of participation are more common than others. And some citizens participate more than others, but almost everyone has a voice in government.

Meet Your 2018 City Councilmembers

We have a new Ventura City Council for 2018. We have one new Councilmember and six incumbents. Each of them has an email account with the city. Not everyone knows how to contact them, though.

Click On A Councilmembers Photo To Email

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program ready to write directly to that Councilmember.

Let then know what you’re thinking. Tell them what they’re doing right and what they could improve upon. No matter what you write, however, share your opinion. Not participating in government makes us worse because our city government isn’t working for all of us.

Neal Andrews, Mayor		Matt LaVere, Deputy Mayor
Cheryl Heitmann		Jim Monahan
Erik Nasarenko		Mike Tracy
Christy Weir

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The Council Mustn’t Fail The Victims Of The Thomas Fire

December 17, 2017/in Newsletters/by VREG Editors

The Thomas Fire consumed over 400 residences in Ventura

At the December 11th Ventura City Council meeting on the Thomas Fire, there was total cooperation and support of all City departments, County of Ventura, State of California, Cal Fire and every other state and local agency present and committed to protecting our health and welfare. The heroic efforts are endless and stories of individuals, going above and beyond, will follow for weeks, months and maybe years.

At the meeting, the keywords were:

Patience
Understanding
Closure

Hurdles will be:

Things will not happen as quickly we think it should
Air quality
Toxins
Unsafe partial structures

Several stages will take place before the actual rebuilding begins. In the meantime, all city services, police, fire, public works, water, etc., will continue, giving most of us a sense of returning to normalcy.

Firefighters and first-responders performed admirably during the Thomas Fire

We are utterly grateful for the first responders and thoroughly sympathetic to those who have lost so much. This article is about moving forward.

Take Bold Steps Now For the Thomas Fire Victims

Ventura only needs to look at the recent actions in the City of Santa Rosa, to help prepare for the massive undertaking of rebuilding over 500 new homes.

Taken from an interview with the Santa Rosa Mayor:

Santa Rosa Mayor Chris Coursey surveys the damage from fires in October 2017

‘In 90 days I expect the rebuilding process to be well underway, with at least some homes under construction. The Santa Rosa City Council has established what essentially is a “second” planning department to deal specifically with rebuilding, which will smooth and shorten the permit process to get construction underway faster, and speed the inspection process to help builders keep their work moving.’

In Santa Rosa, the mayor was asked: How is red tape being cut to expedite rebuilding?

‘In Santa Rosa, we adopted our “Resilient City” ordinance to issue building permits over the counter, without extensive review, to anyone wanting to rebuild within their home’s prior footprint.
Design review will be limited to a staff determination rather than requiring a public hearing. Second units will be allowed on the property so homeowners can live on site while rebuilding their homes.

‘And as noted earlier, a separate “Resilient City” planning department has been created to specifically deal with rebuild projects, ensuring that firestorm recovery doesn’t have to compete with the day-to-day planning needs of city government.’

For decades, Ventura is infamous in its slowness to approve and issue building permits. The Form-Based Code concept became known as “Ventura, Building One Project at a Time.” Attempts to change this system have been mostly unsuccessful. It has not been a priority.

We have Sacramento to thank for more of the regulatory hurdles that add to this cumbersome and wearisome process. The City of Ventura may not be able to change the regulations and fiats issued by the Sacramento political folks, but we can change the time it takes to review and issue permits.

A Tale of Two Cities

As an example of sending a mixed message, Ventura Community Director Jeff Lambert told a town hall meeting of Keller-Williams realtors:

“We are looking at least six months before construction can begin. If you are planning on rebuilding your home and seeking temporary housing, it would be best to secure a place for at least a year if not 18 months to 2 years if possible. There is no definite timeline at this point, and it would be better to seek a longer lease than a shorter one…”

It is true that Ventura is moving into “untested waters,” but in times of a terrible disaster, business, as usual, is not an option for Local Ventura politics.

We have many experienced and licensed builders, plumbers, electricians and engineers in this City who are qualified to assist in this process.

EDITORS COMMENT

We urge the City Council to immediately:

Modifying and reducing the building permit and fee schedule is a positive step. However, Insurance companies will likely pay building and permit fees. After the rebuild, if the prior resident remains in the house for a year or two, reimbursing those costs may be in order but not as up-front fee elimination.
Require all building plans for single-family homes and related structures to review and permits issued within 90 to 120 days of application.
Allow local Ventura engineers and approved professionals in the construction industry to review and certify that the technical requirements of the uniform building codes have been met, and require city staff to accept these certifications in approving or disapproving plans submitted to building and safety.
Outsource the construction process so qualified professionals may review building plans and to conduct building inspections for better cost efficiency. Hiring more city employees causes long-term costs that are difficult to control and reduce once the projects are resolved.
Contact Santa Rosa city officials to learn from their experience.

Times of crisis require significant measures to address that emergency. The citizens in this community who suffered in this disaster need all the help they can get.

Have An Opinion? Share It With A City Councilmember.

Click on the photo of any Councilmember listed below to email them directly.

Neal Andrews, Mayor		Matt LaVere, Deputy Mayor
Cheryl Heitmann		Jim Monahan
Erik Nasarenko		Mike Tracy
Christy Weir

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