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Ventura's water shortage

Ventura’s Water Supply Jeopardized by Years of Mistakes

Whiskey is for drinking. Water is for fighting. —Mark Twain

Ventura could lose one-third of its water supply because of legal maneuvering and backdoor negotiating. As it is, Venturans pay too much for water and could pay even more in three years.

CITY COUNCIL APPROVES WATER RIGHTS CONTRACT

[RESULTS OF NEW AGREEMENT]

Casitas Water District

Casitas Water District negotiated a favorable water contract with Ventura after threatening a lawsuit.

On May 8, 2017, the public learned that a new contract between the City of Ventura and the Casitas Municipal Water District has been approved and executed by the City Council. That new contract places Ventura in jeopardy of losing all rights to water from Lake Casitas.

To maintain its current water rights, Ventura must reach Water Balance by 2020. To achieve water balance, Ventura must find an additional source of water.

The expedient solution is to exercise Ventura’s option to use State Water. The city currently pays $1.2 million per year for that option (which the city never used) and has been paying for that option since the mid-70s. If Ventura does not tap into the State Water Pipeline within three years, Ventura’s water situation will be in dire straits.

NEW CONTRACT IS TOO VAGUE

The old 1995 Contract with Casitas Water allowed for 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. Under the new agreement, that changed.

The new contract does not specify the amount of water Ventura’s entitled to receive. Instead, the “projected water demand of the prior year” will determine the amount (Article 4.1). That projected demand will come from Ventura’s annual water report. Should Casitas dispute the amount of water, it opens the Ventura up to a possible “Dispute Resolution.”

What determines the projected water demand of the prior year? Who determines that amount? Do both Ventura Water and Casitas Water have to agree on the volume before the start of each year? There are too many unanswered questions for this agreement to be tenable, and the fact that the Ventura Water Commission recently “received” but did not approve the 2017 report is not encouraging.

NO SCIENCE IN THE COMPREHENSIVE WATER REPORT

Ventura water

Ventura Water provides no accurate estimate of available water in the Comprehensive Water Resources Report.

The Ventura Water Department provided inaccurate and incomplete information in the Comprehensive Water Resources Report dated April 7, 2017. That data formed the basis of the Contract with Casitas Water District.

The financial statements used are suspect because of misleading expenditures. Other assumptions such as using the average water demand are questionable, too. The report includes no real science-based estimates of current water availability or capacity. And there are no timelines for water delivery improvements.

This same report also lists the use of sewer recycled water as a reliable source for potable water in the city. Ventura Water’s General Manager authored that report. She subsequently quit her job and moved to the City of Angels after submitting the report.

THE NEW AGREEMENT PUTS EAST VENTURA AT A DISADVANTAGE

ventura water

East Ventura could lose 1/3 of its water in 2020.

The 1995 Contract allowed Ventura to blend Casitas water with the East End water. Water from the lake was used to mix with water from eastern wells to achieve better quality. Casitas considered the use of their water for that purpose as “rental water.” Ventura was required to return it or to pay for it. The new contract does not allow Ventura to use water in the East End.

Ventura may only use Casitas water within the Casitas District (western part of the City). If Ventura uses Casitas water outside the Casitas District in any one year, then Ventura must reduce the amount of water it uses in the western part of the city until it achieves “water balance.”

If Ventura fails to reach Water Balance within a 12-month period, Casitas may terminate the Water Services Agreement. Overnight, Ventura would lose approximately one-third of the water needed to run the city. Those living on the East side will suffer the most from the loss.

WATER PRICES NEEDLESSLY OVERPRICED

Based upon a very reliable source, who worked in the water community for the last four decades, management decisions by Ventura Water and City Hall over the past 25 years have led to monetary, clerical and water rights losses in the Ventura River. These bad choices forced consumers to pay higher fees even under drought conditions than they should have incurred.

THE CITY COUNCIL SNUBBED THE WATER COMMISSION

Ventura Water

Ventura City Council didn’t seek the counsel of the Water Commission.

While we know the Ventura Water Commission does not have any rights or authority regarding contracts, their experience and knowledge could have been invaluable. But, the City of Ventura Water Commission never had the opportunity to review or discuss the Casitas Water Agreement. The City of Ventura never presented this contract to the commission and didn’t ask for their counsel.

Neutering the Water Commission is a recurring behavior for Ventura Water. The staff’s unwillingness to allow the Commission to do its job has existed for years. It appears they would prefer the Commission to rubber-stamp every decision. They are perturbed when the commission doesn’t do what they want. Given the poor decisions Ventura Water has made during the previous general manager’s tenure, it’s little wonder commissioners might be critical of every issue brought to them.

THE THREAT OF A LAWSUIT EXCLUDED THE WATER COMMISSION

Casitas Municipal Water District intended to sue Ventura’s water department and notified them of their intention according to the City Attorney.   At that point, the attorneys determined that they would treat the new agreement as a pre-legal settlement, thereby closing negotiations to outside parties and masking all records or documents from public scrutiny.

Editors’ Comments

Ventura Water

Casitas Water District could end up owning Ventura’s water rights for $2 million.

As part of the new contract, Casitas forgave an estimated $2 million debt (based upon 4000+ acre feet of water) Ventura Water owes for “rental water.” The Parties agree that as of the commencement of the Agreement, the City is in “water balance.” The City and Casitas are not subject any further legal or financial obligations under the 1995 agreement.

The success of this contract depends on whether Ventura can achieve water balance by 2020 by finding an alternative source of potable water. If that does not happen, Ventura faces the prospect of the termination of water from Casitas Water District.

If Ventura doesn’t find an alternative potable water source within three years and Casitas terminates this agreement, in effect Ventura will have sold its rights to Casitas Water for $2 million.

Ventura can only hope that the new Water Department management will provide full disclosure and transparency, and will lend its voice to the importation of 10,000-acre feet of water from the State Water Project. Forty-eight percent of the voters chose that option in the 1992 election.

Now, will the government listen?

Ventura spends tax money

You Have Reasons To Be Concerned How Ventura Spends Your Tax Money

“Few things are harder to put up with than the annoyance of a good example”—Mark Twain

Complaining about how Ventura spends our tax money is like complaining about the weather. Everyone talks about it, but nobody does anything about it.

When Ventura spends money on projects, you trust and hope city officials would spend it as though it was coming out of their own pockets. However, many believe that City officials view tax revenue as an endless faucet spewing out money.

So, we rely on our elected officials to oversee the expenditures and question them when necessary. The following example illustrates how dysfunctional the oversight has become.

There Is No One Paying Attention To The Details

The City of Ventura Finance Committee considered a “small-dollar” expenditure at a recent meeting. Councilmember Christy Weir chairs the committee. Councilmember Cheryl Heitmann is the committee’s vice-chair. Deputy Mayor Neal Andrews also serves. Their job is to provide oversight to the city’s Director of Finance, Gil Garcia, and his staff in the Finance Department. Here is where the dysfunction begins.

Ventura spends tax money carelessly

The Finance Department wanted to spend $29,600 per year on outsourcing the opening of payment envelopes and processing of water bills.   This dollar amount fell within Mr. Garcia’s spending authority and did not need the three City Councilmembers’ approval. He presented the item for discussion nonetheless.

Currently, Ventura Water sends water bills every two months and when payment is made city personnel open the envelopes and process the payments through the bank. The City now wants to send out water bills monthly. Since Ventura will change to monthly billing, the outsourcing costs would double to $59,200.

The city’s finance staff justified outsourcing this service to purportedly to improve cash flow and increase efficiency. The staff did not discuss or offer any evidence on just how they would be more efficient if their proposal were adopted.

Where’s The Oversight?

Only two City Councilmembers attended the committee meeting.  Councilwoman Heitmann was absent. Neither Councilwoman Weir nor Councilman Andrews asked how much Ventura would save in real dollars by paying an outside company to perform this task, or how the city would adjust or reduce staffing after the change.  The presenters assumed that handling thousands of checks and running them through the city’s bank account apparently would save money and reduce staff time.

City employees don't care how Ventura spends tax money

A citizen attending the meeting spoke up and asked how much money we would save and how many staff people would be reduced or redeployed. The initial reply was the cost savings would be “minuscule.” When pressed to define what she meant by minuscule, the staff member was unprepared to provide any numbers. When pressed about changes in staffing, the answer was “none.”

Worrisome Questions Arise

That should cause every tax payer in this city to express concerns about the issues surrounding this spending proposal and by extension any plans to spend tax money regardless of the amount:

  1. Why would any staff member ask for $29,600 per year and not support the request with time and cost savings? If this were a private business, the owner would insist on knowing. Shouldn’t we expect the same of our government?
  2. Why didn’t the City Council members ask the hard questions about time and cost savings? Their job is to oversee the city finances.
  3. If the city wasn’t planning to reduce staff, what would these staff people do instead of opening envelopes and processing payments? How would they be more productive in their new duties than they currently are
  4. If $29,200 is within Mr. Garcia’s spending authority, why wouldn’t he know the cost and productivity savings?
  5. While this item was within Mr. Garcia’s authorization and did not need to come to the Financed Committees’ attention, it was commendable that he brought the new procedure to the Committee’s attention. However, it also requires having all the available facts to support the decision. Therefore, why was neither Mr. Garcia nor his staff prepared to justify the reason for the change?

After all, with authority comes responsibility. It is not a blind trust. Maybe Ventura needs to review the policy for decisions made within a manager’s authority. All such decisions must be reviewed and supported by documentation.

You may be asking, “Why so focused on one instance such as this?” After all, it’s a small expense. It’s only $29,600 today. But soon, it’s going to double to $59,200. We must remind ourselves of Benjamin Franklin’s admonition — “Watch the pennies, and the dollars will take care of themselves.”

“Watch the pennies, and the dollars will take care of themselves”

In this case $29,600 doubles within the year. No City Councilmember noted or questioned the expense. Why?  Is it that our elected City Council members have become complacent?  They trust staff recommendations unquestionably?  They view this as so trivial it is not worth their time or effort? Or, are they no longer concerned about how they spend our tax dollars?

Editors’ Comment

Ventura spends like a faucetNo matter what the reason is, the City Council has to stop looking at taxpayers as an endless faucet from which money flows. It’s time they started spending our tax money as if it was coming out of their own pockets, not some faceless person.

When the costs in pennies turn to dollars then turn to thousands then turn to millions, and they run short again, who do YOU think they will look to for more money?

Concerned By This? Write A Councilmember.

Click on the photo of a Councilmember to send him or her a direct email.

Erik Nasarenko,
Mayor

Neal Andrews,
Deputy Mayor

Cheryl Heitmann

Matt LaVere, Ventura City Council

Matt LaVere

Jim Monahan

Mike Tracy

Christy Weir

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Politicians Expect You To Pay A Little Bit More

The Ventura County Star reports on Ventura’s Pension situation and mentions VREG.

The Ventura County Star Mentions VREG

We’re proud the Ventura County Star mentioned us in an article on pensions. The Star article lists VREG as a watchdog group.

Click here to go to the article.

We believe pensions and unfunded liabilities are ticking time bombs for the city. The Star joins us in pointing this out to Ventura citizens.

In Ventura’s budget starting July 1, the city will pay CalPERS almost $11 million. That’s the amount Ventura owes in unfunded liability. CalPERS projects that to at least double five years later, to over $22 million. That doesn’t include normal, ongoing costs.

That increase almost equals the revenue the half-cent sales tax will generate. The City Council supported the tax to pay for needs other than pensions. Taxpayers believed it was for infrastructure, public safety, homeless services, water quality and other priorities.

Taxpayer and watchdog groups accuse city leaders of misleading the voters. They knew Ventura needed the revenue to offset growing retirement costs.

The Star writes, “Venturans for Responsible and Efficient Government has made similar claims.”

How Bad The Situation Is Depends On Who You Talk To

City Finance Director, Gilbert Garcia, disagrees. He says the city will separate new sales tax revenue from the General Fund. It will be overseen by a soon-to-be-created citizen oversight board.

The state will pay money from Measure O to Ventura beginning in April. The oversight committee is not formed yet. That means no citizens won’t know if the money is separate until months after the fact. The city has had since November 9, 2016 to organize the citizens’ oversight committee. Yet, four months later citizens don’t have any safeguards in place.

The article notes. “How dire the situation is—or isn’t—depends on who you talk to.”

The article notes. “How dire the situation is—or isn’t—depends on who you talk to.” How true.

The Ventura County Star reports on the burden city employee pensions are placing on City Hall.

If you ask a public employee they think the whole thing is way overblown and there is no problem. The public employee does not care that they impose a real burden on their neighbors. They have theirs. They worked for those benefits.  The taxpayers owe them.

The Council members give the public employees what they want. They give little regard to the economic consequences on the rest of the citizens. It’s the hard working men and women who they will always expect to  “pay a little bit more.”

IF THIS UPSETS YOU, WRITE YOUR COUNCILMEMBER

Click on the photo of a Councilmember to send him or her a direct email.

Erik Nasarenko,
Mayor

Neal Andrews,
Deputy Mayor

Cheryl Heitmann

Matt LaVere, Ventura City Council

Matt LaVere

Jim Monahan

Mike Tracy

Christy Weir

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three unaddresed issue

Unaddressed Issues That Threaten Ventura’s Quality Of Life

overcoming unaddressed issue

Three unaddressed issues will be difficult to overcome.

VREG’s STATE OF THE CITY

[THE UNADDRESSED ISSUES MAYOR NASARENKO NEGLECTED TO DISCUSS]

No doubt that Ventura is a magnificent place to call home. On many aspects, VREG agrees on more points with our Mayor and City Council, than disagree. Ventura’s citizens are proud of our fine police force and our fire department. Our city employees are a dedicated group of men and women, who work hard and serve the community well.

THREE UNADDRESSED ISSUES

Some issues Mayor Nasarenko highlighted in his State-of-the-City speech are ones VREG has written about for years. Ventura has several issues that need attention before they grow out of control.

Mayor Nasarenko identified water and pensions among those issues in the State-of-the-City. The impending Brooks Institute lawsuit was conveniently overlooked. The mayor was short on details on how to solve them.

WATER: UNADDRESSED ISSUE #1

overcoming unaddressed issue

Water has been an unaddressed issue for over 37 years.

For 150 years, Ventura has failed to find an alternative source for water. In fact, with the loss of the Ventura River water wells, there are fewer resources. In 1972, Ventura opted to import 10,000 acre feet of water from the north. Ventura has paid and continues to pay for that every year without any pipeline with which to receive it. In 1989, the community faced a drought, and 52% elected to pursue desalinization. 48% chose to build a pipeline as an alternative. For the last 26 years, nothing has happened.

Now, with another 7-year drought which may be ending, a recent editorial in the Ventura County Star on the water crisis states:

“The department’s poor handling of Ventura’s water has created an avoidable “perfect storm.

“The loss of Lake Casitas water will force it to adapt cross-town pipelines and start pumping east-side water to the west side to meet demand. Continued implementation of the horribly timed housing boom on the east side will further exacerbate water shortages and leave residents with high-priced/low-quality water and not enough of it.

“Meanwhile, the city is frantically trying to dig replacement wells rather than moving ahead with new ones, and consumers’ water bills will go even higher to offset that cost.”

In January, the Ventura City Council authorized a $430,976 study (or as low as $297,176 depending upon the results of the engineering study) to research the cost to connect to the State Water Project. The State Water Project that has existed for 46 years. Yet, Ventura cannot use it without extra infrastructure.

CITY COUNCIL NOT CONSIDERING ALL AVAILABLE OPTIONS

Our Mayor has also shared that Ventura is looking at potential sites for a water reuse plant. Dubbed the Ventura Water Pure, the plant is an advanced treatment facility. It will take 8 years to build the treatment facility. Projected costs range between $120 million and $142 million.

Water from this treatment facility could cost less than state water and would be more reliable. It is also about half the cost of energy-intensive desalinated water. From the start, such a plant could yield about one fourth of the city’s current annual water demand. According to our Mayor, the plant could later expand to meet future supply needs of Ventura.

One advantage of connecting to the State Water Project is that it will not take 8 years like the Ventura Water Pure plant will require.

Is there another water rate increase in the offering?

PENSIONS: UNADDRESSED ISSUE #2

overcoming unaddressed issue

Pensions are an unaddressed issue Ventura struggles with.

CalPERS annual billing for pensions is rising faster than employee contributions. As a result, the city continues to lose ground on employee pensions. The city’s annual cost of $16 million is projected to be $25 million by 2023. Ventura’s CalPERS payments are rising at over $1 million per year. Because CalPERS lowered its rate of return to 7% from 7.5%, add another $750,000 to the $1 million annually.

While our Mayor acknowledges the problem, he offers no solutions.

BROOKS INSTITUTE LAWSUIT: UNADDRESSED ISSUE #3

In August 2016, VREG concluded a lawsuit over Brooks Institute was inevitable. The lawsuit will come at taxpayer expense. The City Council and the City Manager downplayed the possibility at the time. This may have been an attempt to deflect the seriousness of the problem.

Fast forward to Feb. 8, 2017, one week before the Mayor’s State of the City. Ventura is now suing Brooks.

Editors’ Comments:

City government tries its best to serve our citizens.  Like any community, there are also areas that either need improvement or simply require attention before big troubles get out of control. This is a collective reminder that we, as a community, through our elected officials, still have work to do in vital areas in order to sustain our way of life.

THINK VENTURA SHOULD TACKLE AT LEAST ONE UNADDRESSED ISSUE?

[WRITE YOUR COUNCILMEMBER]

Click on the photo of a Councilmember to send him or her a direct email.

Erik Nasarenko,
Mayor

Neal Andrews,
Deputy Mayor

Cheryl Heitmann

Matt LaVere, Ventura City Council

Matt LaVere

Jim Monahan

Mike Tracy

Christy Weir

Editors:

R. Alviani          K. Corse          T. Cook         B. Frank
J. Tingstrom    R. McCord       S. Doll          C. Kistner

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2017 Ventura City Councilmembers

How To Contact Your 2017 Ventura City Councilmembers

Louis L'Amour

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 2017 City Councilmembers

We have a new Ventura City Council for 2017. 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.

Erik Nasarenko,
Mayor

Neal Andrews,
Deputy Mayor

Cheryl Heitmann

Matt LaVere, Ventura City Council

Matt LaVere

Jim Monahan

Mike Tracy

Christy Weir

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

CalPERS sticks Ventura with extra unfunded pension liabilities

The Looming Catastrophe of Unfunded Pension Liabilities in Ventura

“IT ISN’T WHAT WE DON’T KNOW THAT GIVES US TROUBLE, IT’S WHAT WE KNOW THAT AIN’T SO”
—Will Rodgers

NEGLECTING THE UNFUNDED PENSION CRISIS DOESN’T MAKE IT DISAPPEAR

For eight years Ventura has done little to remedy the unfunded pension liability. During that time, there have been three different City Councils. Yet they made only a modest effort to solve the problem. They got employees to agree to contribute toward their own retirement. Meanwhile, those same City Councils have exacerbated the problem. They granted large raises to public safety and SEIU employees. This is a case of ‘too little, too late’.

Eight years ago, we pointed out the amount of pension benefits Ventura owed. We owe these benefits to retired city employees and those about to retire. We owed $150,000,000 of unfunded liability. Two major pension plans account for the entire liability—Public Safety and Miscellaneous.  The Public Safety pension plan covers police and fire retirees.  The Miscellaneous pension plan covers all other employees.

The Ventura County Star reported the deplorable condition of Ventura’s pension plans. And, the Grand Jury labeled the plans as “out of control.”

The office of the City Manager tells us that they have everything under control. And, in 5 years things will level out. There are no records or calculations offered to support that statement.

STILL LIVING FAR BEYOND OUR MEANS

CalPERS increases unfunded pension liability costs to Ventura

CalPERS sticks Ventura with rising unfunded pension liability costs.

The problem is simple. Ventura has not set aside enough money to pay for future benefits to city employees when they retire. What’s more, the California Pension System (CalPERS) let Ventura down. It did not earn enough return on investment on the money Ventura paid into the fund.

Since 2008, the situation has gotten far worse. In the last CalPERS report published in 2016, the city’s unfunded liability totaled $169,292,212. In other words, the liability we owe grew 12.9% in eight years.

ONE CITIZEN’S ANALYSIS

The City Manager and City Council knew of this UAL increase before they campaigned for Measure O.

Proceeds from Measure O will be more than $11 million a year for the next 25 years. It may not be enough to cover the debt, though.

CalPERS recently published the projected pension costs for the City of Ventura. Taxpayers are 100 percent responsible for paying these foreseeable costs.

The CalPERS Circular Letter Dated January 19, 2017 contained these facts:

CalPERS lowers its rate of return on investments to 7% impacting Ventura’s unfunded pension liabilities.

The CalPERS Board of Administration approved lowering the CalPERS discount rate on December 21, 2016.

The long-term rate of return will now be 7.00 percent over the next three years. This will increase public agency employer contribution costs beginning in Fiscal Year 2018-19.

For the years 2017 to 2023, CalPERS actuary reports show increases to the annual Unamortized Actuarial Liability (UAL). These costs will increase 91 percent or $8.8 million.

In the CalPERS Circular Letter dated 1/19/17,  the assumed return rate decreased to 7 percent from 7.5 percent. Ventura will pay an extra $3.7 million from FY 2016-17 to FY 2022-23.

Combined, the city’s annual UAL cost will increase $12.5 million to $22.2 million over the next six years.

No other expense or revenue (tax) item will increase that fast. Left unaddressed, these increased costs may force the city to curtail basic services.

EDITORS’ COMMENTS: 

Increasing revenue or reducing expenses solves most budget problems. For Ventura, increasing revenue means more sales taxes and property taxes. And reducing expenses means service cut backs or layoffs.

Increasing revenues and cutting expenses seems like the obvious fix. Yet, a less popular third option is available. The employees must contribute more toward their own retirement. After all, they will benefit the most from these pensions.

Ventura’s long-term solution will be a combination of all three choices. Increasing revenues and reducing expenses with higher employee contributions is the right prescription.

FEEL STRONGLY ABOUT THIS? WRITE YOUR COUNCILMEMBER.

Click on the photo of a Councilmember to send him or her a direct email.

Erik Nasarenko,
Mayor

Neal Andrews,
Deputy Mayor

Cheryl Heitmann

Matt LaVere, Ventura City Council

Matt LaVere

Jim Monahan

Mike Tracy

Christy Weir

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

Will The Trade Desk be another real estate blunder?

Is Ventura Poised To Commit Another Real Estate Blunder With The Trade Desk?

“ONLY THE MEDIOCRE ARE ALWAYS AT THEIR BEST”
—Jean Giroudoux

WILL VENTURA CITY GOVERNMENT EVER LEARN?

It’s déjâ vu all over again. Once again the past rears its ugly head. Only this time will the City Council be wise

The Trade Desk may not be the best deal for texpayers

Is The Trade Desk real estate deal a gift of taxpayer money to a private company?

enough to learn from its past mistakes? There are some things this Council and this city staff are not qualified to evaluate fully.

Among the first issues facing the 2017 Ventura City Council is a real estate transaction. Ventura is selling four parcels of  City-owned, prime downtown public property. The properties for sale are at 535 East Main Street.

The fact that the City is pursuing the sale of surplus land is commendable. Selling these properties should be open and transparent. To do otherwise, invites the possible perception of favoritism or mismanagement of public funds. Proper evaluations, bidding and screening needs to happen.

CITY STAFF PROPOSES A NEW DEAL 

Community Development Director, Jeff Lambert, presented a new real estate deal on November 15, 2016. He asked the City Council to approve the sale of a large, downtown city parking lot. The proposed buyer is a company called The Trade Desk. The Trade Desk wants to build a headquarters office building. The proposed offer was $1 million ($24 dollars a square foot).

City staff steered the selection of The Trade Desk as the sole qualified bidder. The City Council depended upon the recommendations of City Staff.

Four months earlier, the City Council relied on city staff’s recommendations on another deal. The city staff did an incomplete analysis before recommending the Brooks Institute project. They compounded this mistake by failing to collect deposits and rent. The Brooks Institute deal fell apart.

This time, the City Council was close to selecting The Trade Desk in another real estate deal. They almost decided without benefit of an independent financial analysis or a professional appraisal.

WHY THE TRADE DESK?

The Trade Desk is a Ventura success story. Does that entitle the company to favorable treatment from city government?

The Trade Desk is a success story many citizens do not know about. The City of Ventura funded an incubator business startup program. They used $5 million of taxpayer’s dollars to seed the fund. The Trade Desk was a beneficiary of the subsidized program. The Trade Desk is a large tech company that brought new jobs to Ventura. The company achieved early success. With their success, the Trade Desk went public and the stockholders have made millions. A true success story for Ventura.

The Trade Desk wants to enjoy the city’s largess, again. This time, they want to buy city property for their headquarters at below fair market value. Their business success should not cloud City Hall’s judgment. City Hall should not sell public property at a discounted price.

DOES THIS DEAL PASS THE SMELL TEST?

A first whiff of impropriety surfaced during the election. The Trade Desk donated $7,000 to support the successful city-backed ½¢ sales tax measure.

Another whiff arises with regards to the questions the city asked to approve The Trade Desk. A close examination of the specific judging criteria reveals the questions were subjective.

Of the three bids submitted, city staff selected The Trade Desk as the most qualified bidder. In its proposal, The Trade Desk offered $1,000,000 in cash for the properties.

The city purchased the properties for $618,000 in 1997. The city valued the properties at $1,684,000 in the original proposal. They base their estimate on a 6 year old value (10/25/10) comparable price for a city parking lot. The city’s valuation is $40 per square foot.

A QUESTION FROM THE AUDIENCE SLOWED DOWN THE PROCESS

The third impression of impropriety is how much the city valued the property. The city valued the property at $40 per square foot based on a 6-year old comparable property. In the same council meeting, city staff urged the Council to buy another parking lot for $64 per square foot. City staff recommended buying the parking lot for $64 per square foot. This established a new comparable price.  The new comp values the parcels at 535 East Main Street at more than $1,684,000.

The City Council seemed oblivious to the conflicting valuations. A citizen in the audience brought it to the Council’s attention. Only then did the City Council call for an independent appraisal.

It’s a mistake to sell The Trade Desk these downtown lots for $1 million, when the true value is closer to $2 million.

GIFT OF PUBLIC FUNDS?

You decide if The Trade Desk real estate deal is in Ventura’s best interest.

The city staff recommended to City Council to sell the property at a price below market value. This is another real estate blunder the staff made in 2016. In essence, it would be a gift of public money through the sale of property for less than market value. The sale would enrich The Trade Desk’s shareholders on the back of Ventura’s taxpayers.

The final whiff of impropriety appeared in the handling of the finances. Ventura city staff was willing to accept $50,000 in escrow from The Trade Desk. The Trade Desk estimates it will spend $15 million to develop the property. The deposit works out to 0.3% of the total value of the project. Such a small deposit amount should have concerned city staff.  One would think they would have learned from their prior mistakes. Not accepting an adequate deposit was a pitfall in the Brooks Institute situation.

EDITORS COMMENT

MOVING FORWARD RECOMMENDATIONS

Negotiations continue with The Trade Desk. Yet, the openness and transparency of this transaction remains in question.

To avoid any appearance of impropriety, Ventura should request new proposals for the property. The city must get an appraisal by an independent, certified commercial real estate appraiser. The sale price must be equal or higher than the appraised value. The city must make new bids public. And the final offer must generate a better return to Ventura’s citizens.

The successful bidder should make  a good faith, earnest deposit. In the event the transaction doesn’t move forward, a deposit protects Ventura’s citizens. The deposit would cover any loss of value or cost to return the property to its current state.          

Editors:

R. Alviani          K. Corse          T. Cook         B. Frank
J. Tingstrom    R. McCord       S. Doll          C. Kistner

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Ventura's Measure O Is Unenforceable

Oversight Of Measure O Is Untenable in Ventura

ELECTION AFTERMATH

Measure O passed in Ventura. Now, the hard part.

Measure O passed in Ventura. Now, comes the hard part: oversight.

2016 was a fascinating and challenging election year at all levels of government.  The City of Ventura was no exception.  Voters elected a new City Council Member and passed two City Charter amendments. Most remarkable of all, Ventura voters approved an increase in the sales tax. This will impact Ventura for 25 years.

The city staff and City Council promoted an extra 1/2 percent sales tax. The increase will raise another $10.8 million per year. That amounts to $270 million for city services over the next 25 years.

THE OVERSIGHT OF A NEW TAX IS UNTENABLE

The final vote count was 28,987 yes and 20,359 no votes. Measure O promises all voters strict oversight of the new money. Measure O mandates: 1) strict accountability 2) a citizens’ oversight committee 3) annual independent financial audits and 4) a public review of expenditures. Yet, the city hasn’t revealed its plan to put this strict oversight in place. 

Cheryl Heitmann, Ventura City Council

Ventura Councilmember Cheryl Heitmann

A lack of plan contradicts one councilwoman’s official position. She stated that her reelection was a signal from the voters. She believes voters think the City Council was spending the taxpayer’s money wisely. The 20,359 citizens that remember the Brooks Institute failure might disagree.

A LONG HISTORY OF BROKEN PROMISES IN VENTURA

Ventura citizens must hold City Government to its word.  Promises are sometimes forgotten or even ignored when it comes to money.  One example happened in 1991—26 years ago . City government promised to reduce water and waste water rates after the drought. The water and waste water rate increases they imposed were temporary. The drought ended. The rates never returned to their previous levels before the drought began. Once they got your money, the promises evaporated.It was also 26 years ago that our city promised desalination as a new water source, if voter approved.  Venturans approve the city’s call for desalination, but nothing happened.  Yet, Venturans still pay for State water rights because of the city’s nonfeasance.

Ventura lacks accountability in city government

Brooks Institute exposed the cracks in the city’s procedures.

Ten months ago, the city promised economic vitality when Brooks Institute moved downtown. Brooks Institute filed for bankruptcy. The project failed.  The City Council and the city staff pointed fingers at each other for that debacle. There was plenty of blame to go around, though.   The staff failed the Council by not performing its duties completely. The Council failed to ask the right questions before approving Brooks’ long term lease.

Afterwards, some City Council members reached a difficult conclusion. They realized the city staff lacks the expertise to assess complex real estate opportunities.

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Measure O passes

Congratulations On Measure O Passing! Now Let’s See You Do Something With It.

Yes on Measure O

Measure O proponents used yard signs like this to turn out the vote.

We congratulate the voters and the City Council on Measure O passing.

Many people voted against this measure.  That opposition was never about the extra tax money that could benefit our City. Instead, it was about the lack of trust in how this government would spend the money.

Citizens’ Oversight Committee Promised

Our opposition forced the proponents to promise that a citizens’ committee would oversee how the city spends this money.

Will city government keep that promise? Will the candidates keep their promise? Or, will the money flow toward the special interests that spent so much to get you to approve this new tax?

We’ll Monitor Measure O Closely For You

18,581 vote against Measure O

18,581 citizens voted against Measure O. Nonetheless, it passes.

Proponents promised clear accountability for how city officials spend the money.

We promise we will try to insure the city spends the money as it promised. The 18,581 people that voted against the measure deserve to know that much.

 

 

 

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