Wednesday, June 23, 2010

Budget & Fairgrounds Deals Approved!

BUDGET DISCUSSIONS ACRIMONIOUS
The first half of Tuesday night's council meeting went about as I expected. There was much acrimonious debate among some of the council members - Katrina Foley and Eric Bever were the main combatants - on how to vote on budget issues.

FOLEY NIBBLED AWAY
Foley tried, with only minimal success, to salvage a few dollars here and there in a budget with a $16 million dollar shortfall. Eventually the council voted 4-1, with Foley voting no, to approve the budget presented to them with a few modifications.

TOT ON THE NOVEMBER BALLOT
They also voted to place an increase in the Transient Occupancy Tax (TOT) on the November ballot. City Manager Allan Roeder suggested that a minimum 3% increase be considered. Instead, at Councilman Gary Monahan's suggestion, they approved placing a 2% increase on the ballot. At that point Costa Mesa will still be well below the county median, with virtually no realistic opportunity to go back after more in the near future. It's just another short-sighted move by the council - just like the many others in the past that have contributed to the giant fiscal hole we find ourselves in today.

OTHER REVENUE SOURCES TO BE EXAMINED
The council also directed the staff to return with specific proposals for increases in a few other areas.

FUND BALANCE TAPPED AGAIN
The budget as approved remains well short of being balanced so it forces the utilization of the diminished fund balance to make the numbers work. You may recall that, over the past three years, we've drawn down those reserves by $35 million! The exact amount necessary to be used is unclear... more to follow when I get a number.

FAIRGROUNDS SALE UP NEXT
The second half of the evening was dedicated to the meeting of the Orange County Fairgrounds Authority (OCFA), the joint powers authority formed by the City for the express purpose of purchasing the Fairgrounds from the State. So, the council members figuratively slipped into their Farmer John coveralls and became "authority members".

ROEDER - "MUST HAVE A DECISION TONIGHT"
Roeder, who functions as the Executive Director of this organization, brought the full council (authority board) up to speed on the timetable. He told them and the audience that a vote MUST be taken tonight on the purchase agreement and the memorandum of understanding with Facilities Management West because the State is prepared to place the Fairgrounds back on the block today, Wednesday, if the authority doesn't get a deal done tonight. He told us that the City had missed two recent deadlines imposed by the State last week and that we were at the end of our rope.

MOVED TO CLOSED SESSION
After re-affirming the bylaws, they went into a closed session to be briefed by the negotiators. That closed session lasted 90 minutes.

BARLOW GAVE OVERVIEW OF DOCUMENTS
Once the meeting was re-convened City Attorney Kim Barlow gave a brief overview of both documents - the purchase agreement and MOU.


MANSOOR STEPPED IN IT
Then my jaw dropped as a haggard-looking Allan Mansoor, as chair of the authority, proceeded to chastise members of the Facilities Management West team for what "he had been told" was disrespectful behavior on the part of lawyers from FMW during negotiations! Funny, I thought those negotiations were confidential! Who told him? When? Regardless, he flustered Richard Dick - who was a stand-in spokesman for FMW - with questions about the deal that had been negotiated which so angered Kenneth Fait, the top dog at FMW, that he rushed to the podium and, in a very heated comment stream, told Mansoor that the deal we have is the best we're going to get. He wasn't going to offer a single penny more! I thought for sure Mansoor had blown this deal at that point.

MOST SPEAKERS DECRIED LACK OF TRANSPARENCY
Speaker after speaker stood and expressed consternation with what most described as a lack of transparency. The expressed concern about the deal itself and the fact that the City seemed to have given up control.


COSTA MESA DID THE "IMPOSSIBLE"

The pace of this process will almost certainly be the subject of a book one day. I doubt that anyone north of Bakersfield thought Costa Mesa could pull this off with the land mines placed in front of it. And still, the process continued at breakneck speed.

FINAL APPROVAL WEDNESDAY MORNING
At the end of the day, which turned out to be 12:10 a.m. Wednesday morning, the Orange County Fairgrounds Authority board voted unanimously to approve the sale agreement with the State and then, after much discussion, voted 4-1 to approve the MOU with Facilities Management West. Foley voted no, and explained her concerns at length before the vote was made. She said what others had said earlier in the evening - that this 55 year agreement needed to be like a marriage, but it just didn't feel right.

DEAL DONE
So, the deal is done. In a few hours the State will have in front of them the necessary paperwork to officially launch the escrow and the clock ticks at their end now.

LATINO CAUCUS THREAT PENDING
The elephant in the room at this point is the threat by the Latino caucus that, because of Mayor Mansoor's "Rule of Law City" resolution, they will block the legislation required for this deal to be finalized. I guess we'll find out about that soon enough.


NOT MUCH JOY TONIGHT

At the end of the day, in my opinion, both major issues addressed by the city council tonight - the budget and the Fairgrounds - ended up with not very many people leaving the auditorium happy. I suspect the Facilities Management West folks were pleased, but not happy. This will be a night to remember in the history of our city.

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2 Comments:

Anonymous Rapier Wit said...

To paraphrase someone, the greatest trick the Devil ever played was convincing the world that he did not exist.

I think that is the case here. One has to ask, What is Facilities Management West getting out of the deal?

From the MOU, it looks like they are paying through the nose for an asset they do not own and has so many restrictions placed upon the usage that they cannot maximize revenue.

How, under these terms are they really going to extract an unprecedented amount of money out of the property? And make any profit?

Or is that the point? What is the card up their sleeve? Is this just a waiting game until they can ultimately control the property?

And of course, there is the complete lack of transparency. The OCFA meets once a year?

Reminds me of another quote but the illustrious Johnny Rotten: "Ever feel like you've been cheated?"

Yes, John, I do.

6/23/2010 05:39:00 AM  
Anonymous Gail said...

Hear ye, hear ye.

The fox has now officially entered the hen house!

God help Costa Mesa.

6/23/2010 08:00:00 AM  

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