Eye on Sacramento Issues Report Challenging Sacramento Convention Center Expansion

MEDIA RELEASE

For Immediate Release

Date/Time: October 17, 2016, 10:30 a.m.
Contact: Dennis Neufeld, Director of Research
Eye on Sacramento
Phone: (916) 539-1054
E-mail: dennis@eyeonsacramento.org
Website: www.eyeonsacramento.org

 

Eye on Sacramento Issues Report Refuting Economic Premise

For Expanding the Sacramento Convention Center

 

At a press conference held this morning at the Sacramento Convention Center, Eye on Sacramento officials released a comprehensive report revealing the long track record of growing financial losses at the Convention Center, as well as challenging the proposition that a nearly $200 million taxpayer-funded 70,000 sq. ft. expansion of the Center will provide any net economic benefits to Sacramento.  Among the report’s findings:

The Convention Center will lose $19 million this year.  Center losses have been growing at a pace of $1 million annually for several years.  The Center has lost an astonishing $268 million in taxpayer funds over the past 17 years.

From its construction in 1974 to its major expansion in 1997, the Center has failed to generate revenues anywhere close to official projections, leading the city council to double the city hotel tax to cover its mounting losses in the early years and to extend $10.4 million in emergency bailout loans to the Center following its 1997 expansion, loans which remain largely unpaid today.

Because of the heavy drain of Center losses, Sacramento devotes 87% of its annual hotel taxes to covering Center red ink.  The nine cities that Sacramento competes with for convention business uses an average of only 45% of their hotel tax revenues to fund its convention centers, with 55% of such taxes going into their general funds.

If Sacramento reduces its allocation of hotel taxes to the Center to match the 45% average allocation of its nine competing cities – which it can do over time by simply avoiding the proposed Center expansion – EOS projects that the city would see an additional $8 million of hotel taxes flow into the city’s general fund each year to fund police, parks, road maintenance and other vital services.

The municipal habit of expanding convention centers in pursuit of greater center attendance has been a grotesque failure in city after city in the U.S., leading to a veritable “arm’s race” of center expansions and resulting in a massive glut of space, while actual demand for  convention space has been declining.

The theory of “Build It and They Will Come” may work in Hollywood movies, but the evidence clearly shows that it does not work with convention center expansions.  The following cities have each expanded their convention centers in recent years only to experience an actual decline in attendance following expansion: Chicago, Las Vegas, Seattle, Philadelphia, St. Louis, San Francisco, Orlando, Washington, D.C., and Boston, as well as many smaller cities.

The common culprit in the growing number of failed convention center expansions throughout the country (including Sacramento’s 1997 expansion) has been the grossly inaccurate projections of future center revenues generated by professional convention center consultants hired by cities.

Following Boston’s failed convention center expansion in 2004, the then executive director of the Massachusetts Convention Center Authority, James Rooney, was quoted as saying:

When I talk to people from other cities about making a public investment in a convention center, I’m equally blunt about the feasibility studies these consultants use to justify [such] investments…some of these guys ought to be taken out and shot.”

EOS has also determined that, in the lead up to the Sacramento city council’s key May 3rd policy decision to proceed with an expansion of the convention center, city staff presented the council with a staff report that relied heavily on the city’s primary convention center consultant, the firm of Conventions, Sports & Leisure International (CS&L).  City staff cherry-picked data and findings from the CS&L study, but staff failed miserably to provide council members with crucial findings in the CS&L study that clearly state that an expansion of the Convention Center is not needed nor justified given market conditions.

In short, the city council was misled by its staff into believing that its principal convention center consultant was solidly in favor of the proposed expansion when, in fact, it was opposed to it.

The city staff’s proposal to expand the Sacramento Convention Center is on the city council’s meeting agenda for tomorrow evening.

The EOS Report is viewable and downloadable via this link.

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The Grinch Backs Down – Utilities Department Reverses Policy In Time For Christmas

By Craig Powell

Inside City Hall

Last month, my column included my Christmas gift wish list to city leaders, pretty much all of which involved wishes for changes in the city’s troubled Department of Utilities. Instead of granting any of my wishes, the DOU acted like the Grinch last month when it announced the repeal of a decades-old policy under which it would repair breaks in the sewer pipes that run between a resident’s house and the sewer main that typically runs down the middle of city streets or alleys. This change in DOU policy was poised to sock a number of Sacramento residents hard in the pocketbook this season, including a widow on 34th Street, when a sudden reversal of DOU policy chased away the Grinch and saved Christmas for some Sacramento families, with an excellent assist by an able and energetic local TV news station.

Here’s a little plumbing lingo you’ll need to know: The sewer line that runs between your house and the city’s sewer main is called a lateral. The portion of the lateral that lies underneath your front yard is called the upper lateral, while the portion of the lateral that’s underneath sidewalks and city streets (and alleys) and connects up with the sewer main is known in the biz as the lower lateral.

Under a new DOU policy that went into effect on Oct. 1, the city stopped repairing both the upper and lower laterals, leaving it to homeowners to pay the often high cost of repairing such lines. The new policy is part of a DOU effort to reduce the level of service it provides residents while charging ever more for it (which, come to think of it, is pretty much a citywide policy now). It’s like tech industries but in reverse. For example, a couple of years ago, the city stopped picking up recyclable waste on a weekly basis and reduced service to every other week. We also lost street cleaning service as well as the claw, apart from its reappearance for three months at this time of year. After a brief pause, garbage rates are once again climbing. Of course, no one at the DOU suggested that garbage rates be lowered to reflect reduced levels of customer service.  Monopolists rarely do.

How much could homeowners end up paying under the DOU’s new policy on sewer laterals? In a recent ABC10 report on the issue, Karen Silva, owner of Navajo Pipelines, a major city contractor on the water meter project, said replacing a lateral line under a major thoroughfare could easily cost $50,000. She also expressed concern about the quality of work that some contractors might perform. “What if we have sinkholes? What if the sewer main collapses? Then what?”

Coincidentally (I think), in mid-October I had a lower lateral line collapse in the alley that adjoins an apartment house I own in Midtown. What would have been repaired by the DOU without charge two weeks earlier would now end up costing me $5,000. The ABC10 report included an interview with Clara Cid, the widow of the late renowned Sacramento Chicano artist Ricardo Favela. Cid was dealing with the same problem at her home on 34th Street: a break in the lower lateral in the alley behind her home. She faced the prospect of a Christmas ruined by the costs imposed on her by the new DOU policy.

But there actually is a “good news” ending to this story for Cid, as well as 40 other city residents who were informed in the past two months of problems with their sewer lines. Once ABC10 started peppering DOU with questions about its new policy, the DOU abruptly changed its policy once again, announcing that it would repair breaks in lower laterals. (But homeowners will remain responsible for repairs to their upper laterals.)

What left something of a bitter aftertaste about this episode was a follow-up email the city sent to Joe Rubin, the producer at ABC10 who produced the story. The email, from city media officer Linda Tucker, claimed, “The change in direction [returning to the former policy of the DOU repairing lower laterals] is in no way a result of any questions posed to the City by ABC10. Staff had been having conversations about a definitive direction throughout the last four weeks.”

The question is: Does anyone really believe that? To believe it, you’d have to believe that city staff began having “conversations about a definitive direction” (whatever that means) of the new policy almost from the instant the new policy was implemented, a policy that was itself implemented after months of DOU internal deliberation. It’s possible, but very unlikely. It’s much more likely that the DOU abandoned the new policy after feeling the heat of ABC10’s attention to a dumb policy that was causing Cid and others like her major financial grief. Why didn’t they simple acknowledge that ABC10 coverage was about to shine a very bright light on a dumb policy change and they decided to drop the new policy so the DOU wouldn’t look quite so much like a Christmas Grinch?

To understand the city’s highly defensive posture on such matters, you first have to understand the role that investigative journalist Joe Rubin and the media companies he’s been associated with (first, Sacramento News & Review and, now, ABC10) have played in exposing multiple instances of major waste and misconduct in the DOU over the past year or so.

Rubin’s exposes have included revealing tens of millions of dollars of waste in the installation of water meters in city sidewalks; exposing the wasteful DOU practice of abandoning backyard water mains long before they’ve exhausted their useful life; exposing the DOU’s use of a chemical in the city’s water supply that led to concentrations of a likely carcinogen that city tests revealed exceeded maximum EPA standards for almost a year; and revealing contracting irregularities and overbillings in the DOU’s chemical contracts.

This is not the first time city staffers have said that changes in city policy following a Rubin expose had nothing to do with Rubin’s news coverage. On Nov. 21, just one week after publication of Rubin’s blockbuster story in Sacramento News & Review that revealed wasteful practices in the city’s water meter and water main projects, city manager John Shirey announced that the city was changing its policies and would start installing water meters in people’s yards instead of in sidewalks and that each backyard water main would be examined to assess its remaining useful life. Shirey stated in his announcement that he had asked the DOU to conduct a review of the water meter and water main programs “well before [Rubin’s] article appeared,” meaning that the changes in city policy had nothing to do with Rubin’s expose.

Side note: Under the city’s new policy, water meters are supposed to be installed only in folks’ yards unless a homeowner specifically requests that it be installed in the sidewalk and agrees to pay a $400 fee. But Eye on Sacramento, the watchdog group that I head, is receiving reports that meters are still being installed by default in city sidewalks. We’re also received reports that DOU contractors are not always examining backyard water mains to assess their remaining useful life but are, instead, abandoning such mains and digging up streets unnecessarily to move water service to the street. (If you observe such practices in your neighborhood, please drop us a line.)

We at EOS were pretty skeptical of Shirey’s claim that he had ordered a review of the water meter program “well before [Rubin’s] article appeared.” So we filed a records request with the city that sought copies of all communications between Shirey and the DOU relating to Shirey’s alleged directive to the DOU to conduct a review of the meter and water main programs before Rubin’s article was published. City staff was unable to locate any such communication. It’s possible that Shirey instructed DOU director Bill Busath by phone or in person to conduct such a review, but it’s not likely. A city manager of Shirey’s skill and experience would almost certainly have made sure that a directive from him to a department director calling for a review of two of the largest capital improvement projects in city history be documented, at least by email.

Rubin gets under the skin of city managers because his stories uncover waste, fraud and abuse of taxpayer and ratepayer money and bad policies that embarrass city managers who, frankly, ought to be doing a better job of overseeing city government. It seems that they just cannot stand for Rubin to get any credit for triggering positive changes in city policies. Instead, they attack his stories.

Shirey’s public rebuke of Rubin and ABC10 for the story on excessive levels of a likely carcinogen in the city’s water supply made the point that the city never violated an EPA regulation. Well, that’s fine, but it’s also not relevant: The ABC10 report never claimed that the city violated an EPA regulation. ABC10 reported that numerous city tests showed that the city’s use of a test chemical (ACH) led to elevated concentrations of a likely carcinogen in the city’s water supply beyond that allowed under EPA standards for nearly a year. The report also expressed suspicions that the city may have shifted testing locations and taken the extraordinary step of injecting county water into the city water supply just days before a mandatory EPA test in order to dilute concentrations of the carcinogen to below EPA limits to avoid violating an EPA regulation and triggering an EPA citation.

The city is even hounding reporters who report on the ABC10 story, namely yours truly. After publication last month of my column, which included a brief summary of the ABC10 story on elevated levels of a carcinogen in the city water supply, the city’s Linda Tucker fired off an email to Inside Publications publisher Cecily Hastings that accused me of “propagating false information about our drinking water.”

Well. I knew that Rubin had the test reports in hand that proved the aEl Centro Reservoir trihalomethanesccuracy of his story. I also knew that ABC10 had its story vetted by ABC’s corporate legal counsel before running it. But out of an abundance of caution, I asked EOS policy director Erik Smitt, an engineer and experienced water plant operator, to analyze the data. He selected the test reports from a single city test site for review and plotted a graph that tracked the levels of the carcinogen over time. (You can view the graph at eyeonsacramento.org.) Smitt found that the mean (or average) concentration of the carcinogen at the test site throughout the one-year period in which the city was injecting the chemical ACH into the city’s water supply exceeded the allowable EPA standard of 80 parts per billion.  El Centro Reservoir trihalomethanes

Meanwhile, I’m pleased to report that Cid’s Christmas was not ruined by the DOU Grinch, thanks to the skilled and energetic reporting of the ABC10 team. As Cid was quoted as saying in the news broadcast, she considers the reversal of the DOU policy her family’s “own miracle on 34th Street.” And, yes, I’ll be asking the city in the New Year to credit me for the $5,000 plumbing bill I paid to replace the broken lower sewer lateral in the alley behind my property.

 

PROPOSED CITY UTILITIES RATE HIKES

January marks the beginning of key hearings on the city’s proposal to increase water rates by 9 percent, sewer rates by 10 percent and storm drainage rates by 16% in each of the next four years. The rate hikes are expected to increase a typical Sacramento homeowner’s monthly city utilities bill from $116 to $185 per month.

To express your views on the proposed rate hikes, I encourage you to attend the city’s Utilities Rate Advisory Commission meeting at 5:30 p.m. on Wednesday, Jan. 27, in the city council chambers in New City Hall (915 I St.). The commission’s recommendations will then likely be considered by the city council in either February or March. You can stay up to date on developments, as well as find out how you can help in the effort to moderate city utility rate hikes, by signing up for EOS email updates at eyeonsacramento.org.

 Craig Powell is a local attorney, businessman, community activist and president of Eye on Sacramento, a civic watchdog and policy group. He can be reach at craig@eyeonsacramento.org or 718-3030.

Press Conference On Suit to Halt City of Sacramento’s Mass Deletion of City E-mails

MEDIA RELEASE

Date/Time: July 23, 2015; 11:00 a.m.
Contacts: Erik Smitt, Policy Director,
Eye on Sacramento
E-mail: erik@eyeonsacramento.org
Phone: (916) 215-2275

Paul Nicholas Boylan, Attorney,
E-mail: PNBoylan@gmail.com
Phone: (530) 297-7184

Eye on Sacramento Holds Press Conference at County Courthouse

On Suit to Halt City of Sacramento’s Mass Deletion of City E-mails

At a press conference today, Eye On Sacramento, a member of the growing community coalition advocating for robust ethics, transparency and redistricting reform of City government, provided  updates on the lawsuit against the City of Sacramento to enforce the California Public Records Act (CPRA) to prevent the City from deleting over 50 million emails that form an irreplaceable part of the public record.

A Temporary Restraining Order (TRO) was granted by the Honorable Judge Shelleyanne W. L. Chang on July 7, which restrained the City from destroying these emails on Wednesday, July 8, as the City had planned.

The hearing for the Permanent Injunction will take place at the Gordon D. Schaber Sacramento County Courthouse, 720 9th Street, Sacramento, tomorrow, Friday, July 24, 2:30 pm, Department 24, the Honorable Judge Shelleyanne W. L. Chang presiding.

The Petitioners are asking Judge Chang to issue a Permanent Injunction preventing the City from erasing the public record and destroying the emails the petitioners want to access.  If the City destroys these emails, the public’s constitutional right to access these emails will be irrevocably injured and the City will be in violation of the California Public Records Act.

The Petitioners in the lawsuit are Richard Stevenson, a member of Eye on Sacramento, and Katy Grimes, Journalist.  Both Petitioners have filed formal requests to access emails the City intends on destroying and are suing the City under the CPRA to enforce their rights to gain access to these records.  The Petitioners, through attorney Paul Boylan, have made tireless efforts to reach an agreement with the City Attorney; those efforts have failed.

Since the TRO, Eye on Sacramento has contacted several City Council-members to resolve the issues through the enactment of new City policies that would mandate that City officials preserve City e-mails. Councilmembers will not speak with EOS on the advice of the City Attorney.

“It is clear that the City’s issues with e-mail storage space are a mere front for the objective of erasing history and covering up the past.” Erik Smitt, Policy Director.

“Eye on Sacramento is focused on transparency and citizen access to all mechanisms of government.  Deletion of public records is contrary to the principles of open government and the public’s right to know.” Erik Smitt, Policy Director.

Concurrently with the press conference, Paul Boylan, attorney for the petitioners in the case, issued the following statement: “The discussions I have had with the City have been productive, but only up to a point that is far short of resolving this conflict.  I am left with the impression that the City’s only goal is to destroy as many emails as possible and is gaming the system to achieve that goal.  The City’s goal should be preservation of public records. Thus far, the City has demonstrated no pressing need to destroy anything.”

Open Government … transparent, responsive, accountable!

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Restraining Order Against City Of Sacramento Delays Email Deletion

Capital Public Radio

Capital Public Radio

 

A judge has issued a temporary restraining order barring the City of Sacramento from deleting its old emails for 22 days. The city had planned to begin deletions Wednesday.

Richard Stevenson filed a Public Records Act request to see all of the emails and sued to preserve them.

A Sacramento County Superior Court judge granted the restraining order but says Stevenson must narrow his request by 10 a.m. Wednesday.

Stevenson says he’s pleased with the restraining order and hopes it provides enough time for the city council to change the city’s email deletion policy.

“It gives a chance for the city council, which returns on the fourteenth,” says Stevenson. “See, this came up when the city clerk’s boss, the city council, was in recess, which means there was no chance to appeal to the council.”

Stevenson and a second plaintiff say they will attempt to provide the city with a gift of storage so that it can preserve all emails dating back to 1997.

The city attorney’s office could not say if there is no legal reason the city could not accept or use such a gift.

Bob Moffitt

Sacramento Region Reporter

Bob is the Sacramento Region Reporter. He has been at the forefront of the coverage of the Sacramento Kings’ saga and the effort to build a new arena in Sacramento. He also covers education, business, environment, and sports stories.

The Big Pink Ballot Box

The Big Pink Ballot BoxSitting on the counter at Sacramento City Hall is a pink ballot box for the Measure B election.  Why is there a ballot box on the counter for a vote by mail election?  According to a clerk at the Sacramento County Registrar of Voters office, the box is at City Hall for the convenience of voters who don’t have stamps.  Really, I’m not making this up.  I inquired, “Who is in charge of the box?”  The clerk tells me that the City is in charge of the box and calls for it to be emptied when it’s full.  This concerns me a tad.

I stopped by City Hall to check on ‘the box’, sure enough, there it sits on the counter at the security station.  I asked the security guard how often it is emptied.  At first he said, ‘every day’, and then when I continued to stare at him he admitted he doesn’t know if it’s ever been emptied.  I asked him if I could pick it up to see if it felt full… my guess is there’s about ten ballots in the box.  I asked what happens to the box at night; he said he thinks someone takes it into their office.

I don’t know about you but this concerns me.  Who is in charge of this ballot box for an election that will grace the City of Sacramento with $30 Million in taxpayer dollars?  The City.  Why?  When I asked the clerk at the Registrar of Voters why the box is under the care of the city she said I needed to talk to the Assistant Registrar.  I left a message.

Eye On Sacramento and the League of Women Voters to Host Public Forum on City Ethics & Transparency Reform at 6:30 p.m. Wednesday, March 25th at the Robbie Waters Pocket-Greenhaven Library

Eye On Sacramento (EOS) and League of Women Voters (LWV) are pleased to announce the next public forum on City Ethics & Transparency Reform Project at 6:30 p.m. on Wednesday, March 25th at the Robbie Waters Pocket-Greenhaven Library, 7335 Gloria Drive. The public is invited and encouraged to share ideas and ask questions on ethics, transparency and redistricting reforms for our city.

Attendees will be hearing the results of a survey conducted by a team of EOS & LWV researchers and presented by EOS President Craig Powell and LWV President Paula Lee.  City Council Member Rick Jennings, Terry Francke, Californians Aware, and Bill Edger, retired Sacramento City Manager, will be on hand to critique the findings, offer their insights and answer questions from the public.  Lisa Garcia, EOS Community Outreach Director, will be the moderator.

We encourage you to share the event flyer (found here) with others who may be interested in attending the forum.

Eye On Sacramento and the League of Women Voters to Host Public Forum on City Ethics & Transparency Reform at 6:30 p.m. Thursday, March 16th at the Sierra 2 Center

Eye On Sacramento (EOS) and League of Women Voters (LWV) are pleased to announce the next public forum on City Ethics & Transparency Reform Project at 6:30 p.m. on Monday, March 16th at the Sierra 2 Center, Garden Room, located at 2791  24th Street. The public is invited and encouraged to share ideas and ask questions on ethics, transparency and redistricting reforms for our city.

Attendees will be hearing the results of a survey conducted by a team of EOS & LWV researchers and presented by EOS President Craig Powell and LWV President Paula Lee. City Council Member Jay Schenirer, Terry Francke, Californians Aware, Bill Edger, and retired Sacramento City Manager, will be on hand to critique the findings, offer their insights and answer questions from the public.  Lisa Garcia, EOS Community Outreach Director, will be the moderator.

We encourage you to share the event flyer (found here) with others who may be interested in attending the forum.

Stunning Revelations in Fraud Lawsuit Against City of Sacramento on Arena Deal

Sacramento attorneys Patrick Soluri and Jeffrey Anderson released this media release today, February 7, 2014, concerning stunning evidence they have uncovered in their fraud and illegal-gift-of-public-funds lawsuit against city officials, principally arising from depositions they’ve recently taken of Sacramento city councilmember Kevin McCarty and Sacramento’s director of economic development, Jim Rhinehart:

View/Download the Media Release Here

Declaring War … Phony Land Values and Early Arena Bond Sales

Published on Thursday, 02 January 2014 03:37

Declaring War

Phony Land Values and Early Arena Bond Sales

by Craig Powell

On Dec. 10, the city of Sacramento effectively declared war on the arena initiative, the measure that would give voters the final say on any taxpayer subsidy of a sports arena. A mere six hours after supporters of the initiative submitted 34,000 petition signatures to the city clerk to secure a spot for the initiative on the June 3 primary ballot, city treasurer Russ Fehr appeared before the city council to reveal a stunning new city strategy to unhorse the measure. Fehr said that the city now intends to accelerate the sales date of the proposed $300 million arena bond from next summer, as originally planned and long touted, to just 14 days before June 3 election.

Why is the city now rushing to sell the bonds in May and not this summer as originally planned?

Because under California law, a ballot initiative cannot dislodge a pre-existing obligation of the city, even if the initiative qualifies for the ballot before the city incurs the obligation.

read more … Declaring War … Phony Land Values and Early Arena Bond Sales

view/download … Declaring War … Phony Land Values and Early Arena Bond Sales.PDF

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Nominee for this year’s Economic Ignoramus Award

I’m nominating city staffer Davna Gauthier for this year’s “Economic Ignoramus Award” for her staff report on a proposal to expand the city’s taxicab regulations.  The first line of her report summary captures not just her manifest ignorance of basic economics, but shows how easily the incumbents in a regulated industry can capture the very government that is supposed to be regulating it.

Craig Powell, President of Eye On Sacramento

From next week’s agenda for the city’s Law & Legislation Committee:

5.  Recommendation for the Expansion of Taxicab Regulations Estimated Time: 30 Minutes

Location: Citywide Issue: The City of Sacramento and the taxi industry concur that there are too many taxis in the Sacramento area, especially in downtown Sacramento. In August 2011, the City council implemented a tax vehicle permit moratorium to allow staff time to address potential solutions to the influx of taxis in the downtown and other areas of the City. Since that time, staff has been researching limiting the number of taxicab permits, as well as regulations that would improve the taxi industry/services in the City

Recommendation: Discuss and provide direction on staff recommendations for actions designed to improve the City’s taxicab services and to regulate the industry in a manner similar to other cities of our six and to protect public health and safety. Contact: Dafna Gauthier, Business Permit Manager, (916) 808-7800; Brad Wasson, Revenue Manager, (916) 808-5844; Finance Department. Member Comments-Ideas, Questions and Meeting/Conference Reports

Item 05 – Recommendations for the Expansion of Taxicab Regulations (PDF – 165KB)