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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Eye on Sacramento Special Board Meeting

We would like to extend a personal invitation to you to join Eye on Sacramento for a special Board Meeting this Friday, June 24, 2016 at Noon featuring a special guest speaker: Jorge Oseguera, the City Auditor for the City of Sacramento.

We will meet at the Perko’s Cafe located at 925 3rd Street, Sacramento at J Street & 3rd Street.

If you plan to attend, please R.S.V.P. to Anna Robertson at via email at anna@eyeonsacramento.org by Thursday June 23rd.

We hope to see you there!

Steinberg’s Consulting Arrangements with Metropolitan Water District

MEDIA RELEASE

Date/Time: June 2, 2016, 3:00 p.m.
Contacts: Craig Powell, President,
Eye on Sacramento
Phone: (916) 718-3030
E-mail: craig@eyeonsacramento.org

Eye on Sacramento Calls on Mayoral Candidate Darrel Steinberg

to Fully Disclose the Details of His Contractual Relationship

With Southern California’s Metropolitan Water District

Sacramentans learned for the first time yesterday from a Sacramento Bee story that Darrell Steinberg, while actively seeking the support of Sacramento voters for his mayoral bid, has been covertly providing strategic consulting services to the politically powerful Southern California-based Metropolitan Water District (MWD) whose interests are very much at odds with the interests of the City of Sacramento and its residents on just about every major water issue facing our region. Steinberg’s law firm, Greenberg Traurig, has been collecting $10,000 per month from MWD for Steinberg’s services since July of last year.

Eye on Sacramento (EOS) has been championing the adoption of meaningful transparency and ethics reform in the City of Sacramento for the past 18 months. EOS co-hosted 10 public forums on the subject last year, helped form a broad coalition of supportive community groups and presented reports and proposals for a model ethics code, a robust ethics commission, a strong Sunshine Ordinance and an independent redistricting commission.

We are troubled that Sacramento voters who have already voted via absentee ballot (now fully half of all Sacramento voters) did so without the knowledge that one mayoral candidate was effectively on the payroll of the MWD. While nothing can be done at this late date to cure that significant informational failure, there are some immediate steps that Mr. Steinberg can and should take to fully explain the nature and extent of his relationship with MWD for the benefit of voters who will be casting their ballots on Election Day.

Questions that Mr. Steinberg should now answer include: When did he and MWD first begin discussing a consulting arrangement? How much of his time over the past year has he devoted to providing “strategic advice” to MWD as called for in the contract? Has he been maintaining time records of his services? Will he publicly disclose such records? Has he provided any “deliverables” to MWD, such as reports and other documentation? Will he and MWD now disclose such documents? What public officials in our region did he meet with in the service of MWD’s goal of building relationships with North State stakeholders? Will he and MWD voluntarily release copies of their e-mail communications with one another, without the need for submitting formal public records requests? (Note: Steinberg was providing “consulting services” for MWD, not legal services which would have been protected from public disclosure under the attorney/client privilege).

The voters of Sacramento deserve to know if Mr. Steinberg, in providing consulting services to MWD while campaigning for Sacramento mayor, has been acting appropriately, ethically and loyally as both a Sacramento resident and an aspirant to the mayor’s office or has he acted in a manner that is at odds with the long-term best interests of Sacramento and its residents?

By promptly and fully disclosing these matters to the Sacramento public, Mr. Steinberg will go a long way towards allaying legitimate public concern over the role he is playing with MWD. If Mr. Steinberg fails to provide such disclosures, we would encourage the Sacramento County Civil Grand Jury to consider initiating an investigation into Mr. Steinberg’s relationship with MWD to uncover the facts. One way or the other, Sacramento voters deserve to know the facts and implications of Mr. Steinberg’s dealings with MWD.

The contract between WMD and the Greenberg Traurig law firm involving Mr. Steinberg’s consulting services to WMD may be viewed on the EOS website via this link.

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RT’s $10 Million Streetcar Design Contract

MEDIA RELEASE

Date/Time: April 25, 2016, 4:00 a.m.
Contacts: Erik J. Smitt, Policy Director,
Eye on Sacramento
Phone: (916) 215-2275
E-mail: erik@eyeonsacramento.org

REGIONAL TRANSIT’s $10.2 MILLION CONTRACT

DOWNTOWN RIVERFRONT STREETCAR DESIGN SERVICES

Tonight, Sacramento Regional Transit District’s Board of Directors will consider approving a $10.2 million contract with HDR, Inc. for design services of the Downtown Riverfront Streetcar Project. These design services will cover complete track-routing and all other facets of the proposed 4.2 mile system. The $10.2 million will come from federal Congestion Management Air Quality funds.
But there is more to the story.

The community does not want this useless streetcar. Last June, city of Sacramento registered voters in a proposed assessment district voted a resounding “NO!” to a $38 million bond measure to fund the city’s share of the $195 million streetcar project. This “NO!” vote created a significant hole in the streetcar construction funding. As yet, after ten months, the city has not found a funding source for their commitment to the project. Also, the State of California has not firmly guaranteed their $10 million share of construction.

Now, with significant funding still in limbo, the RT Board is asked to roll-the-dice on this $10.2 million financial commitment, which could be used on more important projects.

Another consideration: As pointed out in our recent report, “EOS’s Recommendations on RT’s Fiscal Crisis,” Appendix 1 (www.eyeonsacramento.org), based upon research by transit authority Dr. Gregory Thompson, annual operational expenses will likely range from $6.3 to $8.8 million. The streetcar project’s operational cost projections are woefully below this range, adding another significant project risk.

We want and need smart, long-range decisions for transit problems. Not needed are decisions, such as the one before the RT Board tonight, that may not only cause chronic operational red ink, but also become a waste of taxpayer funds if anticipated local monies fail to materialize.

Unless construction funding by all governmental agencies committed to this project are firmly identified, Eye on Sacramento urges a “No” vote on this Downtown Riverfront Streetcar design services contract.

(The design contract is #13 on RT’s Agenda. The board meeting begins at 6:00 pm and the meeting chambers are located at RT’s headquarters, 1400 29th St.)

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RT on the Rocks … Fight over fare hikes splits transit board

By Craig Powell

 

To get a sense of how broke Regional Transit is, consider this analogy. Let’s say you’re part of a Sacramento family. You have a fairly well-off, middle-class lifestyle, but in the last couple of years you’ve really splurged, buying yourself a big, new Mercedes and a big, pricey cabin up at Lake Tahoe, all financed to the hilt. Meanwhile, the small business you run, RT Clothing, has never regained the boatload of customers you lost when you decided to jack up your prices by 20 percent in the middle of the last recession (oops), leaving you with a flat income for years. Fortunately, your wife, a retiree who collects both a military pension from the federal government and a healthy state government pension, has been collecting cost-of-living increases for years. She brings home close to 80 percent of the family income these days, bless her. Together, you have a family income of close to $150,000 per year.

The charming new home you bought 30 years ago in Light Rail Estates is showing serious signs of age and, let’s be honest, neglect. Your roof is shot, the paint’s badly peeling, you may need a new furnace and your backyard pool has algae stains and a rather unpleasant odor. Lately, some of the sketchier kids in your neighborhood have been jumping over the fence when you’re not home, swimming in your pool, hanging around for hours on end and leaving their trash everywhere. It’s gotten so bad that many of your longtime friends no longer accept invitations to your summer pool parties. You’ve spotted some of them going into Bob and Nancy Uber’s backyard down the street. The Ubers put in a nice, new pool last year and they let their friends drop in to swim whenever they want.

Things are going so-so until one day you decide to open up your bank and credit card statements for the first time in six months. You’re stunned (stunned!) to see all of the savings you thought you were socking away each month have somehow evaporated. Not only that, you owe a whopping $18,000 on your Visa bill. (How did that happen?) In a panic, you check the balance in your checking account and your heart sinks further. You have just $3,000 in cash and, at the rate your family burns money, it will be long gone in three months’ time.

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The Pot Tax … Helping kids at the expense of the general fund

By Craig Powell

Jay Schenirer means well, he really does. But programs launched with the best of intentions are no guarantee of sound policy or effectiveness, as Schenirer’s recent proposal confirms.

His basic idea is to dramatically increase city funding of programs for children and young adults by getting voters in June to approve a “new” 5 percent tax on marijuana cultivation, with the proceeds directed exclusively to youth services, bypassing the city’s general fund. Schenirer and his hardworking staff have spent the past year compiling research studies that show the benefits such programs can have on outcomes for kids.

Schenirer is certainly not new to youth issues: He’s spent most of his adult life working on them—in state service, on the city school board, as an education consultant and as the founder of youth-focused nonprofits since his 2010 election to the city council. (He’s raised more private funds for these nonprofits from corporations and foundations than any other councilmember with the exception of our city’s star private fundraiser, Mayor Kevin Johnson.) Schenirer is almost certainly the council’s foremost authority on youth issues, with Rick Jennings—the long-term CEO of the Center for Fathers and Families who served on the city school board alongside Schenirer—a close second.

Schenirer and his staff have prepared a thoughtful 22-page blueprint for how to create a new city department of youth services, an idea that city manager John Shirey threw cold water on by calling it a wasteful increase in city overhead. Shirey prefers to have the parks department, which administers the city’s current youth services programs, handle any expansion of such programs.

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Sacramento needs real ethics reform, not city’s fake version

SOAPBOX

OCTOBER 4, 2015

City Council is finalizing a package of proposals on ethics and open government

Eye on Sacramento says its reforms are much more robust

Public won’t be satisfied with weak changes

A bitter divorce on ethics reform

FOON RHEE

SEPTEMBER 30, 2015

Eye on Sacramento and League of Women Voters joined forces to push City Hall

But after holding 10 public forums, the two groups disagreed on policy and tactics

Now, league is backing city plan, while watchdog group is mulling ballot measure

BY FOON RHEE

Sacramento City Council ethics reform is a must

EDITORIALS  SEPTEMBER 7, 2015

HIGHLIGHTS

Watchdog group’s ethics recommendations should not be dismissed

Public accountability and access are properly the focus of recommendations

Ironically, City Council committee has been discussing ethics behind close doors

IMG_J_JV_051215_COUNCIL__2_1_MP4QAIUU_L126192555

Sacramento City Councilman Allen Warren was replaced as leader of the council’s ethics reform effort after news of a sexual harassment claim against him. Warren has denied his former aide’s allegations. José Luis Villegas jvillegas@sacbee.com

BY THE EDITORIAL BOARD

As Sacramento’s elected officials hem and haw, a local watchdog group has set the bar on transparency and ethics reform.

After holding public forums with the League of Women Voters, Eye on Sacramento is calling for four major changes at City Hall:

▪ An open government ordinance that guarantees and increases public access and accountability. It includes keeping all city emails for at least 10 years, requiring ad hoc City Council committees to meet in public and adding an independent city auditor, not one appointed by the council.

▪ A city ethics code, including strict rules on nepotism, conflicts of interest and sexual harassment, plus a cap on donations made to charities at the behest of elected officials. That would hamstring Mayor Kevin Johnson, who has persuaded donors to contribute huge sums to charities of his choice.

▪ An independent ethics commission, likely appointed by retired judges, to enforce the code and state ethics laws. It would have the power to subpoena records, compel witnesses to testify under oath and to fine and censure officials, or even seek to kick them out of office.

▪ An independent redistricting commission to draw City Council districts. There should be no doubt this is needed for the 2020 Census after the fiasco after the 2010 count. The council appointed a citizens committee, but ignored its maps and approved its own.

These are reasonable ideas deserving of serious consideration by a City Council committee, which was appointed by the mayor and is supposed to issue its report later this month.

We don’t know exactly what the council panel has in mind because it has been meeting in private – which is amazingly hypocritical.

The mayor’s spokesman assures us the council’s recommendations will reflect all citizens’ values, not just those of a special interest group. Eye on Sacramento’s proposals should not be dismissed lightly.

If the council does not approve reforms, Eye on Sacramento is prepared to go to the ballot in 2016. It would be far better if council members and the group’s leaders can agree on a plan. Whether in office or outside City Hall, everyone should want a more open and ethical government.
Read more here: http://www.sacbee.com/opinion/editorials/article34326018.html

 

 

Eye on Sacramento Releases Package of Proposed City Reforms

MEDIA RELEASE

For Immediate Release
Release Date/Time: September 2, 2015; 10:15 a.m.
Contact: Craig Powell, President, Eye on Sacramento
E-mail: craig@eyeonsacramento.org
Phone: (916) 718-3030

Erik Smitt, EOS Policy Director
E-mail: erik@eyeonsacramento.org
Phone: (916) 215-2275

Restoring Accountability:

Eye on Sacramento Releases Package of Proposed

City Ethics, Transparency and Redistricting Reforms

At a press conference this morning, local government watchdog group Eye on Sacramento (EOS) presented a package of ethics, transparency and redistricting reforms proposals for the City of Sacramento.

“The reform proposals we are releasing today are the culmination of ten very well-attended public forums held in every part of Sacramento earlier this year, followed by three months of extensive research and careful deliberation by our numerous volunteers and study groups, “said EOS president Craig Powell.  “These reforms are designed to make Sacramento the most open, transparent and ethically accountable municipal government in California and to help restore citizens’ trust in their city government.  It’s a package in which we, as citizens and residents of Sacramento, can take real pride,” Powell added.

The package includes summaries of each of the “Four Pillars of Reform:”

(1) A cutting edge Sunshine Ordinance that will make it easier for residents to participate, and have a more effective role, in City decision-making and will open up City government records and data to public review and media scrutiny to the greatest extent practicable;

(2) An Ethics Code that will set minimal standards of ethical conduct expected of our city officials;

(3) An independent and empowered Ethics Commission that will have the means and authority to hold public officials accountable for misconduct and to exonerate them whenever they’re subjected to unsubstantiated claims, through the application of rules that will provide strong due process protections; and

(4) An independent citizens Redistricting Commission that will, at long last, bring an end to the unhealthy and undemocratic practice of councilmembers drawing their own council district lines (aka picking their own voters) and shift that power to a panel of citizens who will have final authority to draw council district boundaries.

Also presented was a 12-page “Summary of Public Comment” (copy attached), that recaps the numerous comments received from the public at our Kick-Off Forum in February, our seven District Forums and our final Work Shop Forum at the Clunie Clubhouse on May 17th.  The forums were jointly sponsored by EOS and the League of Women Voters, as well as 23 co-sponsoring community organizations.

Public Disclosure of Proposals Before Closed-Door Negotiations With City Officials

“Representatives of our reform effort are expecting to meet within the next few days with city officials in closed door meetings to discuss our reform proposals in detail, to explore common ground and to, hopefully, reach agreement on the adoption/endorsement of a set of reforms that are mutually acceptable to all parties,” Powell said.

“Before our representatives go behind closed doors to negotiate these proposals, however, we feel we have an obligation to first release our reform proposals to our forum attendees, our supporters, the media and the public at large,” Powell added.  “The public deserves to know exactly where we stand at the beginning of these negotiations so that they can assess where we end up at the end of them,” Powell concluded.

Plan B: A Ballot Initiative

“We’re pursuing these reforms on two different, but parallel, tracks.  Given the significant time and effort it takes to qualify an initiative for the November 2016 general election ballot, we’re entering into negotiations with city officials in pursuit of a mutual agreement while we’re concurrently taking the steps necessary to qualify our reform proposals for the November 2016 ballot,” said Powell.  “It is our great preference that we reach an acceptable agreement with city officials, but we’re doing the necessary ground work to bring our reform proposals before Sacramento voters in November 2016,” Powell added.

“Given the growing number of claims asserted against councilmembers, the city auditor’s recent finding of nepotism in the Department of Utilities, the city’s efforts this year to mass delete 85 million e-mails, the alleged use of city staff and resources for political purposes and the shrouding of city e-mails via the use of private e-mail accounts, the need to establish accountability in city government through effective ethics, transparency and redistricting reforms is acute,” Powell concluded.

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To view/download a copy of the Media Release click here
To view/download a copy of the Sunshine Ordinance Summary click here
To view/download a copy of the Ethics Code Summary click here
To view/download a copy of the Ethics Commission Summary click here
To view/download a copy of the Redistricting Commission Summary click here
To view/download a copy of the 12-page “Summary of Public Comment” click here