By Ned Leiba, CPA
September 11, 2017
Stockton, CA – The City Council will meet Tuesday evening September 19 at 5:30 PM to vote to purchase property and expend additional funds to bring us a new City Hall. The total cost is ostensibly $25 million, but it probably will be much more.
The important missing analysis by city staff would compare what that $25 million proposed expenditure would bring to a sensible renovation of the existing, venerable City Hall.
The staff report contends:
Remodeling the building to continue to serve as City Hall would not only be very expensive but would also be too small to meet the City’s current needs. Renovating historic City Hall and constructing a new annex behind it to accommodate current space needs would be cost prohibitive with an estimated expense of $50-60 million to design and construct the improvements. This would result in the need for debt issuance which would have a negative impact to the City’s Long-Range Financial Plan.
We should see the details behind these claims. We need a cold, impartial financial analysis of the alternatives.
On pages 7 and 8 of the Legislative Text, you will see again the “fuzzy graphs” of the Long Range Financial Plan (LRFP). I do not believe the City has released the detailed schedule behind any version of the LRFP since bankruptcy. In the past these fuzzy LRFP graphs have been used to claim the city will go bankrupt if it opened the Fair Oaks Library with costs of under $500,000, and now they are being used to justify $25 million in expenditures.
The City Council refused to adopt the unanimous recommendation of its Charter Review Advisory Commission to place on the ballot a measure to provide Stockton with a strong and independent City Auditor. One of the duties of an independent City Auditor would be to impartially analyze proposals such as this $25 million project. The City meanwhile has not allowed an audit, as required by ordinance, of Measure A funds. The Measure A financial statements produced and filed with regulators are profoundly, clearly misstated, by millions of dollars. We can have no confidence this proposal is economically sensible without an independent fiscal analysis.
A few of you may recall I expressed my concern about the 2007 pension bonds that were approved unanimously by the City Council. I said the City was headed for a “financial calamity.” I worry that without a proper financial analysis by independent experts, not hired by City staff, we will rue the day the City embarked on another plan to spend millions of taxpayer dollars.
