In the event of emergency, break ground

What do the new Emergency Operations Center/Fire Station No. 3 complex and the Alameda Theater have in common?

If you said, “You’re not allowed to yell, ‘Fire!” in either one of them,” guess again.

Give up?

The correct answer is that both projects have been, or will be, funded in part by the proceeds of bonds issued in 2003 to pay for redevelopment along the northern waterfront and in the Park and Webster Street business districts.

That surely makes sense for the theater.  But the EOC and the fire station?

Well, all we can say is that when the fire department and the firefighters’ union insist that a project must get built, the politicians go along and staff has got to find the money somewhere.

Here’s the story as the Merry-Go-Round has been able to piece it together from public documents and follow-up communications with Interim City Manager Liz Warmerdam.

Under former law, redevelopment agencies – the City’s was known as the Community Improvement Commission – could issue so-called “tax allocation bonds” to finance capital improvement projects in designated areas.  These bonds would be repaid from property taxes assessed against property owners in the area where the project was located.

In 2003, the CIC issued a series of tax allocation bonds to generate funds for projects in the “merged” West End Community Improvement Project and Business and Waterfront Improvement Project areas.  The “merged” area covered the northern waterfront and the Park and Webster Street business districts (as well as the Lincoln Avenue commercial district).

Bond proceeds totaling about $25 million were deposited in a Project Fund.  Most of these funds were spent on the renovation of the Alameda Theater and construction of the adjacent parking garage.  But, when the redevelopment law was struck down in 2011, there was still unspent money left over in the Project Fund.

The so-called Successor Agency, which took over for the CIC, agreed last February to transfer the “excess bond proceeds” to the City, and, since then, staff has designated $407,000 for projects like the Park Street Streetscape Phase 3 and a signal modification at Singleton Avenue and Main Street.  Then, last September, the Successor Agency “identified” another $994,659 in “excess bond proceeds” and agreed to transfer these funds to the City as well.

The agreement between the Successor Agency and the City contains language broad enough to authorize spending the money on almost any of the City’s many unfunded capital improvement projects – as long as they are located in the “merged” area.  For example, the $994,659 could have been used for the Jean Sweeney Open Space Park, which Recreation and Parks director Amy Wooldridge recently told Council was $5 million short of the $10 million it needs to come to life.  Or it could have been set aside, like the first $407,000, for more prosaic items like repairing or improving streets and sidewalks.

But staff had other ideas.  Forget about the Sweeney Park or neighborhood streets and sidewalks.  The excess bond proceeds should be earmarked for . . . the new EOC and fire station.

“Staff had multiple projects it was trying to fund based on Council direction,” Ms. Warmerdam explained to us.  “Based on the City’s successful history of receiving grant funds for its parks (and the lack of grant funding available for safety type structures) city staff recommended using residual bond proceeds from the former CIC (Redevelopment Authority) for the EOC/FS3.”  She added that, “Staff consulted with bond counsel to determine if these were legitimate use of funds and determined that they were both in the project area and consistent with the purpose for which the bonds were issued.”

So staff prepared a report informing Council that “eligible projects” for the excess bond proceeds “could include capital projects such as the Emergency Operation Center and Fire Station 3,” and placed the item on the consent calendar.  After making clear that they understood staff’s plans for the money, Councilwoman Marilyn Ezzy Ashcraft and Councilman Tony Daysog – who would become the two holdovers from the former Council  – made and seconded, respectively, a motion accepting the transfer.  The motion carried unanimously.

Now the City had around another $1 million to spend, if necessary, on the new EOC and fire station.

As it turned out, this was a prescient move.

By the time the new Council took office in December, its predecessor already had given the green light to a new EOC estimated to cost $3 million and a new fire station estimated to cost $5 million.  In addition, it had approved financing plans that would cover the projected costs of constructing both buildings.

For the EOC, the former Council authorized re-financing an outstanding bond issue to generate $3 million in spendable cash.  For the fire station, it okayed a $5 million package cobbled together by staff from various sources, including selling the house where the firefighters lived for $450,000 and borrowing $3 million from the state Infrastructure Bank.

Unfortunately, $8 million wasn’t enough.  Through last April, the City managed to spend $706,800 on “pre-engineering and design” for the new EOC and fire station.  (Contracts awarded by the former Council to a single firm will allow architectural and construction management costs to grow to $722,000).  After the bids were in, the contract price for building the two structures came to $7,960,608 (including a 5% contingency).  Design and construction costs thus would exceed the $8 million in previously identified sources of funding by $667,408.

Now it became necessary to play the “excess bond proceeds” card.  So staff recommended last Tuesday that, in addition to authorizing the construction contract, Council also “appropriate” $863,000 in “unspent [bond] proceeds” to pay to build the new EOC and fire station.

Neither Councilwoman Ashcraft nor Councilman Daysog, who had known of the plans for the money since last October, said anything about their earlier votes.  But Mayor Trish Spencer – who, of course, had not taken part in the previous proceedings – had a question.  “What else,” the Mayor asked Finance Director Elena Adair, “could those moneys be spent on?”

“Any proceeds from the tax increment . . . will have to be approved within the redevelopment area,” Ms. Adair replied.  “In that particular case, the fire station is within the redevelopment area and is an appropriate use of the proceeds, and it was identified by a prior Council that it was an appropriate use and should be used for that purpose.”  The Mayor then went on to other issues.

So the deed was done:  The politicians, assisted by staff, had managed to direct another $1 million to the new EOC and fire station rather than use the money for any other worthy public purpose.

If you agree with Public Works Director Bob Haun that the City would descend into chaos in the event of a natural disaster unless a new state-of-the-art facility gets built, you probably will applaud using the “excess bond proceeds” for the new EOC and fire station.  For our part, we would like to have heard at least some discussion by our elected officials, back in October if not on Tuesday, about alternative uses for these funds.  Just because the fire department and the firefighters’ union want to erect a grand new edifice on Grand Street doesn’t mean that’s the use that would be best for Alamedans.

Indeed, we think that, whenever the City is fortunate enough to glom onto cash from a source other than the taxpayers, a discussion about priorities should precede the decision about the use of funds.

Here, the right time for this conversation to have begun was 2013, when then Finance Director Fred Marsh informed the former Council that the City could re-finance previously issued bonds at a lower interest rate.  If the City had just paid off the outstanding balance, it would have reduced annual debt service (and thus lowered General Fund expenses).  And even if Council had decided to borrow more than the City needed to pay off the bonds, it could have used the extra cash for a host of capital improvements; not every penny had to go to pay for building what Planning Board member John Knox White once called “this giant monolith sitting in the middle of this sea of asphalt.”  Why not spend half on a less elaborate EOC and half on the Sweeney Park?

In defense of the new Council, perhaps it can be said that the actions taken by its predecessor tied its hands:  The former Council had authorized re-financing the bonds and taking out loans to pay for the new EOC and fire station.  It had accepted the transfer of the excess bond proceeds knowing full well the use staff had in mind for them.  Did the new Council really want to kill the project by preventing the City from tapping this additional source of funds?

We suppose all we can ask is that current Council members take more care – and exercise more restraint – than their predecessors did when the decision about how to spend the City’s money is theirs to make.

There is one other topic that we want to address before we leave Tuesday’s meeting.

During the May 6 Council meeting at which the police and fire departments made their budget presentations, Vice Mayor Frank Matarrese engaged Fire Chief Doug Long in a brief discussion about ambulance staffing.   Although the Vice Mayor did not cite any references, his concerns echoed those expressed by the International City/County Management Association in its operational assessment of the AFD made in 2009.

Last Tuesday, Mayor Spencer brought up the ICMA report by name.  She noted that the fire station that the City was being to ask to spend millions to replace was one that ICMA had recommended closing.  Vice Mayor Matarrese and Councilwoman Ashcraft quickly suggested an out – the demand for fire services had increased since 2009 because of actual and planned development along the northern waterfront and at Alameda Point – but Chief Long was having none of it.

Instead, he recited, as if from memory, the talking points crafted by the firefighters’ union – on whose executive board the Chief once sat – whenever the dreaded initials “ICMA” are uttered:

The ICMA report was very contrary to any of those other [consultant] reports.  Their staffing model said that we should only have 2 fire stations for the whole city.  Reading through it didn’t really make a whole lot of sense.  They counted on office staff to jump on fire engines and respond when needed.  We found it didn’t make sense, and it didn’t really see how it applied to the city.  What we found was that ICMA was called out by cities across the country, specifically in Michigan and Oklahoma, for having a boilerplate, template report that they were charging cities for.  It came to a head in 2009 in Lake Havazu, Arizona, where the report they provided to the Council actually still had “City of Alameda fire department” on it.  So their reports have been very discredited, and that goes to show why it really didn’t line up with the other reports for staffing in the city.

We’ll leave it to our readers to judge for themselves whether Chief Long accurately described the recommendations made by ICMA.  (Hint: You might want to check out pages 42 through 46 to find out what the consultants actually suggested).  But the next time Chief Long, or any other current or former union official, disparages the ICMA report, we’d appreciate if he’d answer three questions.

First, if ICMA is in the business of bilking cities by charging them for a “boilerplate, template report,” why does anyone still hire them?  According to Leonard Matarese, ICMA’s Director of Research & Project Development (and, presumably, no relation to the Vice Mayor), ICMA has conducted more than 200 public safety studies, split evenly between fire and police departments, for 164 city or county governments in 34 states.  We suppose you can fool some of the people some of the time – especially if they’re local elected officials – but you’ve got to be pretty slick to deceive so many for so long.

(A Google search revealed that the criticisms leveled by our local firefighters’ union mirror those made by their IAFF cohorts across the country.  When we asked Mr. Matarese about the union’s apparent antipathy toward his organization, he responded:

We expect unions to want more . . . staff, equipment, stations, pay, benefits, etc.  And at times our studies recommend such when warranted.  Our objective reports are based upon very detailed workload analysis by our team of Ph.D. experts in Operational Research in Public Safety and highly regarded national subject matter experts in the particular field we are studying.  They speak for themselves.)

Second, if ICMA takes a generic approach toward public safety rather than focusing on the needs of a particular city, why did the Alameda police department find virtually all of ICMA’s recommendations worth implementing?

That’s right, at the same time ICMA performed its operational assessment of the fire department, it did one for the police department, too.  We asked Police Chief Paul Rolleri for a copy of ICMA’s report on the cops, and, after checking with the City Attorney, he gave it to us.

The report contained seven specific recommendations, of which the most significant were reducing upper-level staffing by eliminating one lieutenant’s and two sergeants’ positions; reorganizing the detective division; establishing a public-private partnership to operate the animal shelter, and closing the jail.  In response to our follow-up question, Chief Rolleri reported that the police department had taken all but two of ICMA’s recommended actions.  (It did not move to 12-hour shifts or to leasing rather than buying vehicles).

The effect of following ICMA’s suggestions was to reduce the City’s police department expenses significantly.  (According to the annual staff budget reports, the changes produced $1.3 million in savings in Fiscal Year 2011-12 and $1.181 million in FY 2012-13).  We can only wonder how much the City would have saved had the Gilmore administration heeded the ICMA’s recommendations for the fire department as well.

And finally, the next time former or current firefighters’ union officials sneer at the ICMA report, we’d like them to explain exactly what it is they don’t like about ICMA’s staffing recommendations.

According to the ICMA report, the City should “restructure the department with 78 station personnel, a chief, two deputy chiefs, and five captains, for a total of 86.”  As it happens, the fire department currently is authorized to employ 18 fire apparatus operators and 48 firefighters, plus an additional six firefighters paid for with a SAFER grant, for a total of 72 “station personnel” below the rank of captain.  But it is also authorized to employ, in addition to a chief, a deputy chief, and three division chiefs, a total of 21 fire captains.

If we’re reading the ICMA report correctly in the context of actual staffing levels, we don’t see a recommendation by the consultants to reduce the number of boots-on-the-ground firefighters.  What we see is a recommendation to reduce the number of bosses.  And it goes without saying that carrying 21 captains on the payroll costs the City far more in salary and benefits than making do with five captains would.  Surely, IAFF Local 689’s objection to ICMA’s staffing recommendations can’t be grounded in a desire to protect its highest-paid members.  Can it, Captain DelBono?

These are all questions that should have been asked, and debated, when ICMA originally issued its report.  But after the firefighters’ union’s slate – Marie Gilmore, Rob Bonta, and Lena Tam – took office, the report got shelved.  Michele Ellson of The Alamedan reported that she asked City Manager John Russo about whether the City had looked into the ICMA’s recommendations and if not, why not.  Deputy City Manager Alex Nguyen replied that the report never went to Council for its consideration or review.  “There are some minutes that reflect comments about the study, but again, no actions and no full staff report given,” Mr. Nguyen told The Alamedan. “I cannot speak as to what the former administrations’ intentions were or the reasoning behind their actions – or lack thereof.”

Well, we could venture a guess.  Nevertheless, as Vice Mayor Matarrese and Councilwoman Ashcraft pointed out, the ICMA report is probably out-of-date in the light of the development that has occurred, and has been planned, since then.  But the issues it raises cannot be brushed off as disdainfully as the firefighters’ union would like.

Maybe the City could put a copy of the report in the lobby of the new EOC for public reference.  We wouldn’t want to risk putting it in the main library, though.  Despite having once touted that building as “being designed to last 100 years,” Mr. Haun warned Tuesday that it “will fall 3.5 inches straight down” when the Big One happens.


Transfer of excess bond proceeds: 2014-02-20 staff report to Successor Agency re tax allocation bonds2014-10-21 staff report re tax allocation bonds

May 19, 2015 staff report: 2015-05-19 staff report re FS3 construction contract

ICMA report (fire): ICMA Report

ICMA report (police): ICMA POLICE REPORT

About Robert Sullwold

Partner, Sullwold & Hughes Specializes in investment litigation
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5 Responses to In the event of emergency, break ground

  1. Steve Gerstle says:

    Could these funds have been used to make pedestrian safety improvements in the Webster Street area?

  2. notmayberry says:

    Could these funds have been used to repair sidewalks outside the Webster Street area? [i.e. on side streets around Park Street?]

    • They could have been used for sidewalk repairs in the Park Street business district, which the map shows encompasses one block on either side of Park Street from Blanding Avenue to San Jose Avenue.

  3. Irene says:

    Your analogy to the theater is fitting. Just like the emergency operation center and Station No. 3, the theater and garage were originally on separate planning tracks. Suddenly one day the two projects were combined. Even though the latest parking study advised against placing the garage there and the Park Street Streetscape and Town Center Project recommended Oak Street for bicycles and pedestrians, the majority of the city council voted to move forward with the combined project.

    The parking structure feasibility study recommended that a parking garage be built behind the Elks Club with the main entrance and exit on Lincoln Avenue–an established traffic corridor. The downtown vision task force agreed.

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