Wednesday, October 21, 2015

Discussion of Beach Budget, Revenues, and Expenses from Last Night's (10/20) City Commission Meeting

[At the top, left corner in the video is the icon "1/3". That's how you go from one video to another.]

This discussion took place at the end of the meeting and not much resulted. The one motion that was made and approved unanimously was not to consider the unsolicited public private partnership proposal, or any proposal, until the Commission has a better understanding about the needs at the beach, both operationally and, in the case of the Casino building, structurally. The City would then go out to the public and confirm those needs and conditions and look for possible solutions. You can hear the motion made by Vice-Mayor Maxwell and seconded by Commissioner Amoroso at the 20:30 mark of the first video.
The most glaring item in the report is the promised payments of $500,000 each year to repay the loan that were not made. Include those numbers and the beach fund goes deeply into the red. More on these numbers at a later time.
Above is some of the back-up prepared by the city manager that occupied a lot of time last night. Burton and Associates was there last night so that individual parts of this budget could be changed and you could see how that affected all the other numbers, throughout all the years. 

Commissioner McVoy had some interesting arguments, trying to prove that things at the beach are better than they seem. He seemed to hinge most of it on the $500,000 received in 2014 that closed out the County's grant to the City for work at the beach. That money should be reflected elsewhere since it really is for refunding capital expenses made during the renovation. It's not part of the revenue stream from operations. 

In the second video of the playlist, McVoy has a conversation with the finance director where he shows his confusion regarding what is an asset and a liability versus what are revenue and expenses. That begins around the 16:30 mark.

If we are including the $500,000 as revenue then where is the $1.4 million settlement to Greater Bay? Why isn't that money shown as an expense? Where did that money come from and is that being paid back? Or the $900,000 in legal fees to defend the city?

Expect more on this in the future. It was reiterated last night that the budget was approved with the expectation that the beach fund would be reviewed within a six month period after October 1st. In the meantime, it didn't seem like the City had any appetite to discuss the problems with the building due to the pending litigation, however, we are going to have to deal with those issues at some point. Plus we have to deal with the empty space on the second floor, the low revenue from the pool, the dependence on parking revenue to keep the Casino operational and a host of other issues. The big question remaining is. . .When?