Update: Remedial Funding

Welcome to members of the Chico City Council who are reading our website! We always knew you would eventually, since it’s the politically astute thing to do — keep an eye on those speaking out in opposition to you — but this past Tuesday’s Council meeting was the first time we received clear confirmation that at least some of you are following our posts.

You addressed nearly every point in my original Remedial Funding post before opening the floor for public input; effectively heading off at the pass any comments we were prepared to make. Recognizing that you aren’t getting sufficient information from your Executive Team is the first step toward better decision making, and we applaud you for that.

For our readers who were not in attendance at the meeting or unable to watch the meeting streaming live, here is a video clip of the discussion on the Consent Agenda Item 2.2, a request for a supplemental appropriation to allocate $25,000 from Fund 312 to remediate a mold problem at Fire Station No. 5. The video is approximately 21 minutes long, but it is definitely worth a watch. The Council was finally asking tough but appropriate questions, and the staff was clearly unprepared to answer them.

Public Works Director Ruben Martinez and Facilities Manager Kim Parks should be embarrassed about their inability to answer Council’s questions and ashamed to have requested funding from a source about which they clearly have no knowledge. Had I still been on staff, and responsible for this project, I assure you I would have been prepared to answer any questions that could arise from a staff report (especially one that I drafted!) and would not have needed to defer to the City Attorney regarding proposed funding and the impacted project. I mean, really, is it the City Attorney’s job to answer project-specific or funding source questions? Absolutely not!

Now, back to the Councilmembers: Your decision was wrong. While the mold remediation needs to occur, and quickly, use of an inappropriate funding source is still not acceptable. In my original post, I even told you which funding source should be used. I cannot comprehend why you did not simply vote to approve proceeding with the mold remediation, but directing staff to use a different funding source.

Both the Public Works Director and the Facilities Manager should be familiar with Fund 930, the Municipal Buildings Maintenance Fund. Furthermore, Accounting Manager Frank Fields was seated at the dais during the meeting; his job description surely requires him to have the ability to answer questions about funding sources. That entire question and answer session was ludicrous; where are the competent staff? The answer, of course, is they were ‘rightsized’ out the door. Pathetic.

I am no longer paid by the City to provide technical analysis regarding programs or projects. And I intentionally did not get into specifics on the Chico Municipal Airport (CMA) Groundwater Remediation Project in my original post, because I wanted the funding source issues surrounding the Fire Station No. 5 mold remediation to be its focus. That said, it appears that someone other than the City’s current staff will have to provide guidance regarding the CMA Groundwater Remediation Project as it relates to the use of Fund 312 monies, and I guess that someone will have to be me…

Here’s my advice: Handle the CMA Groundwater Remediation Project with extreme care.

The State of California Department of Toxic Substances Control (DTSC) is the City’s oversight agency. Any changes in its management or staff can result in additional expenses. As we have seen recently within the City, loss of institutional knowledge in an agency can lead to unforeseen problems, and reinventing every wheel can be costly. It has already happened once with DTSC staff and the CMA Groundwater Remediation Project, and it can certainly happen again.

Additionally, if the newly approved Revised Remedial Action Plan results in activation of the City’s Contingent Remedy, there will be additional active groundwater extraction and treatment wells required to achieve the Remedial Action Objectives. This may seem insignificant, but keep in mind that the CMA is surrounded by environmental concerns — specifically vernal pools and Butte County Meadowfoam (BCM).

When I last calculated an estimate on the CMA Groundwater Remediation Project for takes of BCM, the anticipated value was 19:1. That means for every one acre of BCM impacted, the City will be responsible for the cost of 19 acres’ worth of environmental impact. I can say with some certainty that this ratio will not get better; BCM continues to be an environmental concern that is becoming more and more difficult to offset, due to a lack of available environmental credits.

Well, I hope I did not put our readers to sleep with that! It is important to both understand and acknowledge the big picture when considering what responsibilities the City has for each project and how each project impacts total funding availability. Funding decisions should never be made in a vacuum.

The $25,000 appropriation from Fund 312 to pay for mold remediation at Fire Station No. 5 may not seem like a big deal, but every little bit adds up. As with any budget, a few dollars here, a few dollars there, and suddenly you have spent more than what you have.

As the City Attorney mentioned during the Council meeting, Fund 312 has already been used to pay for lead remediation at Horseshoe Lake. The Public Works Director has continued to attempt to tap Fund 312 to pay for the required ongoing monitoring and reporting of that cleanup. I would opine that Horseshoe Lake being charged to Fund 312 was either the result of someone’s lack of knowledge of funding sources or someone simply picking the low-hanging fruit instead of doing what was necessary to fund the project appropriately. That certain someone succeeded because the project was approved for funding without consulting with Capital Projects staff, and it did not become apparent until after the money had already been spent.

Here is a fact to digest: Had the CMA Groundwater Remediation Project not been able to use Redevelopment funds for a number of years, all settlement funds received under the Consent Decree and used to create Fund 312 would have already been expended. That is correct; Fund 312 would have a zero balance, and the City would have already been required to find alternative funding sources to continue this State-mandated work. This over-expenditure is not the City’s fault; the original Remedial Action Plan required remediation on a parcel of land not included in the Consent Decree (and please take my word that this was a huge and costly issue).

The point remains, even if Fund 312 had been completely restricted to use on the CMA Groundwater Remediation Project, all revenue would have already been expended. No one could be proposing to use Fund 312 for mold remediation anywhere.

You can see this by comparing the Capital Project page for the CMA Groundwater Remediation project and the current Fund Summary for Fund 312. I have highlighted the areas of interest. If you calculate how much Redevelopment money was expended on the CMA Groundwater Remediation Project ($564,194 + $18,898 + $765,381), you come up with $1,348,473. Compare that total to the $774,045 that was available in Fund 312 at the beginning of the current fiscal year. You see that expenditures have already exceeded what was available from the Settlement Agreement funds.

Yep, if Redevelopment funds had not been used, Fund 312 would be running a deficit of $574,428 ($774,045 – $1,348,473). And, as acknowledged by the City Attorney, the Fund Summary states in part that, “…[the] Chico Municipal Airport remediation will continue for decades…”

But barrel on ahead, Council! Approve inappropriate spending from Fund 312 based on an opinion written by an employee that retired more than seven years ago, with no updated financial analysis of the impacted project. Do it, because that is just brilliant!



Posted on November 22, 2013, in Budget, Meetings and tagged , , , , , , , , , . Bookmark the permalink. 8 Comments.

  1. Send in the clowns….

  2. Numbers are Key. Please continue to provide numbers backing up these revelations. Citizens don’t seem to mind until the balance sheet screams bloody murder. What’s to make up for this imbalance of the project goes through? Will there be unforeseen costs via attorneys and staff time to re-allocate resources? If this fund is to be used solely for the costs outlined before, is the City in violation of some statute?

    This reminds me more and more of Social Security: Oh, hey, there’s money here! We can spend that on what we need to do instead of levying taxes! Let’s just do that and slip a couple IOUs into the slot. Generation B will understand why Generation A “had” to do it!

    • Generation B doesn’t get Social Security! 😉

      But I digress…thank you for the note! Providing the numbers on this project/issue was so obvious that I am appalled the City’s Executive Team didn’t find it necessary to address the problem when members of Council were asking them about it during the meeting. I hope our readers found the highlighting of the important numbers in our attachments helpful.

      • The problem with meetings is that not everyone with a stake in the game attends them. I applaud you guys for sitting through all the B.S. just to reach the public comments section of these meetings and for helping to make the Public’s voice be heard. Don’t ever give up. Don’t ever quit. Leave no stone unturned. Eventually, the gravity of your diligent research will bring the greater public to this site and to the truth.

      • Thank you! I personally love receiving feedback like this… It is a great reminder of why we started our little grassroots effort and it helps me to continue expending the energy especially during those times when we are taking on more than our fair share of the heat.

        Thank you for being a faithful reader and for your intelligent comments!

      • “Leave no stone unturned.” Ha! Timely comment, since the other topic this week was the “esteemed” Councilmember Stone.

  1. Pingback: Thanks again to Truth Matters – Brian Nakamura Jones and the Raiders of the Cookie Jar | Chico Taxpayers Association

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