Author Archives: Quené

A Good Gaveling

Congratulations to our very own Mary Fitch, who at the February 4 City Council meeting became the first person in our collective memory to be gaveled down while speaking from the podium, without so much as a polite throat clearing by the Mayor, much less a verbal request to wrap up!

Now, you might not think being gaveled down is something to celebrate, but in this instance, we sure do! Since Mary’s only offense was to speak a few seconds beyond her three-minute limit, we cannot help but find humor in the fact that Mayor Scott Gruendl felt compelled to use a hammer, rather than a gentle nudge, to tell Mary to wrap things up. And then, as if that were not enough, he busted his cool and scolded her, ending by saying, “That’s enough” and pounding the gavel a second time.

Here is the video clip – well worth a watch: Mary Gets Gaveled

As a reminder, each of the three of us behind Truth Matters, Chico! was employed by the City of Chico for over a decade. Counting two Council meetings per month over the course of my own 14+ years’ experience, that would amount to over 300 meetings during which I cannot recall a Mayor ever using the gavel as a way to say “time’s up.”

It is a rare circumstance, indeed, for the gavel to be used for anything other than procedural matters such as calling the meeting to order, closing a hearing, closing a public comment period, and adjourning the meeting. In those rare instances when the gavel is used to restore order, it is typically when an audience member is being disruptive and does not calm down after being verbally cautioned. In fact, I have witnessed many back and forth arguments, with raised voices, between speakers at the podium and councilmembers without the gavel being used.

So, Mary must have drastically taken advantage of her allowed speaking time to be gaveled down, correct? Nope. Mary exceeded her allotted 3 minutes by exactly 18 seconds (likely the equivalent of two sentences).

For an earlier post that I worked on, I did an accounting of speakers from the Business from the Floor section of the agenda. I pulled data for a year’s worth of meetings. From that information, I can tell you that on average, one person per month will speak at Business from the Floor for longer than 4 minutes. I also have documented speakers that exceeded 6 minutes.

But instead of looking at historical data, let’s just examine the remainder of the February 4 meeting…

As indicated above, Mary was abruptly gaveled down after 3 minutes and 18 seconds of speaking. Later in the evening, another speaker spent a total of 6 minutes and 41 seconds at the podium without the Mayor picking up the gavel. 3:18 = Gavel. 6:41 = No Gavel.

In the interest of full disclosure, and because it adds to the story, the citizen spoke for 3 minutes and 35 seconds before the Mayor respectfully interrupted, asked the speaker to wrap up, and then apologized. The speaker went on to talk for another 49 seconds before the Mayor again spoke up, APOLOGIZED AGAIN, and politely asked the speaker to finish. The speaker continued, and finally asked the Council to answer a question. There was a bit of back and forth and then the speaker continued on, providing some documentation in support of his concerns, for more than an additional 2 minutes. Total time 6 minutes and 41 seconds. No gavel.

The Chico News & Review even picked up on this oddity in an article published February 6. The article reports, “Rather than giving Fitch the gentle warning provided to most speakers who exceed the three-minute time limit, Gruendl abruptly ended her comments by slamming his gavel.”

Hmmmm, must have been something she said.

Let me take this opportunity to say, “Shame on You, Mayor Gruendl,” for allowing your emotions to override proper protocol and common courtesy, for discriminating against your constituents based on your personal opinion of what they have to say when addressing the Council, and in general for behaving like a petulant bully while cowering behind the shelter of the dais. Shameful.

We thank you for your continued readership and welcome your comments and questions. Nothing we do makes any difference unless we can get the citizens and taxpayers involved.

Remember: Truth Matters, Chico!


Status Update

Hello readers! Do you have your snacks ready for the big game tomorrow? Denver Broncos versus the Seattle Seahawks – should be a great game!

We gals at Truth Matters, Chico! have been staying busy in our personal lives, which has led to fairly sporadic bursts of activity in our little grassroots effort. We wanted to give you a quick status update, including a bit of trivia about us that might surprise you and a glimpse of what we will be addressing in the coming days.

First, the trivia!

Every now and then, we like to reminisce about how we were transformed from long-term City of Chico employees to regular folks writing blog posts to expose the truth about what happened behind the scenes at City Hall over the past few years and what is currently happening to our beloved Chico under the Nakamura administration. Our identity as Truth Matters, Chico! is now so firmly entrenched that we often forget this was never our intention. When we first addressed Council as former employees, we never would have dreamt that we would be creating a website and becoming local government watchdogs. Creating was not even a twinkle in our eyes.

Our original intent was just to address Council a few times and be done with it. In our (then) naïve minds, we thought the Councilmembers surely must not have been aware of the lies the new City Manager Brian Nakamura was telling; otherwise, wouldn’t they have been doing something about it?? So, we went and told the Council about the lies that could be documented as such, only to quickly discover that there was no interest in hearing the truth if it tarnished the overarching political agenda.

The Council (less Ann Schwab and spear-headed by Mayor Scott Gruendl) began attacking us both personally and professionally from the dais and through the media, in the form of Facebook rantsinterviews to the print mediainterviews to the local news media, and press conferences. When that was their reaction, we realized to what lengths we were willing to go to continue to speak truth and share our knowledge with the community. As you may have realized by now, we are not ones to shy away when confronted by political intimidation; rather, the idea of elected officials using their bully-pulpit in such a brazen attempt to shut us up was so appalling that its effect was to inspire us to broaden and intensify our efforts.

Thus was born Truth Matters, Chico! We have said from the beginning that our agenda is apolitical. No one is exempt from our examination of the facts and our search for the truth. We wanted to share this history with you to provide further clarity about where we came from and why we make the time to research and share these posts with you.

Those of you on the Council who hold your political agenda in higher regard than the truth, you have only yourselves to thank for our ongoing proactive approach to local government goings-on. And we thank Councilmember Schwab for her consistency in asking tough questions and speaking her truth without regard for political fallout.

Now for a preview of upcoming posts.

The Council gave a presentation regarding the “State of the City” on Thursday, January 30. While none of us was in attendance, we are reviewing the video posted by the Chico Enterprise Record, and are compiling our thoughts to put into a group post. Some very serious allegations were made, and we will be responding as appropriate.

A number of our readers have asked about our thoughts on the new garbage franchise the city is proposing. City staff provided a copy of the Request for Proposals (RFP) in the agenda packet for the January 28 Finance Committee (no staff report was included), and we were able to obtain a copy of the consultant’s presentation. We are reviewing both documents, and Mary is working on providing an overview of the RFP as well as potential issues that could result in financial impacts to the rate payers. Look for this information to be posted in the next few days.

The agenda for the upcoming February 4 Council meeting was also recently posted. We are reviewing the agenda and staff reports and will share any items of interest with you by Tuesday morning, but hopefully sooner!

We thank you for your readership and for continuing to share our posts with others. As always, we welcome your questions and comments.

Remember: Truth Matters, Chico!

Additional Annexation Thoughts

Kudos to members of the Chico City Council for sticking to their guns and standing strong against the bully Local Area Formation Commission (LAFCo) on January 21! Instead of breaking and bowing to LAFCo’s threatening letter, you stood up for your constituents by directing your staff to work towards finding an alternate solution. Granted, Mayor Scott Gruendl sounded wishy-washy when he talked himself out of supporting LAFCo (at least that was my take); but all seven of you did end up voting correctly. How refreshing!

Last Tuesday, in the rush leading up to the Council meeting, we provided the Council with information about the history of the LAFCo issue that was conspicuously absent from Nakamura’s staff report. We then shared it with you in the post, Chapman, Mulberry and the LAFCo Stick. Now that the pressure is off, here are some additional thoughts about the City’s position on the annexation debate.

Before expounding further, I want to be clear that none of us at Truth Matters, Chico! has a horse in this race. We have no enduring loyalty to the City’s policies, and none of us lives in an unincorporated island within the boundaries of Chico’s Sphere of Influence.

Having established that whatever the outcome of this debate, we will not be personally impacted, following are some additional technical and historical data, as well as points of general information (and some opinions) for you to consider.

Disenfranchisement? – LAFCo has repeatedly accused the City of disenfranchising the residents of the Chapman Mulberry area, which LAFCo’s Board and staff consistently label a “low rent” district. The facts, however, do not support the claim. The City has also chosen NOT to annex the areas of El Monte Avenue and Chico Canyon Road, notably two of the most “high rent” districts in Chico’s Sphere of Influence.

Want to be annexed? – While annexation proceedings can be initiated by the City, there is absolutely nothing preventing any property owner from submitting an application for annexation. In fact, when a resident submits an application for sewer service, there is an opportunity to indicate interest in being annexed concurrently with sewer connection. So, if someone personally feels disenfranchised by living in a County pocket, the solution is as simple as going to City Hall and submitting an application! In fact, the required forms are provided on the City’s Planning Department website. Here are the links to the application for annexation only or the application for annexation with sewer connection. Disenfranchisement? I think not.

How does the City or Council know what their constituents want? – The City proposed, and the Council approved, the idea of initiating annexation proceedings for a County pocket upon receipt of 50% plus one requests for sewer hookup. One of the great things about that proposal is it operates as an informal survey. If every time the City receives an application for sewer service, it asks the applicant to indicate whether or not there is an interest in annexing the property, and/or to sign a Consent to Future Annexation to obtain the sewer connection, then obviously the data to determine whether property owners in a County pocket are ready to annex is being collected. Can you think of a better way?

Condition of infrastructure in County pockets? – There has always been a lot of back and forth between the City and County regarding infrastructure in County pockets. What I can attest to as documented truth is the Overall Condition Index (OCI) of the City’s streets, how that number was negatively impacted by the many annexations that have already occurred, and how that number will be further negatively impacted when the remaining County pockets are annexed.

One of my responsibilities as a City employee was the Pavement Management Program (PMP), which kept an eye on the overall condition of the City’s roads and prioritized repairs based on taxpayers receiving the most bang for their bucks. (There is a point of diminishing returns when it comes to road repairs.) Please bear with me – I am trying to not get too technical here, but this is important!

The PMP assigns a Pavement Condition Index (PCI) to sections of roadways by taking into account multiple variables. This data goes through a complex mathematical calculation, via a computer program, and produces a number between 1 and 100 (where 100 is perfect and 1 is completely failed), which identifies the “condition” of the pavement in each section of roadway. All of the PCIs combined determine the OCI – ultimately assigning one number to establish the quality of Chico’s pavement.

Before Chico annexed approximately 7,000 acres of County pockets, its OCI was in the mid-70s, in the Very Good category. After those annexations occurred, Chico’s OCI dropped to the high 50s, the mid-range in the Good category. While I was managing the PMP, we decided to survey all road sections in the remaining County pockets, so we would be prepared to add them into our road maintenance program upon annexation. This survey informed us that Chico’s OCI would take an additional hit, putting Chico’s roadway network at the higher end of the Poor category.

Sales Tax Agreements? – It is difficult to discuss the existing Sales Tax Agreements between the City and the County without sounding overly opinionated; so I will limit my comments to the fact that the Agreements do exist, and in my opinion, it would be imperative that these Sales Tax Agreements be revised or eliminated upon annexation of all County pockets within Chico’s Sphere of Influence. Unfortunately, since both the City and County are parties to the Agreements, both agencies would have to agree to a renegotiation of the terms.

LAFCo staff has been working with City staff for years without resolution? – I can attest to LAFCo’s assertion that it has been working with City and County staff for two to three years, attempting to resolve the annexation issue. Mind you, the term “working with” is being used very loosely. Meetings had been occurring; however, in my experience, for about the first year plus some months, LAFCo staff would brainstorm with City and County staff and agree to proposed solutions, and then make a 180-degree turn at their Board meetings. LAFCo staff would repeatedly blindside both City and County employees with unexpected declarations, and would provide agreements and/or other documentation to the LAFCo Board that had not been shared with the other impacted parties.

The LAFCo Board and staff also had a very different view of the sewer connections permitted within County pockets. The City and County had been working together for years in an effort to assist property owners in complying with the Nitrate Abatement Order (linked in my previous post), which required abandonment of individual septic systems to reduce the impact of nitrates on the groundwater, without imposing additional financial burdens such as forced annexation.

LAFCo, on the other hand, wanted to use the sewer connections as a “stick” to enforce annexations. Both the LAFCo Board and staff publicly stated that if the City allowed property owners to connect to sewer service without annexation, property owners would have NO OTHER REASON TO ANNEX. Not to receive local police service. Not to have drainage issues resolved. Not to have roadway upgrades completed by the City. Not to be included in the street sweeping and leaf pick-up programs. Not to vote on local issues. Did you get that last point? LAFCo believes those property owners don’t care about the ability to vote; they just care about getting that sewer connection! So much for disenfranchisement.

What else might the community not know? – Did you know that only parcels that are already developed can be connected to sewer without annexing? Any new development within a County pocket would require annexation in order to connect to sewer, which would bring in all other adjoining parcels – likely at the developer’s cost – to receive City services and infrastructure. In fact, there are a few undeveloped parcels of land in the Chapman Mulberry area that were discussed in meetings between the City, County, and LAFCo. In addition to an initiation of the annexation process at 50% plus one sewer connection, annexation would also be initiated by any new development.

Thanks for letting me spout off on this LAFCo business; I’ve needed to get it off my chest for some time now. That said, I hope it brings some additional enlightenment to those interested in, and/or potentially impacted by, the annexation debate.

If you have specific questions regarding this or any other topic we write about, please always feel free to email us if you do not want to publicly comment on the post. Odds are, if you have a question, someone else might have the same question. Letting us know gives us an opportunity to further explain anything that seems clear to us but muddy to you non-bureaucrats. Among the three of us, there is a lot of information and specific data floating around in our heads that we may not realize is important or interesting until someone asks!

So if you have a question, bring it to us! We love hearing from our readers. And, we love it when our readers share our posts with their friends, families, acquaintances, mortal enemies…whomever!

Thank you for continuing to follow us and never forget:

Truth Matters, Chico!

Chapman, Mulberry and the LAFCo Stick

As mentioned in our Council Meeting post this morning, one of the items the Council will be addressing this evening relates to the Local Agency Formation Commission attempting to compel the City to annex certain unincorporated islands, including among others the Chapman and Mulberry neighborhoods. Conspicuously absent from the staff report is any mention of the historical context of this issue prior to August 2013. Once again, the ‘rightsizing out’ of institutional knowledge has led to incomplete information for the Council.

Since the history is critical to understanding what is at the core of this disagreement, we at Truth Matters, Chico! compiled some relevant documents (with the help of some ‘friends’) and forwarded them to the Council and staff this afternoon. Depending on the outcome of tonight’s discussion, we may delve more deeply into this issue to further enlighten the new Executive Team.

Following is the text of my email:

Upon reading the Staff Report for tonight’s LAFCo item, containing the most recent letter to the City of Chico, I thought it might be helpful for your discussion if I provided some additional historical information for context. Although some of you may already be aware of this, those of you who are new to the Council may not. Since Mr. Nakamura’s letter contained in the agenda report thanks Mr. Leverenz for the historical timeline, and contains no information prior to August 2013, I can only deduce that there is no one remaining on your staff with the institutional knowledge to provide the City’s perspective.

One important point that should not be ignored is what sparked LAFCo’s interest in this new round of annexations: the Regional Water Quality Control Board’s Nitrate Abatement Order affecting properties currently on individual septic systems. This Order directs each parcel owner, NOT the City of Chico, to connect the property to a sewer service and abandon septic tanks. While the City must provide the infrastructure necessary for the property to be in compliance, the onus for complying with the Order lies with the property owner.

LAFCo has consistently chosen to disregard the health and safety issues surrounding the Nitrate Abatement Order, choosing instead to focus on its goals, and the potential revenues involved in processing the annexations, without regard to financial and other impacts to property owners. LAFCo is using sewer connections as a “stick” to force Butte County residents to annex into the City of Chico.

I am attaching the Nitrate Abatement Order, as well as a few other documents that will provide additional history regarding steps your former staff took to resolve this issue with LAFCo. I hope it will provide additional insight for your discussion tonight.

Best Regards, Quené

Here are the documents that were attached to the email:

Nitrate Abatement Order

LAFCO Hearing summary 01-07-2011

Annexation Plan Council Report 08-03-2012

LAFCo Follow-up Letter 08-06-2012

This is an important subject for anyone living in the unincorporated islands of Chapman, Mulberry, Forest Avenue, East Lassen Avenue, El Monte Avenue, and Chico Canyon Road. While there are many benefits to being annexed to the City, there are also detriments and costs that should be considered. Please share this post with anyone you know who lives in the impacted areas, so they will be aware of what is at stake.

Thank you for your readership. As always, your questions and comments are welcome.

Remember: Truth Matters, Chico!

More Performance Evaluations

(Before reading further – please bring to mind your early childhood memories of Sesame Street, and, in particular, the wonderful character and voice of The Count. Count von Count!)

This week’s City Council meeting is brought to you by the number 10. As in 10 performance evaluations for City Manager Brian Nakamura. Ah ah ah!

That is right folks; January 7 Closed Session is scheduled to be the tenth performance evaluation since Nakamura joined the City of Chico in September 2012. As we mentioned in a prior post, where we first asked the question Is Council Abusing Closed Session Exceptions, Nakamura’s contract with the City only calls for an annual performance review. His first evaluation was to occur in April of 2013, with follow-ups to happen every year thereafter as long as he maintains employment.

Instead of an annual performance evaluation, Nakamura is coming up on his tenth in 17 months. 10 in 17! Ah ah ah!

In following up with what was also mentioned in the prior post linked above, the Council has yet to make any announcement on actions taken during these Closed Sessions. Ten performance evaluations – but Chico, the Council has nothing to report to you! Ah ah ah!

I can’t speak for The Count, but I do have to wonder myself how many evaluations will Nakamura receive before he leaves town?

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!


Remedial Funding

It looks like Public Works Director Ruben Martinez is playing pin the tail on the fund list to choose funding sources again. We think he should remove his blindfold and try reading the Fund Summaries for allowed uses, but that is just our opinion. Maybe he needs a remedial budgeting class. We can only speculate about how he is coming up with the funds he has been proposing.

One thing is for sure; whatever method Martinez is using, it’s not working for him, or the taxpayers. Municipal finance rules are there for a reason, and it is clear he does not understand them.

We have already described to you his lack of knowledge of Fund 400 (Capital Projects), as well as his inappropriate use of Fund 850 (Sewer). At the November 19 City Council meeting, I will be pointing out yet another misuse of City funds by Martinez. The fund being negatively impacted this time is Fund 312, the Remediation Fund.

A few days ago, we shared the agenda for this City Council meeting. Item 2.2 of the Consent Agenda is a request for a supplemental appropriation to allocate $25,000 from Fund 312 to remediate a mold problem at Fire Station No. 5. The City is looking into whether or not its insurance policy will cover the cost of the project; but even if it is covered, the $25,000 request is still proposed to pay the City’s current insurance deductible.

(As an aside, our resident insurance expert, Mary, says there is no way this is a covered loss. Mold is a maintenance problem, specifically excluded in standard property insurance policies. She also asks a couple of thought-provoking questions: If the total cost of the project is $25,000, why are they even checking with the insurance company? On the other hand, if the project cost exceeds $25,000, why are they only asking for $25,000 to remediate the problem? If you are interested, you can read more about mold remediation and insurance here.)

I mentioned above that Fund 312 is the Remediation Fund. Does that mean it pays for any and all remediation projects? Nope. It was created to pay for groundwater remediation, primarily at the Chico Municipal Airport.

There is some important history regarding this Fund. (I am about to get highly technical here; please bear with me. I will try to limit it to a paragraph or two!)

Back in the early 1990s, the State of California Department of Toxic Substances Control (DTSC), sued the City of Chico, and more than 15 others who owned properties in the vicinity of Chico Municipal Airport, for groundwater contamination. Previous military and industrial activities that occurred sometime between the 1940s and 1980s resulted in the release of hydrocarbons and volatile organic compounds (VOCs) into the soil, therefore contaminating the groundwater. The primary VOC identified as a concern was trichloroethylene, most commonly referred to as TCE. In case you are interested, TCE is a chlorinated hydrocarbon commonly used as an industrial solvent. (In laymans terms, it was a great degreaser!)

Neither the City of Chico nor most of the property owners included in the lawsuit were directly involved in the release of TCE into the groundwater; however, as they are now the owners of the property where the problem exists, they were named as responsible parties. I am going to skip discussing the many steps of the lawsuit to get to the important part – a Consent Decree was placed on the properties, requiring groundwater remediation, and a Settlement Agreement was established to pay for the expected remediation. All of the parties listed in the lawsuit had to pay into the Settlement Agreement, and because the City of Chico was the local municipality and owner of the Airport, the City was listed as the Responsible Party for the cleanup and was given the Settlement Agreement monies to cover necessary work.

Fund 312 was created using the monies from the Settlement Agreement. While other monies have since been transferred into Fund 312 from Fund 850 (Sewer) to pay for groundwater remediation projects at other locations, the remainder of the money is clearly dedicated to remediation of the properties identified in the Consent Decree whose owners paid into the Settlement Agreement.

The Fund Summary for Fund 312 describes many of these important details; it specifically states that the use of the Fund is restricted, and it states that the authorized uses for this Fund include only capital and operating expenditures related to groundwater remediation. The Fund Summary concludes that “The City contemplates that Chico Municipal Airport remediation will continue for decades, therefore, use of these funds is committed to this purpose.” Can it be more clear?

Also important to note is the sentence directly before what I have quoted above: “…liability of all other parties is limited to monies already provided in the settlement.” To be clear, if the monies in Fund 312 run out, the City will have to find alternative funding sources until the remediation is complete – a decision that DTSC will make. The Consent Decree was issued by a U.S. District Court and is legally binding.  If Fund 312 is depleted, the City cannot just say, “Oops, guess that project is done.”

Let’s go back to Martinez’s funding request for mold remediation at Fire Station No. 5. He is asking the Council to allocate $25,000 from Fund 312. Mold remediation is not an allowed use of Fund 312. Period.

It is curious that the Municipal Buildings Maintenance Fund isn’t being charged for this project. If staff and Council do not want to charge the Municipal Buildings Maintenance Fund, at the very least, would this not be a cost of the Fire Department (100% General Fund)? After all, it is a Fire Station being impacted.

One thing is for sure, use of Fund 312 to pay for mold abatement at a Fire Station is inappropriate. If this funding request is approved without changing the proposed source, it will be just one more indication that this Executive Team and Council cannot be entrusted to make the right decisions regarding our City.

Thank you for your continued readership. As always, your questions and comments are welcome.

Remember: Truth Matters, Chico!


Missing Our New Posts?

While we have great intentions of uploading a new post at least every other day, life happens and we get behind!

For those of you who check our website every day to make sure you do not miss anything from us (I love how dedicated you are!), did you know that you can receive notifications of new posts by following us on Twitter (@Truth_Chico), on Facebook (Truth Matters, Chico), or even by following this page?

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How awesome is that?!

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Public Works Director Strikes Out Again

It is unfortunate that we were unable to attend the October 15 City Council meeting, as I would have preferred to address this topic before Council approved the use of sewer funds to repair roadways in one of the local nitrate areas. While recent Council actions lead me to believe nothing I could possibly have said would have changed their minds, it still would have been preferable to publicly remind them of appropriate and inappropriate uses of funding sources, considering how budget-challenged their new Public Works Director, Ruben Martinez, has proven himself to be.

In an earlier post, I discussed how in my opinion, Martinez should not be relied upon for either financial analysis or budget decisions. Now, I have another example of his statements that backs up my opinion of his finance-related skills. (Or lack thereof!)

Martinez’s Agenda Report  for the October 15 Council meeting clearly states that he recommends Council approval of a budgetary supplemental appropriation of $260,000 from the City’s Sewer Fund (Fund 850) to pay for roadway rehabilitation. His assumption appears to be that since the road work is needed in a recently sewered area, he can use leftover project funds for the necessary work.

Now we have mentioned before that Fund 850 is one of the City’s Enterprise Funds. A good way to look at Enterprise Funds is like a utility company; you pay for the service you receive. In the case of Fund 850, you pay to have the City handle your wastewater, rather than maintaining your own septic tank system. The difference between Fund 850 and another utility company is that the City’s Enterprise Fund cannot generate profit. It can only charge its customers the cost of doing business. Fund 850 is a self supporting entity; it provides a service to the public for a fee.

So what expenses should Fund 850 cover? Appropriate expenses can be broken down into three major categories: Operating Expenses such as maintenance, materials and supplies, and staffing; Capital Project Expenses not associated with new development (in which case, the developer covers the cost of building the new sewer system); and a Reserve account, which is created to ensure there will be funding available to replace infrastructure and/or equipment when necessary.

Did I make any mention of roadway rehabilitation above? Nope. Ahhh, but I hear some of you readers asking, “But what about Capital Project Expenses, Quené?” Great question – and very smart of you to catch that! If you will trust me to just make a statement without backup documentation, I would answer by stating that with Capital Projects related to sewer, the contractor is only required to replace the pavement above the sewer trench; not the entire width of the roadway. In the construction world, this is referred to as pavement replacement, and it is clearly a cost of the sewer installation; therefore, it would be an appropriate charge to Fund 850. However, replacing and/or rehabilitating the entire width of the street is not an expense of the sewer portion of a Capital Project and as such should not be paid for by Fund 850.

If you would like to see backup documentation of what pavement replacement looks like and you have an eye for construction plan details, let me refer you to Title 18R of the City of Chico’s Municipal Code. Chapter 18R.12 includes design standards, referred to as Improvement Standards or Standard Plans, and No. S-17 shows the typical details of a pavement replacement project. In comparison, the next page No. S-18A, shows what an entire street width would look like.

The final paragraph of Martinez’s Agenda Report is an outright lie. It states in part “It has been past practice to use sewer funds for roadway repairs related to sewer projects such as current projects like River Road and the West Trunk Line as it has been to previous sewerage projects…” Just when I think he cannot make a more inaccurate statement, he writes something so outrageous that I go slack-jawed.

Neither of his example projects used Fund 850 for roadway rehabilitation. How do I know this to be a fact? Well, it’s very simple, almost too simple… The River Road project is still being designed (you cannot very well spend money on work that has not even gone out to bid), and while the West Trunk Line project is currently being constructed, it was funded with Fund 320 (Development Impact Fee) dollars. This is ridiculous! A Development Impact Fee is significantly different than an Enterprise Fund.

Funding for the West Trunk Line project can be verified from two different sources on the City of Chico website – the Bid Tabulation sheet for the project and the 2013-14 Proposed Budget (not sure why they have not posted a Final Budget yet…it’s only four +/- months late).

Oh, and here is another little tidbit about the River Road project, if and when it should go out for construction. River Road belongs to the County. The City has an easement for work on the sewer trunk lines that exist in the right-of-way, but the road itself? Butte County. Period.

As anyone who lives in the pockets of County that still exist within Chico city limits knows, the City does not pay for fixing the County’s problems. In the case of the River Road project, I am sure some agreement will be made, and the County will likely trade a construction easement for roadway rehabilitation, but should Fund 850 pay for this? Absolutely not.

Just in case I still have not convinced you that Fund 850 should not be paying for roadway rehabilitation, please take a look at the Fund Summary report for the Sewer Fund (Fund 850) which can be found in the City’s Budget and is also most conveniently attached to Martinez’s Agenda Report, Attachment D, linked above. The Fund Summary specifies (on the last page) that the uses of the fund are restricted, and goes on to state that the authorized capital uses are limited to major programs, buildings and facilities, and major equipment, and finally that the only other authorized uses of the fund are for operating and debt service. Conspicuously missing is any reference to paying for roadway rehabilitation.

There is no doubt in my mind that the roadway rehabilitation work is needed in many areas of Chico; however, just because a certain Fund has available dollars does not give the City’s Executive Team the right to use them in whatever manner they desire. This is a clear misuse of Fund 850, and any misuse of funding leads to mistrust in our government officials.

Those of us living in homes on the City’s wastewater system pay our fees for maintaining and operating sewer infrastructure, not for completely unrelated infrastructure that does not benefit wastewater customers.

Martinez has struck out again!

If I have not explained any of these points thoroughly, or if you would like more details about the more technical side of Capital Project budgeting, please feel free to contact me by either commenting below or send us an email at

Thank you for your continued readership!

Don’t Forget the Revenue

Today is the last day of work for employees impacted by the latest round of layoffs implemented by the new Executive Team. There are multiple things that bother me personally about these layoffs that targeted City employees on the second floor (Engineering, Planning, and Building Divisions), but the one issue that troubles my logic-based brain the most is the lack of consideration towards the revenue side of the equation.

The new Executive Team has been placing a lot of focus on the deficit in Fund 400, Capital Projects. If I am to give them some credit, I would offer up that their inexperience and lack of institutional knowledge is the basis behind the energy expended trying to tie the Fund 400 deficit to second-floor employees. This is because those of us who have a basic understanding of how employees account for their workday and how salaries are funded, would have known to pull timecard reports to account for the Fund 400 deficit. We will discuss this in more detail in our upcoming Fund 400 post.

But what about the revenue? How can you base layoffs on the expenditure side of the equation only? In this budget-constrained era, is it not even more important to consider how and where a business obtains its revenue? If you had to look at reducing expenditures, would you not also be considering how to increase or even maintain revenue?

The City’s revenue comes from a number of sources. Revenue sources include but are not limited to Sales Tax, Property Tax, Utility Users Tax, Maintenance and other District Funds, Enterprise Funds (such as the Private Development Fund), Development Impact Fees, and miscellaneous Grants received (usually for Capital Projects).

Appendix A-1 of the City of Chico’s Budget is a section entitled Comments Regarding Funds, Revenues and Expenditures. This section of the Budget is a quick summary of the funds available to the City and gives a short description of each of the abovementioned revenue sources. If you are so inclined, you can pull up the Budget on the City of Chico’s website; Appendix A-1 of the current Proposed Budget starts on page 249. I am including the four pages of interest here – the City’s security settings on their Budget document prevent me from providing a more clear document for you.

Without getting too technical (which I have been accused of!), only the Development Impact Fees, most of the Enterprise Funds’ revenue sources, and any Grants received are directly related to work completed by employees. In fact, the only consistent direct link between revenue generation of the prior three sources and employee work efforts exists with the second floor employees (again…Engineering, Planning, and Building Divisions).

While one could argue that efforts towards economic development result in additional tax-based revenues, it is not possible to quantify a direct correlation between hours invested and additional taxes received.

This whole issue is why I told Council on October 1 that unless they want to try and fund all City operations with a limited General Fund, they must take into account which departments generate the City’s additional revenue. Instead of heeding my warning and considering the big picture of expenditures and revenue, the Executive Team proceeded with handing out layoff notices after the October 1 Council meeting to twelve employees on the second floor.

Let me be clear – – – of the 18 notices sent, 12 were delivered to City Hall’s second floor. That is 67% of the notices. The numbers are even more appalling when you consider the number of employees that exist in each department. While I will not digress on this point…just consider that in a City of approximately 350 employees, the departments/divisions on the second floor are not even in the top four for number of employees.

So today I will shake my head in wonderment, once again, at actions implemented by the new Executive Team and allowed/approved by our community’s City Council. I will take some comfort in knowing that we here at Truth Matters, Chico! will continue to do our best to speak out and document any wrongdoings we discover and I suppose I will just keep my fingers crossed that the City Council opens their eyes and ears to the big picture soon. Hopefully before it’s too late to right the ship… Which, in my opinion, is honestly almost upon us.

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