Riverside County Grand Jury • 2009-2010 • Agency Response

Banning Response*

Published: May 19, 2010 122 pages
Ver PDF original

Findings and Recommendations 9 findings

F1
Was Included In The Official Statement. Investigation Revealed That The Redevelopment Agency Board Had Not Formulated Detailed, Prioritized Plans For Use Of The Proceeds." The Bond Offering Statement for the $24M Bond Issue in 2007 indentified three areas for the expenditure of the bond proceeds, and allocated funds in equal portions: (i) Revitalization of downtown, (ii) Economic incentives for development of private industrial or commercial projects to generate jobs and tax revenues, and (iii) Public improvements needed to improve public health and safety, make private development more feasible, and alleviate blight. Potential projects were indentified under each of these areas. Specifically, the Offering Statement provided: "The Bonds are being issued to provide funds for redevelopment activities of the Agency, to fund a reserve fund for the Bonds and pay the expenses of the Agency in connection with the issuance of the Bonds, including a bond insurance premium.... The Agency anticipates expending the proceeds of the Bonds on the following projects, but may substitute other projects. Response to Grand Jury Report Community Redevelopment Agency of the City of Bunning 01102/0012/79701.04 $7-$8 Million for the Revitalization of the Downtown New streetscape New commercial facades . --- Purchase of vacant parcels for additional off-street parking . Development of art park ٠ Restoration of the Fox Theater . Paving of alleyways for pedestrian passage . Forgivable loans for specialty retail shops/restaurants tenant . improvements and signage $7-$8 Million for Economic Incentives Assembly of land for Drag City and associated industrial Assembly of land for additional hotel/restaurant development at . Highland Springs interchange with the I-10 freeway Construction of off-site improvements for developments . generating new jobs and/or sales tax $7-$8 Million for Public Improvements Extension of roadways and utilities to large vacant industrial tracts Beautification of major corridors through the project area - . Ramsey Street gateways and 1-10 interchanges Traffic signalization along Lincoln Street for future industrial ۰ development Improvements to park and recreation facilities in the project ٠ area Completion of curb and gutter along the length of Ramsey Street and in residential neighborhoods Creation of railroad quiet zones in the project area" ٠ There are significant variations in the level of detail concerning the projects outlined in the Offering Statement. For example, "restoration of the Fox Theater" is a specific project, while "new streetscape" is vague as to the location or nature of the improvements. Specific dollar amounts and budgets were not available for any of these projects. In fact, in the case of the Fox Theater, the original budget estimate of this project turned out to be only half what was required after an architect was able to go through the building and develop a detailed budget. Developing precise lists of streetscape or façade improvements is impractical for purposes of preparing a public financing as significant expense would be incurred in developing improvement plans, and this cannot be done until the bond funds are available to pay for the plans. Without the plans, detailed cost estimates are not available. So there is a "chicken-egg" problem. In fact, the level of detail provided in the Offering Statement was adequate for the bond issue as required by the finance team, and was typical of such bond issues. Following the receipt of Bond finance revenue in 2007, the Agency prepared a detailed project list that included funded, pending and potential projects for implementation and planning purposes. As the Agency proceeded with these projects, many things changed. For example, as designs progressed, the scope of many projects changed. In addition, construction costs began to change significantly during the period from 2008-2010. Also, new and different projects were brought forward, and the Agency tried to be responsive to priorities generated by the community. The Agency's annual budget reviews were another occasion to examine funding priorities. Finally, State budget raids forced reprioritization of projects as Agency funds were reduced from anticipated levels. Staff has wanted to make sure that the expenditure of monies reflected the most current needs of the community. Beginning on August 2, 2008, the Agency Board began a series of review sessions (August 2, 2008, August 11, 2008 and August 11, 2008) which provided the Agency Board the opportunity to discuss and update the prioritization, add or delete bond funded projects. These discussions culminated in the August 25, 2009 Regular Meeting of the Community Redevelopment Agency, where staff presented an update (Attachment 1) on the status of the projects completed, underway, planned and proposed with the proceeds from the 2007 Bond issuance. Due to extensive interest by the Board in discussing the project list and interest in updating and prioritizing projects, the matter was further continued to a Work Session on September 8, 2009. On September 8, 2009, the CRA Board conducted a public Work Session wherein they reviewed the status of the 2007 project list (updated) to discuss completed projects, progress on current projects, and whether to reaffirm or remove proposed or pending projects and potentially add new projects to the list (Attachment 2). The result of the Work Session and review is shown in Attachment 3: Approved Bond Fund Project List, September 8, 2009 which prioritizes Agency bond-funded activities and projects going forward in 2010 and beyond. The current project list, is being further reviewed in the current Agency budget process, possibly at the next Agency meeting. All these reviews have occurred at public hearings. What can be seen from this review is that the Offering Statement list of almost 20 projects has been evolved by the Agency into a projects list of some 35 projects either completed or planned, with all of this occurring before our becoming aware of the Grand Jury's finding. 2. "Testimony Revealed That The City's And The Employee Turnover. Redevelopment Agency's Planning And Project Implementation Have Been Hampered By Key Employee Turnover .... " Attached as Attachment 4 is a table showing general staff turnover in Banning positions of personnel having involvement in the redevelopment program area. The Grand Jury is correct that there has been significant turnover. There is no doubt that such turnover can adversely affect program continuity, and it creates the need to train new personnel, and establish bonds among staff members and between staff and the community. The Agency agrees that such instability is not desirable. On the other hand, some of this is a reflection of the huge economic issues affecting the general state economy and local government in particular. In FY 2009-2010 the City faced a $5M budget deficient and eliminated 40 positions. Current projections are for another $1.2M shortfall for the coming fiscal year - which represents a 35% cut over two years. In such economic times, employee stability is difficult to maintain. As part of these budget issues, in 2008 City Manager Brian Nakamura recommended deleting the position of Redevelopment Director and merging offices of Planning Director and Redevelopment Director into a single position, as a cost savings. The implementation of this recommendation has led to the need for increased reliance on consultant services, and for use of the resources of Agency Counsel. As noted by the Grand Jury, the 5-year Implementation Plan expressly acknowledged that hiring outside consultants was one means of meeting the Agency's needs. For example, the Agency utilizes Diane Wirth, of Solution Works to promote various projects with the development community, including retail development, recruitment of retailers and other marketing, analysis and economic development activities. Even this contract has been reduced to $80,000 for FY 09-10 from $160,000 in FY 07-08 for economic development services, due to financial limitations and non-existent new retail and office development projects in Banning and the region. Also, Steve Dukett of Urban Futures Inc., has been retained to assist and advise the Agency on specific projects such as the redevelopment of the former San Gorgonio Inn Site, renovation of Stagecoach Plaza, re-use of the former All Star Dodge site, Agency budgeting and bond fund accounting and review of other redevelopment proposals and projects. With the use of these contract resources, the current staffing structure includes overall supervision by the Executive Director, Andy Takata, Department Management by the Community Development Director, Zai Abu Bakar and her staff, Redevelopment Manager, John Jansons, and Project Coordinator, Dirk Voss who was recently hired as of February 24, 2010 to fill this position which had been vacant since October 2007. Daniele Savard also serves as the Secretary to Executive Director Takata. This latest hire of Dirk Voss was subsequent to the Grand Jury's Report, but the recruitment for this position began in October of 2009. Accordingly, all budgeted positions are filled and with the contract help, the Agency is appropriately staffed to fulfill its mission. While the Council is struggling to avoid laying-off police officers and cutting funding for firefighters, the Redevelopment function has appropriate resources, and realistically must carry forward its program within these budget constraints.
Related Recommendations (1)
R1
"The Redevelopment Agency Should Develop A Prioritized List Of Redevelopment Projects To Justify Any Future Funding Through The Bonding Process, Further, Projects And Their Prioritization Should Be Widely Publicized And Then Reviewed By Members Of The Community For Their Input Prior To The Issuance Of Future Bonds." Response: The Agency has a prioritized list of redevelopment projects the most recent version of which is set for forth in Attachment 2. The Agency ..... periodically reviews the list, with the most recent discussion being set for May 25,
F2
Develop strategies. Alliance presented the Agency with a 5 year Plan and a 5 year marketing plan in March 2007, and quarterly reports thereafter. Define Boundaries. The proposed boundaries were set with a north boundary of the south side of Williams, a south boundary of the north side of Livingston, an east boundary of the west side of Alessandro and a west boundary of the east side of 4th St.
Related Recommendations (1)
R2
"The Banning City Council And The Redevelopment Agency Should Consider Retaining An Outside Consultant To Ascertain From Employees Their Attitudes Toward Their Work Environment And Their Relationship With Policymakers. Further, The Leaders In Banning Should Take The Initiative To Establish Ongoing Workshops On The Role Of Policymakers And Employees And How To Improve Relations." Response: The City disagrees with this finding. The latest staff budget proposals for the next fiscal year include elimination of all parks and recreation staff; closing the pool, community center and senior center; laying off 20 employees, and eliminating four police civilian employees and four police officers. The State of California has just taken $1.9M of our redevelopment funds. The City does not have the financial resources to conduct a survey, hold workshops or hire a consultant to address employee / policymaker relations. The current Executive Management Team and staff have a positive and productive relationship with the City's policy makers (City Council, Agency Board, and Planning Commission); and are bearing up as well as can be expected in this fiscal emergency. Despite the challenges of layoffs, cutbacks, work furloughs and other issues, the staff has performed well and with a good attitude. An outside consultant will not be able to appreciably affect, employee morale in the face of these challenges. With the hiring of the new City Manager, one with very strong leadership skills and capabilities, both with staff and the City Council, we do not believe it is necessary bring in an outside consultant at significant expense which we cannot afford. Mr. Takata has over 15 years of City management experience in three other highly successful cities. Mr Takata has reinforced that Banning operates under a Council/Manager form of government and that all communication should flow through his office and not directly to individual staff members.
F3
Façade Program. "It Was Found That The Redevelopment Agency Board Has Committed Funds For Improving The Appearance Of Vacant, Unrented Property While Ongoing Businesses Are Made To Wait For Assistance." The following section will show that the Agency has been deliberate in its adherence to program guidelines in awarding Façade Improvement grants to downtown property owners. In subsection (a) below, the pre-2009 policy for selecting projects demonstrates that projects were primarily selected based upon location in order to promote "downtown and core area" revitalization. In subsection (d) below, under the Facade Program since 2007, only two out of fourteen projects were completed on vacant buildings, the other twelve were for owner- occupied businesses, and owner-occupied businesses serving as the anchor with additional lease space, or for multi-tenant buildings. As for the two vacant buildings that were improved with the Facade program, the sense at the time was that if these long vacant buildings were improved physically and aesthetically, the chances of leasing these properties might improve. This strategy preceded the overall decline in the economy that has since stifled small business openings. Finally the Agency was thoughtful in denying projects that did not conform to Agency guidelines in place or were considered not the highest priority for an investment of competitive Agency resources at the time. (a) Pre 2009 Selection Criteria in Awarding Façade Projects On February 13, 2007, the Agency enacted new policies that created Priority Zones for consideration of Façade Program Awards as follows (See Attachments 5 and 6): Downtown Core with boarders of 4th St (W) to Martin (E) Priority 1 - And Livingston (S) to Williams (N) Add out to 8th St (W) to Hargrave (E) Priority 2 -
Related Recommendations (1)
R3
"The Redevelopment Agency Board Should Prioritize How Facade Improvement Money Is Spent, First Priority Should Be Given To Owners Of Buildings Where Businesses Are Operating; Second Priority Should Go To Building Owners Who Have A Commitment To Rent A Vacant Structure; And Lowest Priority Should Be Instances Where A Building Owner Seeks Redevelopment Money For A Vacant Building." Response: The Agency disputes this finding because based upon the review of the implementation of the Facade Improvement Program by the Agency, as detailed in preceding Section 3, under Findings, it is clear that the Agency has not, "Committed Funds For Improving The Appearance Of Vacant, Un-rented Property While Ongoing Businesses Are Made To Wait For Assistance." as alleged by the Grand Jury, but rather has generally assisted occupied properties (12 of 14) businesses and does not make occupied businesses wait for program assistance. The Grand Jury is simply mistaken as to where the Façade Program funds have been spent. We have program guidelines which make funds available for occupied properties to promote business retention as well as unoccupied properties to promote the recruitment of new businesses. We give no priority to either. In the normal course of accepting and processing applications, the majority of assisted properties have been occupied properties. The Agency has not received complaints over an award of funding. There is no need for the priorities suggested by the Grand Jury. We will continue to monitor suggestions from the public and property owners and adjust the program in the future if warranted.
F4
East Banning. "Onsite Visits And Sworn Testimony Revealed East Banning To Be A Blighted Area In Need Of Priority Attention From The Redevelopment Aside From Some Low-Income Housing Expenditures The Agency. Redevelopment Agency Has Neglected This Blighted Area Of The City." East Banning is generally described as those portions of the City east of San Gorgonio Avenue as reflected in the City's geographic directional street naming system. Any area east of San Gorgonio Avenue is considered "east" while any are north of 1-10 is considered "north" any area "west" of San Gorgonio Avenue is "west" and any area south of I-10 is "south". While this layout may be considered geographically "skewed", because "east" Banning is only half the size of "west" Banning, it does follow the long established address numbering convention. For purposes of this discussion, we provide Attachment 9, which is a map that expresses the City as divided into three sectors: "east", "central" and "west". As shown, the following Agency projects have been identified, completed or is planned in "east" Banning. These include: Completed Projects 1) Coplin House restoration 2) Chamber of Commerce restoration 3) Art Gallery acquisition and proposed renovation 4) Super-Subs renovation 5) Construction of Civic Center Parking lot and Streetscape Construction of new Police Station
Related Recommendations (1)
R4
"The redevelopment agency should commit now to a major improvement program over the next 10 years to reduce the blight in East Banning." Response: The Agency does not disagree with this recommendation as long as it is recognized that the Agency has made and continues to make significant investment in projects in "East" Banning. As discussed in Section 4 above, the Agency has made considerable investment to relieve blighting influences in "east" Banning. The Agency is mindful of trying to balance its investments across the entire project area and to not ignore any area of need. The disparate land uses, fragmented ownership, obsolete commercial uses, aged housing stock, and volume of poor quality land often lacking basic infrastructure make the castern portion of the project area particularity difficult to incentivize private development and cost prohibitive to solve strictly through public projects. To date, following a closer review it can be seen that the Agency's largest investments have been in redevelopment and housing actives east of San Gorgonio Avenue, with the downtown town core area second, and investment in projects on the west end of town ranking third. As shown in Attachment I, discussed in Section 4, $1,500,000 has been identified for improvements near Hargrave Street and East Ramsey Street, $275,00 has been identified for East Ramsey Street beautification, and some portion of the $1,925,000 identified for property acquisition is intended for future projects in "east" Banning. The Agency agrees that further work is necessary to eliminate blight in the eastern part of the City. As such, the Agency has identified in its current work plan, several projects as shown in Attachment 2 to continue to prioritize blight elimination in "East" Banning. Beyond the work that planned or underway, the Agency agrees that blight elimination should be sustained over a long term period, as long as revenues are available in the future to improve the appearance and condition of the eastern part of Banning.
F5
Need for Additional Staff. This Answer Is Incorporated In Number 3 Above. Dodge Parcel. "In July 2009, The Redevelopment Agency Bought Property In
Related Recommendations (1)
R5
"The Redevelopment Agency Board Should Consider The Hiring Of An Additional Staff Person To Help In Monitoring Current Projects And Administering Programs." Response: Additional staff (Dirk Voss, Project Coordinator) was hired on February 24, 2010, as discussed in Findings Response No. 2 above. Additionally, the Agency uses extensive consultant resources as needed to manage its workload. For the foreseeable future, until economic conditions improve, the Agency Board believes the current staffing level as supplemented with consultant services will have to suffice.
F6
The Western Side Of The City Without Acquiring Its Own Independent Certified Witnesses Testified That The Price Paid, $1,200,000, Was Above Appraisal. Since The Purchase, The Redevelopment Agency Board Has Market Value. Budgeted An Additional $800,000 To Make The Property More Desirable." --- By law, before initiating an action in eminent domain to condemn property, a redevelopment agency is required to obtain an appraisal of the fair market value of the property and determine the "just compensation" and make a written offer "for not less than the approved appraisal of the fair market value of the property." (Code of Civil Proc, §1245.230; Gov't Code §7267.2). This requirement is included in the eminent domain statute primarily to protect the property owner and assure that the public agency will pay "not less than" fair market value. However, an agency may acquire property other than by condemnation (CCP §1230.030) and is encouraged to make every reasonable effort to acquire real property expeditiously by negotiation (Gov't Code §7267.1). Particularly, where property is offered by the owner for sale on the open market, a public agency is in the situation of any other interested buyer of property, and can negotiate the acquisition of the property for an agreed price. This is expressly permitted by Gov't Code §7267.2(d)(e) which permits a public entity to acquire property "offered for sale" to the "general public" at a specified price as long as the price is the same as the specified price and no federal funds are involved. As condemnation is often seen as a somewhat abusive process, and also involves significant legal expense, a public agency can fulfill its duty to negotiate in good faith to obtain whetship. This can avoid the legal expense of condemnation, thus saving public dollars ("better to give it to the property owner than the lawyers"). Even if condemnation, settlements are reached at values beyond the agency's appraisal. After all, the key difference between condemnation and a voluntary acquisition is the mutual agreement of the parties on price, rather than the forced agreement under the threat of condemnation. With these considerations in mind, it should be stated that it is generally the Agency's policy to obtain an appraisal, even in a voluntary acquisition, at least as a check that the voluntary acquisition price is not excessive. In the case of acquisition of the Dodge parcel, this . was not done for reasons that seemed justified to the Agency, and which we would like to explain. The owners of the Dodge Parcel were Patrick and Shirley DeZorzi. An automobile and truck dealership had been operated on the property for several decades as an important part of Banning's economy and most recently served as a Dodge /Chrysler dealership (All Star Dodge) prior to closing. All Star Dodge closed in October 2008 due to general economic conditions, and in January 2009 it was listed for sale at $1,500,000. The brokers had several offers around this price for used car and recreational vehicle sales, but when the City Planner indicated that these uses were not permitted by zoning, these buyers lost interest. After one month on the market, a potential buyer was found and a price was agreed to at $1,200,000 with a 90 day escrow. The purchase price was to be paid with an initial payment of $182,000, and the Seller carrying a first mortgage of $1,020,000 for 8 years at an interest of 6% and payments of $7,307.60, secured by an earnest money deposit of $50,000. The escrow was extended three times until June, 30, 2009 with non-refundable money released each time. The Buyers' plan was to bring a sales tax generating use back to the property. The Buyer wanted assistance from the Agency. Several meetings occurred between the Buyer and representatives of the Agency, but an agreement was not reached. On July 1, the Agency staff learned that the Seller would grant no further escrow extensions, and the Buyer was unwilling to go forward, so it appeared the transaction would collapse. At that point the Agency proposed to Seller and Buyer that Agency would assume the purchase agreement on the same terms and conditions if the escrow could be extended for two weeks until the Agency's meeting on July 28, 2009. The parties agreed. The Dodge Parcel at a price of $1.2M has a 9,000 sq. ft. buildings on 1.45 acres, with a per sq. ft. value of $133.33. The broker provided several sales as comps: (a) 1939 W. Ramsey (7/6/09) with a 1.23 acre parcel selling at $565,000 ($408/sq. ft.); (b) 50 S. Alessandro (8/26/08) with a .36 acre parcel selling at $600,000 ($122/sq. ft.); and had an appraisal of another property (c) 2415 Ramsey (10/3/08) with a 1.26 acre parcel appraised at $1.075M ($155/sq. ft). So the $133.33 per sq. ft. price for the Dodge Parcel was in line with these valuations. At the Agency's meeting of July 28, 2009, (Attachment 12) the Agency publicly agreed unanimously to proceed even though there was no appraisal for the following reasons: The price had been reached on the open market between a willing buyer and willing seller and the Agency accepted the result of this negotiated value rather than initiating an involuntary acquisition. 2) There was no time to do an appraisal, which would likely have taken at least 6 weeks, and preserve the terms of the deal, The transaction included a financing mechanism through the Seller, which 3) is not generally available in Agency deals, and meant that the Agency only had to come up with $200,000 cash. This left resources for other important Agency projects. This financing aspect of the transaction meant that an appraisal based on an all cash transaction was not applicable. The Agency has been presented with no credible evidence that the $1.2M price is above market value. The brokers handling the transaction opined that the price at $133.33 per square foot was reasonable and in line with the market. In fact, there was a 20% reduction from the .... original $1.5 asking price. The Seller financing terms were extremely attractive to the Agency leaving $1M available for additional Agency projects. On this basis, the Agency proceeded and closed the deal. The Agency is evaluating potential transactions for reuse of the property. No agreement has been reached with any party. It is not true that another $800,000 has been budgeted to make the property more desirable, and the Grand Jury is misinformed about this.
Related Recommendations (1)
R6
"All Future Development Property Purchases By The Redevelopment Agency Must Include An Independent Certified Appraisal Ordered By The Redevelopment Agency Staff." Response: The Agency's policy is to always obtain independent appraisals when legally required, and to generally obtain them for all other transactions. However, in an urgent situation where an appraisal is not legally required and there is no time to obtain one, if the Agency has the opportunity to acquire property in the open market without a forced acquisition through condemnation, the Agency reserves the right to take advantage of such a situation and proceed without an appraisal if warranted. This is particularly so where favorable financing terms are negotiated.
F7
Cultural Alliance and Performance of Contracts. "On August 4, 2005 the city council voted to give the Alliance $10,000. In the course of the next four years, the city council and the same people acting as the redevelopment agency board voted to give the Alliance a total of $806,503.08 in public funds for a variety of uses (see appendix for a breakdown on the funds).... The following redevelopment activities were never performed: development of a downtown Property-Based Improvement District (PBID) and a campaign to market Banning with advertising on billboards, radio, television and infomercials." The Agency has contracted with the Cultural Alliance since 2005 to provide services to the Agency that would forward downtown revitalization through the arts and cultural activities, community events, marketing, promotions and activities that support the downtown business community. The Grand Jury has recommended that the Alliance be required to return $52,000 to the -- Agency with interest because of the Alliance's failure to meet its contractual requirement to use $34,000 to develop a PBID between 2006 and 2008, and $18,000 to develop a PBID between 2008 and 2009. It would appear that the Grand Jury reached this conclusion based on the fact that the PBID was not developed. As will be shown below, such a narrow definition of the word "develop" is not supported by either the language of the agreement itself or the subsequent conduct of the parties. The services be provided by the Alliance regarding the PBID are listed in Exhibit A of the August 8, 2006 Agreement includes, Organization of a PBID in Downtown Banning, Hold General Informational meetings, Develop strategies, Define Boundaries, Create structure and Funding with City of Banning, and Develop and Distribute electronic newsletter to support creation of a PBID. Before an itemization of how the Alliance met each requirement, the Agency would like to clarify that there was no requirement that the PBID be actually created in order for the Alliance to have met the terms of the contract. In the past, the Agency had failed to convince the Downtown Business and Property owners to approve a PBID and that is why they asked the Alliance to assist in the effort. The former Agency Redevelopment Director told the Alliance this was a long-term goal that could probably not be achieved for five to ten years, if at all. Nonetheless, the Alliance agreed to have this goal added to its contract. In the subsequent 2008-2009 contract, Exhibit A (Scope of Services) states: "Establish a leadership group of property/business owners dedicated to forwarding downtown revitalization" and the 2009-1010 contract which states: "A PBID is unrealistic in the current economic climate, the Alliance will, instead, continue to develop ways to promote downtown businesses, and bring them together". The Agency did not expect success within two years, but wanted the Alliance to . help set the foundation for the future. The Alliance provided the Agency with periodic reports showing the activity undertaken to achieve a PBID since the inception of the contract. These included: Hold General Informational meetings. The first of a series of meetings with
Related Recommendations (1)
R7
"The redevelopment agency board should enforce the immediate return of $162,000 of public money from the Banning Cultural Alliance in accordance with the terms of the contracts. The amount arises from the Alliance failing to meet its contractual requirement to use $34,000 to develop a PBID; to use $110,000 for a marketing program between 2006 and 2008; and $18,000 to develop a PBID between 2008 and 2009. A reasonable rate of interest on the amount should also be included." Response: The Agency disagrees with this recommendation. The Agency has been embarking on a major revitalization of its blighted downtown. The Agency through the Façade and Owner Participation Program has revitalized buildings in order to encourage new businesses, but has also felt it needed assistance in strategies to bring people back Downtown. The Agency contracted with the Banning Cultural Alliance to produce events and promotional activities, public relations and marketing to do just that. Although the contract and performance guidelines initially could have been clearer and more precise, as has been recently instituted with the Alliance's current contract (Attachment 12), it is the opinion of the Agency that it has received the support and services, to accomplish the overall goals of bringing people Downtown, through the Alliance's advertising, public relations, events and activities and the Cultural Alliance has adequately fulfilled its contract. Likewise, funds designated for the creation of a PBID but utilized for other public relations and marketing categories are listed in the Contract. At an Agency public meeting the Alliance made the recommendation to the Agency Board that given the very small number of businesses Downtown, their lack of confidence in the City, along with a disastrous economy, meant it wasn't prudent to proceed with trying to establish a PBID at this time. In summation the money alluded to by the Grand Jury did not disappear but was utilized using different methods and marketing strategies, to accomplish the same goals as agreed to, and were reported to the Agency, verbally in reports and in writing. To avoid future issues, the new contract has been more explicitly outlined, along with performance goals, as previously discussed in regard to more clearly written contracts with performance measures clearly outlined. Accordingly, the Agency believes that the taxpayers of Banning received goods and services that were covered by the referenced $162,000.00 and helped produce multiple events bringing thousands of people downtown, over time, as well as the sponsorship of multiple activities at the Banning Women's Club, creation of the Pass Area Performing Arts Group, multiple visual and art programs for the youth of Banning, Diversity Programs and support for the visual and performing arts programs in Banning.
F8
Cultural Alliance Contract. "The first two contracts covering the period between 2006 and 2009, followed the same format. The Alliance was given a check for the total at the beginning of the each contract year. The agreements --- contained no means to measure success or failure of the efforts by the Alliance, and they contained no criteria to determine whether the obligations were indeed fulfilled." The first two contracts with the Cultural Alliance did follow a specific format. They were lengthy contracts and did contain a comprehensive breakdown of all services requested. This is demonstrated by the Grand Jury's pointing out the breakdown of funding in those contracts. But the Grand Jury goes on to criticize the agreements for not containing criteria to determine if the obligations were fulfilled. The Grand Jury fails to discuss the most recent contract entered into with the Cultural Alliance, a copy of which is attached as Attachment 13. On June 23, 2009, as part of its annual Budget adoption process, the Agency approved funding for the Cultural Alliance for FY 2009- 2010, and was approved by the Agency for the period of July 1, 2009 through June 30, 2010 in the amount of $131,000 and directed staff to prepare a contract for services subject to the approval of the Agency Counsel. This contract was negotiated under the direction of the Agency's new General Counsel. The contract was completed and executed in November of
Related Recommendations (1)
R8
WILSON ST 29 16 10 GEORGE ST ᄪ SA 17 25
F9
Special Treatment of Cultural Alliance. "An examination of the relationship between the Alliance and the redevelopment agency revealed a willingness by the board to fund the group without any measure of accountability, without measures of success or failure and without demands for return of funds not spent on contractual obligations. No other outside organization in Banning has been treated this way by the board of the redevelopment agency." The Agency strives to practice equitable treatment in its contracting. Since 2009, and well before we were aware of the Grand Jury concerns, under the supervision of our new Agency Counsel (hired at the end of 2008, staff has worked to improve the content and detail of Agency contracts so Agency vendors and consultants are under a set of uniform standards contained in the Agency's model short and long form contracts to clearly detail metrics for performance, hold vendors accountable for performance, and to reconcile deliverables against expenses if needed. In the case not only of the Cultural Alliance, but also the Banning Chamber of Commerce and Neighborhood Housing Services of the Inland Empire, Solution Works and Urban Futures Inc, the Agency's larger contractors, the Agency has moved toward monthly, quarterly or at a minimum, semi-annual reporting of progress and results by the principals of these respective organizations in person to the Agency Board. This allows for frequent review of contract performance by staff and allows for Agency direction, praise, criticism, or other direct feedback to recognize satisfactory performance or to identify the need for adjustments/improvements in performance. By way of this constant and routine oversight, potential problems can be identified carly and adjustments /corrections can be made if necessary before a small problem or issue --- becomes a large one. Performance standards are more detailed with specific times for performance and budgets for specific tasks. Finally, the Agency reserves the right for adjustments in the final work products or deliverables within the framework of contract, as circumstances may dictate, as long as it is deemed a "like substitution" and the Agency has received the same value from one type of deliverable versus another, I.E.: a print advertisement versus a radio advertisement where either is sufficient to complete the task of "advertising". In sum, the Agency disputes the finding that it treats the Cultural Alliance differently than other vendors in its contracting because the Agency utilizes a standard set of contracts that all contractors are required to use and the Agency subjects all contractors to period reporting and accountability and allows for adjustment and substitution of work products upon the mutual consent of both parties and appropriate approval(s). В.
Related Recommendations (1)
R9
"The Redevelopment Agency Board Should Immediately Cease And Desist Awarding Any Redevelopment Funds To The Cultural Alliance." . . The Agency believes that its revitalization, redevelopment and Response: economic development strategy is working in downtown Banning and that the vast majority of Banning residents appreciate the "new" Downtown Banning. The Grand Jury needs to step back and look broadly at what has been accomplished in Banning, particularly in the Downtown, and see this in the context of the current national recession. Less than five years ago Banning had five major development projects being actively pursued with some 5000 units proposed, which could have almost doubled the population of the City. Now, virtually all these projects are in abeyance and, housing prices have collapsed, not just in Banning or Riverside County, but in throughout the State and the Nation. Against these general trends, what has the Agency accomplished in Banning? The Agency has a well thought out revitalization strategy for Downtown, including the following components: (i) the Façade program which has renovated many buildings and made the Downtown attractive, (ii) entering into Owner Participation Agreements, as encouraged by the Community Redevelopment Law, to assist existing owners to make major investments in designated properties such as the Oddfellows Building and Fox Theater to create a Downtown entertainment disrict, (iii) developing a downtown master plan (Paseo San Gorgonio design plan) to enhance properties, (iv) developing a $60M regional Mid-County Justice Center to bring hundreds of people everyday to Downtown who will support services there, (v) entering an exclusive negotiation agreement with a developer actively working to develop the San Gorgonio Inn Site, (vi) adding new public infrastructure and amenities such as an Art Park; and (vii) enhancing the City's Civic Center, including with a new police station enhancing security. Collectively, these actions have caused a major change in the perception of, and willingness of residents and tourists to visit Downtown Banning. A critical component of this program, to be fully successful, is to create a sense of place, including events to bring people Downtown. The original and continuing strategy of the Agency includes the purchase of services from the Alliance to deal with the "human/people" side of the equation, which is to bring people Downtown to shop, play, eat and be entertained. The Banning Cultural Alliance is a volunteer organization made up of a very broad-based group of community leaders who with honesty and integrity have worked to fulfill their part of accomplishing the Agency's goal of a revitalized Downtown Banning to produce a sense of place for all residents as well as creating an attractive place to locate new retail establishments and professional office facilities. Some of the tasks the Alliance has have been asked to perform have been very difficult and the Agency Board has received regular reports, monitored their efforts, and reprogrammed their efforts as needed. Overall, the Agency Board believes the Cultural Alliance has been an extremely effective partner in our redevelopment program, which is bearing surprising success given the extremely adverse general economic conditions. In such times it could not be expected that every event or every development plan could meet our full expectations. But our Downtown looks the best it has in its entire history ever, we now enjoy an entertainment district, we have a $60M Justice Center .... coming, we have an active redevelopment project for the San Gorgonio Inn Site, and we have the Cultural Alliance working on events such as Cool Summer Nights, the Pass Has Talent, Phineas Festival, Art Hop, Halloween Festival, Artist Hanging, and others which has brought thousands of visitors to Downtown. When viewed in this light, and in the context of the reality of the current economic conditions, we believe our program should be seen as a model for what public-private partnerships can achieve. END -

Conclusions 14

* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.