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Burbank Viewpoints

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Mega-Developments Could Cost Burbank Schools Millions

Thanks to a 30-year-old California law which imposes a so-called “developer’s tax” on new construction in the state — money that’s earmarked to pay for school construction and facility upgrades and maintenance — Burbank’s schools will reap additional funds from the city’s development boom. But will it be enough to offset the impact of all those new students that will result from the new development?

An April 2016 analysis prepared for the school district suggests maybe not.

The School Fee Justification Study,” prepared for the district by the consulting firm Koppel & Gruber Public Finance, examined what impact an increase in new residential housing might have on the city’s schools, which serve more than 15,000 students in grades K-12. It determined that each additional square foot of construction would cost Burbank schools $4.10. However, developers of residential housing in Burbank will only have to pay $3.48 per square foot — the maximum set by the state.

As a result, Burbank schools could be left with a shortfall of $.62 for each square foot of new residential construction. And the district could be left high and dry when it comes to commercial development too, according to the study.

State law caps the tax on new commercial construction at $.56 per square foot. With the exception of hotels, the bulk of the commercial construction projects proposed for Burbank also fell short of covering projected costs, sometimes by more than 150 percent, according to the school fee study, which set the impact construction of a standard commercial office space at $2.07 per square foot, a large high-rise commercial office space at $1.97 a square foot, and shopping center at $.85 a square foot.

The school district says it plans to use the money it collects on new development to cover roughly $124 million in facilities costs over the next decade, including an almost $40 million-dollar renovation project which would “include modernization of existing classrooms and the replacement of portable classrooms with permanent classrooms,” the report said.

A rudimentary review of five projects currently in development in Burbank — Burbank Town Center/I Heart Burbank, Premiere on First, 115 N. Screenland, First Street Village, and The Avion (airport adjacent property) — indicates that the discrepancy between how much tax the schools can force developers to pay and how much the district says it needs to blunt the impact of new construction could rob Burbank of almost $2.3 million dollars.

How we got the numbers:

We obtained estimates of the potential square footage and use of each project from City of Burbank Planning Board’s website. For residential units, unless a more accurate figure was provided in the developer’s plan, we used 1,173 square feet as the weighted average square footage of the proposed units (an estimate based on information obtained from LA County, according to the district study). We determined the cost impact of each project on school facilities using the BUSD report’s numbers ($4.10), and then compared this to the total revenues the school fees would generate as a result of the developers tax at a rate of $3.48 per square foot.

Because the impact on schools by commercial development varied according to the type of development (shopping centers compared to banks compared to commercial offices, etc.) we relied on the BUSD’s numbers to determine an average commercial cost impact ($1.40 per square foot) and compared it to the maximum school fee assessed on commercial properties ($.56).

Since the BUSD report determined the impact from hotels would be $.49 (below the minimum), and the district can not assess more fees than the cost of impact — we determined each square foot of hotel space should be taxed at a rate of $.49 per square foot. We used 300 square feet (slightly less than the average US hotel room size according to USA Today) to determine the overall square footage of hotel projects proposed.

Burbank Town Center/I Heart Burbank
70,000 square feet of new commercial square footage, approximately 200 hotel rooms and approximately 1,100 housing units

Residential
Total square footage: 1,290,300
BUSD impact ($4.10): $5,290,230
School Fee ($3.48): $4,490,244

Shortfall: $799,986

Commercial
Total square footage 70,000
BUSD impact ($1.40) $98,000
School Fee ($.56) $39,200

Shortfall: $58,800

Hotels
Total square footage 60,000
School Fee ($.49) $29,400

TOTAL SHORTFALL – $888,186

Premiere on First
Two options have been proposed. Both would include 154 residential units. One would include 181,517 square feet of commercial space; the other proposes 126,000 square feet in hotel space and 15,589 square feet of commercial space.

Residential
Total square footage: 180,642
BUSD impact ($4.10) $740,632
School fee ($3.48) $628,634

Shortfall: $111,998

Commercial

Option One – Commercial/No Hotel

Total square footage 181,517
BUSD impact ($1.40) $254,124
School Fee ($.56) $101,646

Shortfall: $152,478

Option Two – Commercial & 230 room hotel

Commercial sq. footage 15,589
BUSD impact ($1.40) $21,825
School Fee ($.56) $8,730

Shortfall: $13,094

Hotel square footage 126,000
School Fee/impact ($.49) $61,740

TOTAL SHORTFALL $165,573

115 N. Screenland
40 residential units with an average size of 1,284. 3000 square feet of commercial use.

Residential
Total square footage 51,360
BUSD impact ($4.10) $210,576
School Fee ($3.48) $178,732

Shortfall: $31,844

Commercial
Total square footage 3,000
BUSD impact ($1.40) $4,200
School Fee ($.56) $1,680

Shortfall: $2,520

TOTAL SHORTFALL: $34,364

First Street Village
261 residential units and 21,265 square feet of commercial space

Residential
Total square footage 306,153
BUSD impact ($4.10) $1,255,227
School Fee ($3.48) $1,065,412

Shortfall: $189,815

Commercial
Total square footage 21,265
BUSD impact ($1.40) $29,771
School Fee ($.56) $11,908

Shortfall: $17,863

TOTAL SHORTFALL: $207,678

The Avion
1,177,489 in commercial construction. 150 room hotel.

Commercial
Total square footage 1,177,489
BUSD impact ($1.40) $1,648,485
School Fee ($.56) $659,394

Hotel sq. footage 45,000
School Fee/impact ($.49) $22,050

TOTAL SHORTFALL: $989,091

COMBINED SHORTFALL FOR ALL PROJECTS CONSIDERED: $2,284,892

It’s important to note that the analysis prepared for the district was a cost projection — the actual cost impact on schools could, in fact, turn out to be much less (or much more).

Also, the school district must meet certain legal requirements before imposing the fee on new construction in the first place. They must:

1. Determine the purpose of the fee;
2. Identify the use to which the fee is to be put;
3. Determine how there is a reasonable relationship between the fee’s use and the type of development project on which the fee is imposed;
4. Determine that there is a reasonable relationship between the need for the public facilities and the type of development project on which the fee is imposed;
5. Determine that there is a reasonable relationship between the amount of the fee and the cost, or portion of the cost of the public facility attributable to the development on which the fee is imposed; and
6. Provide an annual accounting of any portion of the fee remaining unspent or held for projects for more than five (5) years after collection.
So, in fairness, the report prepared for the district should be read in light of the fact that the school district has an impetus to, perhaps, provide the “worst case scenario” in calculating, the potential impact of the new development on schools. After all, it may only assess the developer’s fee if it can show that its needs are equal to or greater than the amount of revenue it would collect from the tax.

But the potential impact of building residences for thousands more families whose children may use the district’s 19 schools should not be discounted either. It is one other important factor residents need to examine as we head to the polls next month. We need a city council that thinks before acting and considers all the ramifications of its decisions. We need a council that puts Burbank families first and won’t greenlight projects that allow outside developers to turn a quick profit and stick Burbank schools with the bill.

http://www.burbankusd.org/files/user/3/file/Developer%20Fees%20-%20Notice%20of%20Public%20Hearing.pdf

http://www.burbankca.gov/departments/community-development/planning
https://www.fixr.com/costs/build-hotel

A simple Yes or No question

As much as I hate seeing myself on camera this new Jack Sprat video made my day. $50,000 in public funds were misappropriated and 4 out of 5 of the City Council members won’t hold anyone accountable. I wonder why? It’s time for the Council to hold the hearing already.

Election Fraud is not a “Woopsie!”

Learn HOW $50,000 went to Yes on Measure B from public funds

learnhow

Overview:

The Burbank Hospitality Association (BHA) is a public corporation created by the city council to administer public funds generated by a 1% tax on hotel stays in Burbank. The BHA has violated multiple campaign finance prohibitions in addition to open meeting laws in connection to their sponsorship of ‘The Committee for Yes on Measure B.” Public funds of at least $50,000 were gifted to unambiguously urge a particular result in an election which is a violation of state law. City staff members took part in the disbursement of these funds, which is also prohibited.

Detailed Analysis:

Tourism Business Improvement Districts (TBIDs) are public-private partnerships created by city governments to collect special taxes and apply them to specific purposes. In Burbank’s TBID, public funds are collected by the city and are subsequently used to promote the tourism industry in the city. Burbank’s TBID, The Burbank Hospitality Association is a public corporation created by the city to administer the revenues generated by the TBID. It includes all hoteliers in Burbank with more than 25 rooms. At present, members of the TBID are assessed 1 percent of gross short term hotel stays. The City of Burbank is responsible for collecting those funds on a monthly basis.

The Burbank Hospitality Association (BHA) does business in the city under the name Visit Burbank. The BHA has an eleven member board comprised of hoteliers, business leaders, one airport authority employee and one city employee. There are additional city employees who administer the funds and run the day to day operations of the TBID. The headquarters of the BHA is in the Community Services Building where most city business is conducted.

According to public records obtained by a Freedom of Information Act request, on September 23, 2016, the Burbank Hospitality Association made a $50,000 contribution to the “Committee for Yes on Measure B. ” A week earlier, on September 14th, Sunder Ramani, a principal officer of the “Committee for Yes on Measure B,” had attended the BHA’s monthly meeting and during Public Comments asked the BHA to make the $50,000 contribution to his organization.

According to minutes from that meeting: “Sunder Ramani, attended the meeting to represent the ‘Committee for Yes on Measure B,’ a community initiative to educate the public on the importance of voting yes on Measure B during the November 8 th election ballot. Mr. Ramani stated that the purpose of the initiative was to reach the 24,000 absentee voters of Burbank and educate them on the facts of Measure B. Mr. Ramani requested a financial contribution of $50,000 from the BHA which would help create and distribute mailers for this initiative. Since Mr. Ramani attended the meeting and spoke during Public Comment, the item was not on the agenda.”

The vote to award the funds to the Committee for Yes on Measure B was voted on and passed in the same meeting which is a violation of the Brown Act. The vote was not reported properly to the public in a further violation of the Brown Act. The Committee for Yes on Measure B did in subsequent weeks send out mass mailings as described by Mr. Ramani to households across all areas of Burbank.

By handing $50,000 to the Committee for Yes on Measure the BHA has (at the least) violated the government codes and regulations related to public campaigns and open meeting laws as listed below:

  • Regulations of the Fair Political Practices Commission, Title 2, Division 6, California Code of Regulations § 18901.1. Campaign Related Mailings Sent at Public Expense “No newsletter or other mass mailing shall be sent at public expense.”
  • California Government Code 8314 “It is unlawful for any elected state or local officer, including any state or local appointee, employee, or consultant, to use or permit others to use public resources for a campaign activity, or personal or other purposes which are not authorized by law.”
  • California Government Code 54953 (c)(2) “The legislative body of a local agency shall publicly report any action taken and the vote or abstention on that action of each member present for the action.”

Furthermore, the Burbank Hospitality Association is a non-profit corporation formed by the City of Burbank for the purpose of administering the revenues generated by the TBID. A nonprofit corporation to which such administrative functions are delegated must comply with the same laws and regulations as the public entity that is delegating its authority. Epstein v. Hollywood Entm’t Dist. II Bus. Improvement Dist., 87 Cal. App. 4th 862, 873, (2001). Therefore, the Burbank Hospitality Association is bound by the same laws which govern the City Council. Thus, if the City of Burbank was legally proscribed from promoting Measure B, then so would the BHA. According to our (California) Supreme Court, “[i]n the absence of clear and explicit legislative authorization, a public agency may not expend public funds to promote a partisan position in an election campaign. Stanson v. Mott, 17 Cal. 3d 206, 209–10 (1976).

The court recognized a distinction between “promoting” a political position and merely providing information on the issue:

“With respect to some activities, the distinction is rather clear; thus, the use of public funds to purchase such items as bumper stickers, posters, advertising ‘floats,’ or television and radio ‘spots’ unquestionably constitutes improper campaign activity [citations], as does the dissemination, at public expense, of campaign literature prepared by private proponents or opponents of a ballot measure. (See 51 Ops.Cal.Atty.Gen. 190, 194 (1968); Stern v. Kramersky, supra, 375 N.Y.S.2d 235.)

“On the other hand, it is generally accepted that a public agency pursues a proper ‘informational’ role when it simply gives a ‘fair presentation of the facts’ in response to a citizen’s request for information [citations] or, when requested by a public or private organization, it authorizes as agency employee to present the department’s view of a ballot proposal at a meeting of such organization. (See Ed.Code, s 1073;7 cf. Citizens to Protect Pub. Funds v. Board of Education, supra, 98 A.2d 673, 677.)” Stanson v. Mott, 17 Cal. 3d 206, 221 (1976).

The Burbank Hospitality Association used public funds (i.e., TBID tax revenues) to provide campaign materials or literature prepared by private proponents of Measure B, in violation of the Stanson v. Mott. These materials were dispersed in mass mailings that reached all corners of the city of Burbank.
One example:

mailer_cropped

Records and minutes related to the BHA’s public meetings were not available online and had to be obtained by a Freedom of Information Act request. The Committee for Yes on Measure B has recently deleted it’s website and Facebook page and will be the subject of a sworn complaint to the Fair Political Practices Commission to follow this presentation to the public.

Contributors to this document:
David Spell
Amanda Biers-Melcher
Greg Sousa

$50,000 in public funds used to campaign for Yes on Measure B

50k

Here’s a presentation I am making to city council tonight. There may be typos, it’s been a hectic day.

Let me begin by saying, although I was a vocal opponent of Measure B I accept the will of the majority of Burbank voters. This presentation is not about the airport. Instead this is about the Committee for Yes on Measure B and the Burbank Hospitality Association, otherwise known as Visit Burbank. These two bodies have violated laws governing public campaigns and open meetings.

Public funds of at least $50,000 were gifted to unambiguously urge a particular result in an election which is a violation of state law. City staff members took part in the disbursement of these funds, which is also prohibited.

According to public records obtained by a Freedom of Information Act request, on September 23, 2016, the Burbank Hospitality Association made a $50,000 contribution to the “Committee for Yes on Measure B. ” A week earlier, on September 14th,  Sunder Ramani, a principal officer of the “Committee for Yes on Measure B,” had attended the BHA’s monthly meeting and during Public Comments asked the BHA to make the $50,000 contribution to his organization.

According to minutes from that meeting: “Sunder Ramani, attended the meeting to represent the ‘Committee for Yes on Measure B,’ a community initiative to educate the public on the importance of voting yes on Measure B during the November 8th election ballot. Mr. Ramani stated that the purpose of the initiative was to reach the 24,000 absentee voters of Burbank and educate them on the facts of Measure B. Mr. Ramani requested a financial contribution of $50,000 from the BHA which would help create and distribute mailers for this initiative. Since Mr. Ramani attended the meeting and spoke during Public Comment, the item was not on the agenda.”

In a violation of the Brown Act the vote to award the funds passed at that same meeting, but was not reported properly to the public in a further violation of Senate Bill 751. The Committee for Yes on Measure B did in subsequent weeks send out mass mailings as described by Mr. Ramani to households across all areas of Burbank.

This transfer of $50,000 of public funds to campaign in favor of Measure B was illegal. In doing so the Committee for Yes on Measure and the Burbank Hospitality Association board violated the following laws (and others detailed elsewhere):

  • Regulations of the Fair Political Practices Commission, § 18901.1. Campaign Related Mailings Sent at Public Expense
  • California Government Code 8314  “It is unlawful for any elected state or local officer, including any state or local appointee, employee, or consultant, to use or permit others to use public resources for a campaign activity, or personal or other purposes which are not authorized by law.”

I understand that these are serious allegations. And I would hope the city council moves to place an item on the agenda to examine these charges. A small team of concerned citizens has gathered this data and we expect that the city council will take action on this matter.

When the BHA awarded $50,000 dollars to the Committee for Yes on Measure B they struck a blow against the trust we citizens have for our local government. I am appalled by what our team has uncovered and I hope this is an isolated incident. At best it was a mistake… at worst corruption.

In conclusion, this morning I filed a sworn complaint with the Fair Political Practices Commission on this matter.  In the coming weeks there will be further actions taken.

The council will have to take action. Your constituents are watching you, taking note of the reactions tonight and spreading the word. And please remember the liability for these offenses will fall upon staff and possibly the city council.

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