By Allen Payton

The Antioch City Council will hold a special workshop to receive and discuss an Economic Analysis of Commercial and Recreational Marijuana Uses Within the City this Saturday, March 24 at 9:00 AM at the Antioch Community Center at Prewett Park, 4703 Lone Tree Way.

Possible businesses could include manufacturing, cultivation, test laboratories, distributors, retailers and microbusinesses.

According to the report by consultants Cannabis Support Services, the impacts of a “cannabis program” to the city government include administration and compliance, monitoring, audits, and education and would require the following city and county departments to be involved: Planning, Code Enforcement, Finance, Police, Fire, Economic Development, City Attorney, and Public Health, as well as Public Utilities.

In order to start such an industry in town, the report says the city needs to “Know what resources will be required to develop and administer a cannabis program.” Those include” Planning and Permitting, Initial and On-going Inspections – building and safety, fire and hazmat, public health; Tax and Compliance Audits, Prevention Programs, Education Programs, Public Relations/Media, Data Collection and Interpretation, and an evaluation of the existing workload for City Staff.”

The report also includes challenges with approving a cannabis industry in town: “Future federal enforcement is unclear; Lobbying effort to eliminate all cannabis specific taxes (as with alcohol or tobacco); Traditional banking access still limited – asset seizure potential limits lending; Emerging cashless sales options are not fully tested; Continued impact of the black market; Economic stability of the commercial market; Public health and safety issues – DUI, CUD, development of adolescent brain; and Available internal and/or external resources.”

The council can decide to continue its current ban on all segments of the commercial cannabis industry, which includes deliveries into the city, or they can authorize any or all segments, and then regulate commercial cannabis businesses and personal cultivation, as well as impose taxes and fees.

The public will have the opportunity to give their input to the council at the workshop, but no decision will be made. Any decision by the council would occur at a future meeting.

See the complete report, here: Antioch Commercial Cannabis Industry report

By Sergeant Matthew Koch, Antioch Police Field Services Bureau

On Tuesday, March 20, 2018 at 5:57 pm, Antioch officers responded with medical personnel for a reported vehicle accident located on E. 18th Street near Hargrove Street. Upon arrival, it was determined a silver BMW traveled southbound on Hargrove Street made a westbound turn onto E. 18th Street. A green Honda was traveling westbound on E. 18th Street and collided into the BMW. The Honda was occupied by a 52-year-old female driver and an 8-year-old male passenger. As a result of this collision, the Honda traveled across the median and into oncoming traffic in the eastbound lanes of E.18th Street. The Honda then collided into a Toyota mini-van, occupied by a 27-year-old female driver and a 9-year-old female juvenile passenger.

The occupants from the Honda had to be extricated from the vehicle. Both occupants from the Honda and Toyota mini-van were taken to an area hospital for injuries sustained from the collision. One of the occupants suffered serious but non-life-threatening injuries. Alcohol and/or drugs did not appear to be a factor in this collision.

Anyone with information regarding this case is encouraged to call the Antioch Police Department non-emergency line at (925) 778-2441. You may also text a tip to 274637 (CRIMES) using key word ANTIOCH.

This preliminary information is made available by the Field Services Bureau. There will be no further information released regarding this case at this time.

Approve $95M for new county administration building

By Daniel Borsuk

Community activists wanting Contra Costa County Supervisors to launch a probe into the way Sheriff-Coroner David O. Livingston operates the Martinez jail and the West County Detention Facility, the site of numerous allegations of inmate abuse, hit a brick wall on Tuesday as supervisors refused to conduct their own investigation into how the jails are operated by the sheriff.

Livingston, an elected countywide official, is up for re-election in June, but when the March 9 filing deadline rolled around no one had filed to oppose the sheriff in the upcoming June 5 primary election.

About 12 speakers asked supervisors to launch an investigation into Sheriff Livingston’s jail practices, even when two independent investigations, one that United States Senator Diane Feinstein has asked the United States Immigration and Customs Enforcement (ICE) to undertake dating back to December and another that California Attorney General Xavier Becerra is conducting, have yet to reveal their findings.

The Contra Costa Sheriff has come under fire from human rights organizations for the way he has treated male and female inmates at the North Richmond and Martinez jails.  At the West County facility female inmates under ICE custody have been allegedly mistreated whereby they cannot use restroom facilities forcing them to defecate in their clothes or in plastic bags.  The sheriff has also been criticized for having a contract with the U.S. Marshall’s Services and for vocally opposing interim District Attorney Diana Becton, the Board of Supervisors’ pick as DA.  Becton is up for election in the June primary election against senior district attorney Paul Graves, lawyer Lawrence Steven Strauss and Concord attorney Victor A. Segovia.

Even though the sheriff is an elected official, some speakers demanded Sheriff Livingston’s immediate resignation.

“Twenty-seven women have complained of being abused under his administration.  The sheriff should resign.  You should at least launch an investigation of the jail,” said Melvin Willis, a Richmond City Councilman and a representative of the Alliance for Californians for Community Empowerment.

“It’s time for Sheriff Livingston to resign,” insisted Kathleen Everson of Walnut Creek.  She said supervisors should conduct an independent investigation into the sheriff’s office.  “It’s time to end the sheriff’s contract with ICE.”

“What’s up with you guys?” asked Linda Olivera of Community Initiatives for Visiting Immigrants in Confinement.  “You need to show the initiative.  This is your facility.  This is a horrible sheriff.”

“I don’t think you guys are going to do a damn thing,” said Mercy Garetz of Hercules.  “We’re going to where the money leads.”

“I’m waiting for the independent report from the state attorney general to come out either at the end of this month or next month before making any decisions,” said District 1 Supervisor John Gioia of Richmond.

Board chair Karen Mitchoff of Pleasant Hill acknowledged that state attorney general Becerra is conducting his investigation into the West County jail, but she also disagreed with statements made by Concord clinical psychologist Harmesh Kumar, who said the Sheriff’s Office has slashed mental health services because of county funding cutbacks.  Mitchoff said the board will take up at its March 27 meeting a $3 million proposal to fund mental health services for the jails as a consent item.

Kumar is a candidate running for the District 4 seat that Mitchoff currently occupies.  Also running for the District 4 supervisorial seat is Justin Wedel, 39, of Walnut Creek.

New County Administration Building Approved 2018 0320CCC BOS New Admin Bldg

After decades of despair, supervisors flashed the green light for Hensel Phelps Construction Co. to begin construction immediately on the new state-of-the-art county administrative building, Emergency Operations Center and Public Safety Building in Martinez.

The county buildings will cost $95.8 million to construct and will replace an antiquated administration building that has been in use since 1960.

The new, three-story administration building is to be constructed on vacant Pine Street property near the existing administration building at 651 Pine St.  The new three-story, 72,000 square foot building will accommodate 150 county employees.  The Emergency Operations Center and Public Safety Building will accommodate about 50 employees, said Chief Assistant County Administrator Eric Angstadt.

Hensel Phelps Construction Co. beat Swinerton Builders in the design-build selection process that the county conducted.  Supervisors approved $110 million in construction bonds in May 23, 2017 to fund the construction of the project that is slated to be completed in April 2020.

When the new buildings are constructed, the 651 Pine St. building will be demolished and a parking garage is proposed for the site.

Supervisors Approve Funding For St. Paul’s Commons Development

A proposed 46-unit residential development, including a manager’s unit, designed for “extremely low, very low and low-income households with AIDs” got the green light for federal funding from the board of supervisors.  Supervisors unanimously approved the item as a consent item.

The St. Paul’s Commons Development will be constructed on church property at 1860 Trinity Ave. in Walnut Creek under a 77-year lease.

The developer wants to borrow via the county $2.6 million of HOME funds and $232,681 of Housing Opportunities for Persons with AIDS Program funds from the U.S. Department of Housing and Urban Development.  St. Paul’s is also receiving $5.6 million and $11.7 million in Federal Low-Income Housing Tax Credits from the City of Walnut Creek.

Leonard King Herendeen

July 10, 1929 ~ March 15, 2018

Resident of Antioch, California

“HE CAME, HE SERVED, HIS MEMORY LIVES ON”

Len was born in Long Beach, CA. He joined the Marine Corps. on July 30, 1946 and was discharged on January 28, 1948. In 1950 he married his college sweetheart, Jodena and bought their first home with the G.I. Bill. Two daugh­ters soon followed, Mary Herendeen and Terry Gurney.

He graduated from Long Beach State College with a Bachelor of Science degree in 1958. He received his Master’s Degree in Public Education in 1969. Len joined the Los Angeles County Sheriff’s Department in 1954. During the 25 years he served, he went up the ranks to Inspector.

He became a Mason and served for over 50 years. He was a Past Master. When he retired in 1979 he became the Police Chief of Antioch. He retired in 1991.

In December 1994 he was appointed Mayor of Antioch by the City Council and served through December 1996.

He married his second wife, Barbara in 1983 and they had 34 wonderful years together. She added three daughters to the mix; Debra Francisco, Sharon Moreland and Rachel Friedman.

Barbara would like those who worked with or knew Len to please join the family at a Celebration of his life at the Lone Tree Golf Course on Thursday, April 5, 2018 at 5:30p.m. Seating is limited to the first 200 people.

“liabilities with CalPERS are only going to continue to grow even with our contributions.” Council to establish Budget Stabilization Fund with $14.8 million, may form an additional trust fund to cover the liabilities.

By Allen Payton

According to the staff report for the mid-year budget review during the Antioch City Council meeting on Tuesday, March 13, 2018, the city’s unfunded pension liabilities more than doubled since 2013 from about $78 million to almost $160 million as of last June 30th.

The staff report on the item reads as follows:

As presented by the City’s independent auditor to the Council on February 13th, the City’s total unfunded liabilities (pension and OPEB) as of 6/30/17 were $159,850,085. This is a figure that keeps exponentially growing due low investment earnings and/or losses and changes in methods, assumptions and actuarial policies by CalPERS.  Starting with 6/30/18 financial statements, the OPEB liability will be required to be shown in our financial statements as a liability as well rather than just as a footnote to the financial statements.

Below is a historical snapshot of the City’s unfunded liabilities:

You will notice that the OPEB liability is the same in 2014 and 2015 and then again in 2016 and 2017. Current accounting rules only require a valuation, every two years.  However, with the new GASB pronouncement that will require agencies to begin recording the liability on the face of the financial statement beginning with 2017-18, we will be required to get a new valuation annually which will provide an updated liability amount annually.

Since 2013, the City’s total unfunded liabilities have more than doubled from $77,959,731 to $159,850,085 entirely due to CalPERS actions that were unavoidable by the City (or any CalPERS agency).  With every payroll, the City contributes to the unfunded liability as required by CalPERS.  On a very successful note, during this fiscal year, the City was able to completely eliminate the net pension liability of $652,945 for the Police Supplementary Plan due to the stipulation in the one-time revenue policy that requires the City to apply a minimum of 50% to unfunded liabilities.

The unfortunate side of all of this is that our liabilities with CalPERS are only going to continue to grow even with our contributions.  As pointed out to Council by our auditor, CalPERS has reduced the discount rate be applied to plans and with the next valuation the City will use for reporting at 6/30/18, our liabilities will probably increase at least another $25M if not more as this means CalPERS is assuming it will not earn as much money to offset liabilities.  We have already been informed by CalPERS that our contribution rates will be increasing significantly over the next several years due to the change in discount rate. As presented to Council last April during the budget workshops, the City’s CalPERS rates are projected to increase just over 7% per year for our Safety Plan and just over 4% per year for our Miscellaneous Plan.  However, these projections provided by CalPERS were prior to them adopting a reduced 20-year amortization period for gains and losses on February 14th of this year. This means all agencies will be facing even larger increases in contributions starting in FY22.  At this time, CalPERS has not released any projections as to how this will impact contribution rates. Under the current amortization methods in place, the City’s PERS contributions are projected to increase approximately $5.2M between FY20 and FY22.

Section 115 Trust Considered

Section 115 Trust With the pension crisis becoming increasing prevalent across all agencies, the concept of a Section 115 Trust has been introduced as a way to tackle looming costs and historically high unfunded pension liabilities.  Council asked for information on a Section 115 Trust.

A Section 115 Trust is an irrevocable trust established to pay for pension obligations. Many agencies throughout California are exploring this option as a way to help fund current and future pension costs.  Once established, an agency would select an investment portfolio they feel best meets their objectives and desired return.  There are advantages and disadvantages of establishing this type of trust. Providers of the trusts tout the advantage of having a more secure, steady investment stream verses [sic] the large sways PERS has been experiencing; thus building stable income for the portfolio verses significant losses.  In addition, the money is secured and set aside for pension payments reducing budget impact for future increases pension costs.  Most agencies that have established trusts thus far have significant funds they have been able to set aside.  For example, the City of Walnut Creek set aside almost $13M.

Disadvantages of establishing a trust are that per accounting guidelines, any money set aside cannot show as a reduction of the unfunded/net pension liabilities on an agency’s financial statements.  Thus, if an agency has $100M in unfunded pension liabilities but has $10M in a trust, the pension liabilities still show at $100M in the financial statements. Another disadvantage to consider is that once a City puts money into the trust, it cannot use it for any other purpose other than pension.  Therefore, if an agency has immediate need for money for an unexpected emergency, project, etc. that money is unavailable to use.

Keep in mind that at any time the City can make a lump sum contribution towards our unfunded liability to CalPERS directly which will reduce the unfunded liability. In addition, as mentioned prior, each payroll, a portion of the payment required to be remitted to CalPERS is for the unfunded liability.  For OPEB, the City is only required to pay-as-you go to current retirees.  There is no mandate to pay beyond that.  The City’s one-time revenue policy also requires that a minimum of 50% of one-time revenues be applied to the City’s unfunded liabilities and as mentioned, this policy has allowed the City to eliminate the liability for one of our plans.

Council Agrees to Create Budget Stabilization Fund

The staff report included the following: “At this time, staff recommends using our additional reserves (above the 20% reserve policy minimum) to establish a Budget Stabilization Fund (Stabilization Fund) instead of using any reserves to establish a trust.  A Stabilization Fund would allow for setting aside any reserves over 20% in the General Fund into a separate reserve fund.  In any year revenues are projected to be lower than expenditures, the Stabilization Fund would supplement the difference, thus reflecting a balanced budget.  The Stabilization Fund will help offset any unexpected budget variances, whether it be the result of temperamental revenues, unanticipated projects or projected future increases in CalPERS contributions.  The City will have control of how the funds are spent verses the legal constraints of a trust as at the end of the day, the City’s first priority is providing essential services to our citizens on a daily basis and having access to funding to do so. In addition, as Council can see from the chart of the historical liabilities, we are on a runaway train that requires statewide structural modifications to provide realistic sustainable solutions; not just for Antioch but other PERS public agencies that find themselves in much more, dire financial circumstances. However, having the funds to annually meet the required obligations and supplementing with one-time revenues as available is still fiscally prudent and can be accomplished with the Stabilization Fund.

If the City Council were to agree to the establishment of this reserve, there are two options:  budget for the full amount of reserves above 20% as of June 30, 2017 to initially establish the fund which equates to $14,872,454 and then establish a policy that in any year that revenues exceed expenditures and reserves are at least 20%, the excess will be placed in the Stabilization Fund and in any year expenditures exceed revenues or the unassigned General Fund reserve falls below 20%, the Stabilization Fund will supplement the General Fund; alternatively, Council can decide on a lower amount to establish the fund and then for any amount of revenue that exceeds expenditures starting with fiscal year 2017-18, that money will be placed in the Stabilization Fund.  If the Council should choose the first option, be aware that in this fiscal year the budget and actual will reflect being severally out of balance by an additional $14.8M which may appear shocking, however, it would not be the result of severe overspending, but due to responsible fiscal planning.”

Following the staff presentation by City Finance Director Dawn Merchant, Councilwoman Lori Ogorchock was the first to speak, saying she supported the creation of a Section 115 Trust.

“I understand what you’re saying about a runaway train but, we’re already on it,” she said. “There’s not a problem with having both funds. I’m asking you to put it into an account to make some money off the money.”

Mayor Sean Wright and Councilman Tony Tiscareno didn’t have a problem with creating both.

Tiscareno was concerned “if something catastrophic happens…if we’re hurting for a certain amount of money and we have a pot of funds we can’t use, that’s my concern.”

A consensus of the council was to establish the Stabilization Fund using the $14.8 million from the City’s General Fund reserves. They can also decide later if they want to establish the Section 115 Trust at a later meeting.