Tag Archives: Stockton

Web-only version: City manager to ask council to stop paying bonds, OK mediation

Central Valley Business Journal, February 2012

By KEITH MICHAUD/Business Journal Editor

STOCKTON – Officials will ask the City Council on Tuesday to approve various fiscal adjustments, suspend payments on $2 million in bonds, and OK financial mediation to prevent the city from plunging closer to bankruptcy.

“It’s about restructuring,” Stockton City Manager Bob Deis told reporters in outlining the city’s “dire fiscal situation” and the proposed plan to avoid Stockton City Sealinsolvency. “It’s not about bankruptcy. … Despite what’s been reported, we are not asking the council to file Chapter 9.”

Deis and his staff are proposing the move to cover the anticipated $15 million deficit through June and to give city staff a chance to meet with creditors, retirees, current employees , and other interested parties in state-mandated mediation. Assembly Bill 506 requires that cities now seek mediation to mitigate their financial problems before declaring bankruptcy. Bankruptcy attorney Marc Levinson, whose law firm worked on the city of Vallejo bankruptcy, was on hand to explain the mediation.

“The mediation then proceeds over the next 60 days unless agreement is reached sooner,” according to material Levinson made available. “It may be extended an additional 30 days if requested by the (city) or a majority of interested parties.”

As it is, Deis forecast the city would face a $20 million to $38 million deficit for the 2012-13 fiscal year.

“The ‘best case’ assumes we continue to declare an emergency and continue to impose labor concessions,” read a portion of Deis’ report to the City Council in the agenda packet. “The $38 million assumes we lose in court with unions concerning the effects of prior fiscal emergency declarations and we must ‘turnoff’ past concessions.”

Several factors resulted in the financial problems facing Stockton, said Deis, including past bookkeeping errors and fiscal mismanagement.

“It is apparent that past financial practices of former city staff and possibly contractors, that were not disclosed to the (City Council), have contributed to the city’s current financial situation,” wrote Deis in the report to the City Council. “Given the grave consequences now being faced by the city, the city manager and city attorney wish to investigate these practices for possible recourse.”

Deis did not anticipate a criminal investigation, he told reporters, but instead a probe that could result in civil remedies.

A greatly expanded city retiree health insurance commitment in the 1990s appears to be legal, Deis said Friday, but unsound and had characteristics of a Ponzi scheme.

“We are now at the back end of the ‘scheme’ and are having to pay for it,” Deis wrote. “Next year, we expect to pay more for retiree health insurance than for our current employees. This coupled with enhanced retirement benefits, accelerated the problem.”

The city also issued a huge amount of debit betting on “hyper growth” in the past decade would continue, and now the general fund is backfilling some of that debit. Generous labor contracts over the years were unsustainable, said Deis, and mediation will include labor groups. The recession in the Central Valley and the state’s “raiding of our funds” also has worsened the fiscal picture.

“No one of these factors is the cause of our current problem,” Deis wrote. “However, the interplay of all these factors has created a situation where we can’t ‘grow our way’ out of the problem and no amount of forward looking financial planning will properly fix it.”

Deis said Friday that even further public safety cuts were “not acceptable,” compensation reduction for current employees would hurt the city in the long run by preventing the city from attracting the best people for city jobs, and higher taxes, especially with the region’s high unemployment, would not have community support.

“We see no viable alternative to restructuring our finances,” said Deis. “We see a healthy future for Stockton.”

Deis was also clear to say that the current City Council was not to blame for the current situation and that city staff that had been responsible were “long gone.”

Contact the author about this and other stories at kmichaud@cvbizjournal.com.

 

Partnership chief brings experience, relationships to benefit local economy

Central Valley Business Journal, December 2011

By KEITH MICHAUD/Business Journal Editor

Six months isn’t much time to get acclimated to a new job.

Especially when there’s a chance success – or failure – in that job can have a vast influence on the economic vitality of a region, namely San Joaquin County and the rest of the Central Valley.

Ammann

Mike Ammann has been the president and CEO of the San Joaquin Partnership for about six months. Fortunately, that transition is being made easier by several things: the Partnership’s goals and mission are similar to those of agencies Ammann has headed for decades at both ends of the Central Valley; a stable and experienced Partnership staff; an engaged board of directors; and the groundwork laid by Mike Locke, the Partnership’s president and CEO from 1994 to 2011, who is now a Stockton deputy city manager.

“It’s been great. I knew this organization, because I had competed against it,” said Ammann, who held similar posts in Solano County and Bakersfield. “I’ve kind of worked both ends of the Central Valley.”

Ammann and the experienced team that was in place at the Partnership when he arrived have been working on the strategic plan Locke put in place, while also looking forward to drawing new businesses to San Joaquin County and holding onto those already here.

Ammann believes the region is primed to be the “center of commerce” for Northern California. After all, the region has two railroads – Union Pacific and Burlington Northern Santa Fe – with intermodal service, an under-utilized airport, direct access to Interstate 5, state Highway 99 and east-west routes, and ample and versatile commercial mega-sites. The Port of Stockton is merging onto the “Marine Highway,” which will greatly increase import-export activity there.

One moment Ammann is sitting at a small conference table in his March Tower office overlooking Interstate 5 and the Spaghetti Factory explaining complicated economic development strategies and the next he is jumping up from the table to scribble lines on a whiteboard to explain a point before darting momentarily out of his office to gather more documents to illustrate his points. Ammann is optimistic for San Joaquin County’s future and appears driven to draw companies to San Joaquin County. And if not San Joaquin County, then to the Central Valley or somewhere in California.

It is the relationships forged over the years that let Ammann and his staff  build on past work and look ahead to new goals, such as drawing high-tech businesses to the region.

Ammann brings with him more than 30 years of those relationships. He started his economic development career in the 1970s as the research director for the Grand Rapids (Mich.) Area Chamber of Commerce, while attending Grand Valley State University.

Later, he was the executive director at the Kalamazoo County Economic Expansion Corporation before returning to the Grand Rapids Area Chamber of Commerce, the second largest in the state, to be that organizations vice president for economic development.

In the early 1980s, Ammann was among a group that founded the Washtenaw Development Council and his team developed the first countywide economic development marketing program for the communities of Ann Arbor, home of the University of Michigan, and Ypsilanti, Mich., with Eastern Michigan University. He later worked with the University of Michigan’s College of Engineering to help faculty and researchers in launching technology start-ups and in the commercialization of patents and discoveries.

He and four partners founded Online Technologies, the oldest Internet services providing company in Michigan.

After five years in Ann Arbor, Ammann successfully turned around a 350-acre real estate development at the Arizona State University Research Park in Tempe, Ariz. That was followed by another success, this time in Bakersfield. Ammann and his management team were able to rebuild the staff, volunteer core, and finances of the Kern Economic Development Corp. That success included drawing a State Farm Regional Service Center to a 460,000-square-foot building on 60 acres that resulted in 1,000 new jobs.

Ammann also served as the secretary of the board of directors for TeamCalifornia, a private nonprofit corporation that brings together economic development organizations from across the state to market their communities for business investment and job creation in the state. He was elected president of the organization in May 2008.

He was the president of the Solano Economic Development Corp. in Fairfield for almost eight years before joining the San Joaquin Partnership.

Contact the author about this and other stories at kmichaud@cvbizjournal.com.

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