For:  A Community Meeting With City Treasurer, Kevin Kennedy and City Auditor, Kevin Kearney

Purpose:  De-Mystifying the Budget:  An Explanation of the Alameda City Budget – Where We Are Now and What We Need To Do To Gain and Protect Financial Sustainability

When:  Wednesday, May 18th, 2011

Time:  7:30 p.m. to 9:00 p.m.

Where:  Alameda Hospital Community Meeting Room

The economic issues facing Alameda affect everyone who lives or works in Alameda.  Our City Treasurer, Kevin Kennedy and Alameda City Auditor, Kevin Kearney will be explaining the budget and discussing their recommendations for what we need to do to gain financial sustainability and protect against bankruptcy.  This meeting is sponsored by the Alameda Citizen’s Task Force (ACT), a non-partisan group of Alamedans that advocate for open government and community participation.

All Alamedans are invited to attend.  There will be an opportunity for Questions and Discussion from the audience.  Refreshments will be served.

Please Forward This Announcement to Your Neighbors and Friends.  We can solve Alameda’s economic issues if we all understand the problems and work together.

Unions are more often than not a wonderful institution that serve their members well.

Right now, it would do union leaders like yourself some good to look out for the community they serve, even more than their membership for several reasons:

1. If the city goes bankrupt, there will be nothing left for anyone- companies, unions, citizens, customers. A bankruptcy judge will decide. Insisting that your needs are more important than any others in the city does not engender sympathy to your cause.
2. The average citizen does not enjoy a job perk that pays them a large percentage of their wages annually after retirement. The average citizen has to arrange for their own retirement costs. This does not engender sympathy to your cause.
3. Your people are not being attacked. Your benefit policies are being questioned. By personalizing this and comparing our elected officials to the situation in Wisconsin, you’re inflaming rhetoric, and not working towards a solution. This does not engender sympathy to your cause.
4. You seem to forget that the report was generated by City Staff- Fred Marsh and Lisa Goldman, at the direction of Marie Gilmore. The numbers were very plain and easy to understand, as are the causes of the projected deficits. Kevin Kennedy and Kevin Kearney were both invited to speak, also by Marie Gilmore, and they offered their professional interpretation of the data. To call their interpretation of the obvious “a Tea Party coming-out party” does not engender sympathy to your cause.

In short, Mr. Henneberry, you have your hand out, with many demands and strong reasoning in your mind, but in the bigger picture, are you just looking out for yourself and your unions to the detriment of Alameda? Or are you part of the solution to the City’s looming budget crisis and here to help every citizen of Alameda?

We acknowledge the courage and valor of the firefighters who risk their lives to protect the Alameda public; they deserve reasonable wages for their valiant service. We recognize the costs for retirement benefits and health care are increasing. But past union agreements are unsustainable. Other public safety unions throughout the Bay Area like San Jose have stepped up in a mutual collaboration to constructively rework their contracts to help preserve the communities in which they work. If we continue with business as usual, how will we maintain the essential services such as infrastructure maintenance? How will we protect our quality of life that attracted us all to this community?

We, the undersigned, call on the council to deal with Alameda’s budget crisis immediately. Structural changes to city government may be needed. Union employees and other city staff may need to make larger contributions to their pension and health care plans. Switching administration of fire services from the city to county may save money by sharing dispatch and overhead costs.

The point is: alternatives exist. We need an open, active and fully-engaged public dialog in order to be able to identify the mix of near- and long-term solutions that are best for us.

Alameda belongs to all of her citizens, not just those at the helm of city government and their supporters. We are privileged to live in this great community. However, with privilege comes many responsibilities: be informed, share our ideas and preferences with our elected representatives so they can better represent us. The public cannot afford to turn a blind eye to our critical situation. The City Council cannot do their work in a vacuum: let your voices be heard in council chambers. Insist the council do the hard work necessary to craft a responsible budget that safeguards our city’s future.

Eugenie and John Thomson
Dr. Alice Challen
Denise Lai
Eric Cross, Banker
Horst Breuer, Past Econ. Dev. Com.
Bob Perata
Karin Lucas, Past CC
Dianne Coler Dark
Patricia and Paul Bail
Jean and Jim Sweeney
Jane and Jim Burgelin
Gretchen and Arthur Lipow
Jeannie Graham
Don and Miki Roberts
Dorothy Freeman
Dr. Carol Gottstein
Charles Howell
Robert Platt
Noel Folsom
Rita Nesel
Nancy Gordon
Darcy Morrison

What does John Russo have to offer?  A lengthy political career. Contributions to the majority voting bloc of Alameda City Council. Friends in high places. A history of helping SunCal, despite the hazards to the public.

He’s being hired by a Mayor, Vice-Mayor and Councilmember who claim to “…remain committed to rebuilding trust in Alameda. That requires open dialogue, mutual respect and a total commitment to an open process between citizens and their government.”

But this comes after open disrespect of the community by adhering to the agenda put forth during the political campaign last November by SunCal, a blatant violation of the City Charter in terminating the ICM, and now culminates in the installation of an unqualified Perata associate as City Manager after the most artificial and accelerated beauty pageant in this City’s history.

Who, exactly, thinks they’re being clever here?

Update: speaking of clever, community interviewer Kate Quick, appointed by embattled Lena Tam, has substantiated the reports of Russo’s hiring even though it has yet to be officially announced or confirmed by the City:

Alameda, Calif. – Proponents of a fair and progressive parcel tax to support Alameda schools released today documents and a timeline showing how Oakland-based political consultants Erwin & Muir, who have worked on every AUSD parcel tax ballot measure since 2008, and who AUSD paid $300/hour, sat on the Alameda Unified School District’s Master Plan Advisory Group, and performed public relations work for the District designed to scare voters into support parcel taxes, under threat of massive school closures through a doomsday plan known as “Plan B.”

Despite the threats crafted for AUSD by Erwin & Muir, and the failure of a parcel tax ballot measure last year, no schools have closed.

This year, the Alameda Unified School District is again threatening school closures unless their latest parcel tax measure, Measure A, on the ballot March 8th, passes. The District is again citing threats of school closures under “Plan B” and the Master Plan that Erwin & Muir helped craft.

“The Draconian plan of school closures the Alameda Unified School District says it will have to implement if Measure A fails is a fraud. This plan, known as ‘Plan B,’ was not written by educators or even the school district’s accountants but crafted by political consultants whose only interest was to give the district a political tool to scare people into voting for Measure A,” said Leland Traiman, Secretary for the Committee Against Measure A in Alameda.

Below is a timeline of Erwin & Muir’s handiwork in crafting the fraudulent school closure plan:

• 2008 – Then AUSD Superintendent Ardella Dailey starts paying political consultants Erwin & Muir $300/hour.
• May, 2009 – Erwin & Muir begins invoicing AUSD for work on master plan.
• June, 2009 – AUSD Superintendent Kirsten Vital issues AUSD master plan update process newsletter, wherein she identifies political consultants Maggie Muir and Maureen Erwin as members of her Master Plan Advisory Group. Nowhere in the newsletter does she admit that they are political consultants doing work for AUSD at $300/hour.
• June, 2009 – AUSD hires AUSD Trustee Mike McMahon’s daughter, Becky McMahon, as a web designer. Becky joins her mother as an AUSD employee.
• July, 2009 – Superintendent Vital issues a $64,000 “open” purchase order to Erwin & Muir with no written contract, and no AUSD Board of Trustees review or approval.
• August, 2009 – Erwin & Muir issues a $14,000 invoice to AUSD for website redesign.
• December, 2009 – Erwin & Muir issues invoice to AUSD for work on master plan.
• February, 2010 – AUSD issues master plan, with doomsday “Plan B” if parcel tax does not pass.
• March 1, 2010 – Superintendent Vital justifies $300/hour expense with Erwin & Muir as a cost-saving measure.
• May 26, 2010 – Erwin & Muir issues invoice to AUSD for $10,757 for mailing over 41,000 pieces of Measure E campaign literature disguised as a “newsletter.”April/May, 2010 – AUSD says that 11 schools will close if they don’t raise $14 million with Measure E parcel tax.
• June 22, 2010 – Measure E fails at the ballot box. No schools close.
• July, 2010 – AUSD begins planning for new parcel tax, citing master plan and “Plan B” doomsday scenario, saying schools will close without a parcel tax.
• December, 2010 - AUSD says that 5 schools will close if they don’t raise $12 million with Measure A parcel tax, even though State of California school finances are no better.
• January, 2011 – Erwin & Muir being working as campaign consultants for “Yes on A” campaign to pass Measure A. AUSD and “Yes on A” campaign cite the Master Plan and “Plan B” doomsday scenario as a reason to vote for Measure A.
• February, 2011 – Erwin & Muir and “Yes on A” campaign bully and intimidate Alameda Journal editor Connie Rux into pulling an op-ed piece from the newspaper that exposes Erwin & Muir’s role in creating the fraudulent master plan.

The Committee Against Measure A in Alameda has published supporting documentation, and a selection of the many invoices sent to AUSD by Erwin & Muir since 2008 here: http://www.alameda-no-on-a.com/erwin-and-muir-master-plan-b.pdf

About the Committee Against Measure A in Alameda:  The Committee Against Measure A in Alameda is a group advocating for a fair and progressive parcel tax for Alameda schools, combined with honest restructuring in line with the calls for school restructuring from President Obama and California Governor Jerry Brown.

Gray 1 CPB had purchased the loans from Central Pacific Bank in Hawaii, loans that the bank had originally made to Fillmore Sun LLC, and loans that SunCal CEO Bruce Elieff had personally guaranteed. Gray 1 CPB went to court to force Mr. Elieff to make good on the loan guarantees and a jury ultimately found Mr. Elieff liable for for $9 million. Gray 1 CPB is still trying to collect on the judgment.

Mr. Elieff counter-sued Gray 1 CPB and Central Pacific Bank alleging malfeasance on their part, alleging that the bank had acted fraudulent and the guarantees were not enforceable. But a jury disagreed and found that Central Pacific Bank had no intent to deceive Fillmore Sun and found that the Bank made no false representations to SunCal. The jury also found that the Bank intended to keep all promises made to SunCal and Bruce Elieff in the contract documents.

The case is number 30-2008-00112660 in the Superior Court of California, County of Orange.



I verified with both the City Clerk’s and the City Attorney’s office that John made no request for the document from either office. Nor have I at any time granted him permission to access my copy of the letter. This leads me to wonder not only how John learned of the existence of the letter before the recipients did, but who provided him with the document to scan and post online. This reminds me all too well of behavior he has been accused of within the past year.

In the interest of transparency, the average citizen has to put in requests for public documents at City Hall, but apparently John White does not.

(Update 2/2/11, 4:15 PM, added video from 2/1/11 City Council meeting)

In mid-December, there were no pending or pressing employment issues with the City. Marie Gilmore was not yet Mayor. Theresa Highsmith had not yet accepted employment in Barstow. Nobody had any idea that Ann Marie Gallant was under review. The only connection Meyers Nave had to the City at that time was that one of their lawyers was a generous contributor to both the campaigns of Rob Bonta and Lena Tam.

Councilmember deHaan, quoted in the Island today, stated:

“I think we’ve got to be open and honest about what’s transpired. This didn’t happen overnight,” deHaan said.

DeHaan said some members of the council got legal advice in October on a similar matter that was different from what the outside attorney the city hired to investigate whether the decision to put Gallant on leave was handled properly.

The press release issued by the city on January 13, 2011 states, if I may paraphrase, “The attorney we hired says we did nothing wrong. Trust us.” However, there are no actual citations of law or fact to support Attorney Kreisberg’s opinion, nor any definitive explanation of how the Brown Act or City Charter were not violated. Rob Bonta, acting as Mayor in only his second open City Council meeting (because New Mayor Marie Gilmore was off at a Mayors Conference) made sure to read this press release into the record, as if it were fact.

Then, Eugenie Thompson spoke up with this presentation:

So here’s the problem: Gilmore, Tam and Bonta knew this problem was coming in advance, they hired outside counsel to advise them through it, they handled it badly in process, and then issued a weak press release afterward that explained nothing. How does that jibe with “a total commitment to stability, transparency and resolving conflicts in good faith?”

So whose advice should we believe?