Mayor responds to criticisms of city’s finances

Marking the end of her term on the city council, Malibu Mayor Sharon Barovsky delivered her final State of the City address last week Thursday at the new city hall, during which she defended the council’s business decisions from criticisms that 2010 council race candidates have fired at the sitting council members.

Attendees included Los Angeles County Supervisor Zev Yaroslavsky who, in addition to praising Barovsky’s public service achievements, announced that Santa Monica College will be the primary tenant in the county-owned Civic Center.

The SMC satellite campus will replace the Sheriff’s substation. However, one classroom will be converted into an Emergency Operations Center in case of a crisis or natural disaster.

The lease has not yet been approved by SMC but, Yaroslavsky said, “The devils are in the details and I think most of the details have been worked out and most of the devils are gone. I hope we’ll be moving on this very quickly.”

Yaroslavsky also lauded Malibu’s current AAA+ bond rating-the highest possible rank.

“The county of Los Angeles, like every other local government in California, is stressed fiscally,” he said. “I wish we had the bond rating of Malibu. Let me congratulate the City of Malibu. The one objective you can look at [to find out about the condition of] a city, county or state is what Wall Street is saying.”

Business decisions sound,

mayor says

Malibu’s financial state has been a hot topic in the 2010 city council race. Some candidates say the sitting council’s business transactions-the $1.5 million rent deferral for the owners of Malibu Lumber Yard mall and the multimillion-dollar purchase and pending renovation of the Malibu Performing Arts Center (for the new city hall)-have put the city in $25 million to $45 million of bond debt. Those candidates have criticized the council and deemed the transactions wasteful and unethical, especially in an economic recession.

But the city council has unwaveringly defended both business deals and has explained why they benefit the community and how the bonds will be repaid.

The city owns the property that fronts Pacific Coast Highway, bordered by Cross Creek Road, Webb Way and Civic Center Way, and houses the Malibu Lumber Yard, Pacific Coast Animal Hospital and the former Coldwell Banker building. The city will use the revenue from each building rented to fund the development of Legacy Park. The park includes a storm water treatment facility that the city says will reduce the majority of the pollution at Surfrider Beach.

“We have the most aggressive clean water program probably in the state of California. Legacy Park is key to that,” Barovsky said last week. “It’s going to clean all storm water that goes into Malibu Lagoon. We can’t help what [pollution] comes into our city, but at least we’re cleaning up our own.”

As for Malibu Lumber Yard’s rent deferral, the 54-year lease agreement signed in 2008, calls for the owners to pay an annual base rent of $925,000, with the rent increasing every five years by 5 percent. An added feature to the agreement is that Malibu Lumber pays additional money to the city based on the amount of income it receives from mall tenants. The council has allowed Malibu Lumber to defer some of that excess payment.

Malibu Lumber can defer up to $1.5 million in total and the money must be paid back by 2025, with no interest. A city staff report stated that Malibu Lumber LLC heads Richard Weintraub and Richard Sperber requested the deferral because of “significant expenses and unexpected delays in the completion of the [mall],” that the operation and maintenance of the site’s wastewater treatment system has cost five times more than expected, and the “downturn of the economy has also slowed the leasing of the site.”

Barovsky said she voted in favor of the deferral because it included an agreement with Malibu Lumber Yard developers to allow the neighboring Malibu Coast Animal Hospital to hook up to the mall’s wastewater treatment system. That agreement, she said, prevented the city from having to spend more than $1.5 million to implement a state-of-the-art wastewater treatment system at the animal hospital.

“It saved us a lot more money than the interest deferral,” Barovsky said.

Regarding the new city hall, beginning in 2013, the city will pay off bonds for the purchase and renovation of the Malibu Performing Arts Center with annual payments of $470,000 from the General Fund during the course of 30 years.

The building will be converted into the new city hall. The city council plans to move from its current location at the Miramar building on Stewart Ranch Road, where they pay an annual rent of more than $800,000.

“Our lease was going up to $950,000 within three years,” Mayor Pro Tem Jefferson Wagner said last year. “Instead of paying that kind of rent, we will own our own property.”

“The one thing that candidates don’t want to talk about is we have received a triple A bond rating,” Barovsky said in her address. “Only 14 other cities in California are rated that highly. We have a fiscally sound city with an $8 million reserve.”

A variety of projects are scheduled for completion this year: the construction of Trancas Canyon Park in April, and Legacy Park in September, among others.

The renovation of Malibu Public Library is also slated to begin in the upcoming months. It will be closed for a year starting June 1.

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