Alameda Point Leases: The smartest guys in the room
Alameda Point’s long term lease issue doesn’t seem to want to die. Does it pay for itself or not? The short answer is, it has: They have a fund balance of about 2.1 million this year (excluding the 2.4 million loan from the General Fund), common sense (and accounting) says that if they have cash in the bank, they have made more money than they’ve lost. But…and I won’t get into this, they should have over $3 million (20-25% reserve) AND they have no cash to cover major infrastructure needs, so long-term, not so much. But I’ve already gone off topic.
I wanted to talk about the conversation around the leases, especially with Darcy Morrison running around claiming that Alameda Point has generated $126 million in net income over 12 years. As proof, she points to David “Action Alameda” Howard’s “analysis” of the ARRA’s cash flow analysis. That should have been her first tip off that she should check her math. The second should have been the overall post that she links to, which claims that Alameda Point is making money because they have revenue and then adds up a bunch of numbers that don’t mean what Howard claims they mean.
Morrison’s math, based on Howard’s sheet (and actually written on it) actually ignores $70 million in “Property Management Expenditures” (aka costs) which are clearly included in a line called “Total Expenditures” which totals $158 million. Of course, this line is wrong as well, Howard’s personal subtotals are missing over $3 million in costs because he forgot to total them.
I converted the PDF from Action Alameda (the base numbers are Howard’s, I’ve only corrected the totals and labels), it’s a google spreadsheet so you can see the math for yourself:
Second, Morrison and Howard manage to fall victim to some really bad labeling on the city’s part. The cash flow analysis shows two lines, “Total Lease Revenue” and “Total Revenue,” one of which is not what it says it is. “Total Lease Revenue” is the actual income from the Point.
“Total Revenue” should be labeled “Cash Balance after Revenue” because it is a combination of the Actual Revenue and the Beginning Fund Balance for the year (This is confirmed with Leslie Little at Development Services). Howard and Morrison are double counting $52 million as “revenue” the kind of accounting that got Enron in trouble.
Here’s what the City’s numbers show (I can’t figure out the 2005 numbers, so I’m starting in 2006).
2006 – Beginnig Fund Balance: $6,591,526
2017 – End Fund Balance: $3,167,008
Somehow, Morrison and Howard would like Alamedan’s to believe that despite the fact that Alameda Point will have lost $3.4 million over 12 years (without major capital expenditures like the FISC fire), the Point’s revenues “generally exceed the expense to maintain it.
As per usual, numbers, simple math and accounting comprehension escape David Howard, who Pat Bail says is “always 100% right on the facts” (some day I’ll dig up that video gem!)
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DLM
January 14th, 2010 at 11:31 am
John: This is so garbled that I have difficulty following it but in any event:
1) This is the city’s spreadsheet in Excel, with all the totals in place in the original version. Nobody “added up” anything — why would they?
2) I got this spreadsheet via SunCal and the AARP (?) group. Ask them for a copy to compare against the one above, and you’ll see that they’re identical.
In any event, I doubt that anyone will understand what you’re saying here.
And finally, I think it’s inappropriate to personalize this issue. It has nothing to do with the subject at hand.. If you disagree with someone, then come up with a better argument.
John Knox White
January 14th, 2010 at 11:44 am
Darcy,
You and David have put yourselves out as experts who have irrefutable data, something you’ve done many times.
over and over again, it often turns out that your info is either bad or misrepresented.
It’s not “personalizing” a criticism to make the connection between incorrect information and the continuous fount of said info.
dave
January 14th, 2010 at 12:01 pm
You and David have put yourselves out as experts who have irrefutable data, something you’ve done many times.
==========================
slow day, I needed a laugh, thanks John
Lauren Do
January 14th, 2010 at 12:15 pm
DLM: Perhaps you should check with the creator of the initial spreadsheet before you assume that the City was the entity that created the first column which totals items like the “Projected Fund Balance” in a lump sum.
As suggested by John above, the formulas used to calculate the first “Total” column are incorrect. Something that I doubt that the City would have produced.
Jon Spangler
January 16th, 2010 at 1:57 pm
If Howard and Morrison had followed good professional and journalistic practice as reporters and analysts (roles they are de facto performing by “broadcasting” their “facts”), then–at the very least– they should have verified both the numbers and their own analysis by checking them against independent and reliable sources such as Leslie Little of the City of Alameda.
Furthermore, as accurate and careful reporters, they should be happy to “show their work” and declare who (or what) their sources were for verifying both the numbers they received (or generated?) as well as the accuracy of their analysis. Any professional reporter or journalist would do the same, as John Knox White has documented in his post above.
If Howard or Morrison failed to justify, verify, or otherwise corroborate the accuracy of their sources, their numbers, and their analysis (analyses?), then their statements should not be viewed as being reliably accurate or trustworthy. If their “facts” or conclusions are not independently supported (and they do not seem to withstand scrutiny) then Howard and Morrison should stop misrepresenting the truth and apologize for deceiving their readers and fellow citizens.