City Beat

By Tony Bizjak, Ryan Lillis and Dale Kasler
tbizjak@sacbee.com

Sacramento city officials will release details tomorrow of the arena deal reached earlier this week with the Kings, including this notable number: $255,530,000.

That's the amount Mayor Kevin Johnson and his negotiators agreed the city officially will contribute to building an arena in the downtown railyard by 2015.

The official price tag of the arena was also bumped up from $387 million to $391 million.

ORLANDO, Fla. - A third day of negotiations are underway over a plan to finance a new downtown sports arena in Sacramento.

Mayor Kevin Johnson said this morning "people are going to work as long as it takes" today. Still, the sides have until Thursday to finalize a deal and most indications are that the talks will extend beyond today even if the sides leave Orlando.

"Everyone has a good mindset and is ready to problem solve today," the mayor said.

ORLANDO, Fla. - So far, the headline from the ongoing arena talks might be that the Maloof family, who own the Kings, have expressed a desire to stay in Sacramento.

"They said they want to be in Sacramento," Mayor Kevin Johnson said, emerging for a quick break from the talks. "That was a question I just had to ask for our community because I don't want us to be just coming up with excuses of why this deal won't work if somebody doesn't want to be here. They said clearly they want to be in Sacramento.

Negotiations over a new downtown sports arena could go late into the night.

ORLANDO, Fla. - Negotiations today between city officials and the National Basketball Association over the funding of a new sports arena were "constructive," the head of the mayor's arena task force said. Talks will continue Sunday.

Chris Lehane, who leads the Think Big task force, said the talks were "positive, we made progress on a number of items."

Lehane said the focus of the talks was on "whether (the Kings) are in a position to provide the level of support we deem necessary."

ORLANDO, Fla. - As negotiations get underway over how to fund a new downtown sports arena, the focus of today's talks is the contribution to the project by the Maloof family, which owns the Sacramento Kings. Those talks had been scheduled to end at 2 p.m. Eastern Time, but had extended past 4 p.m.

City officials have asked the Maloofs to contribute between $70 million and $90 million toward the project, according to a source briefed on the negotiations who was not authorized to speak because the talks are ongoing. The source indicated that all other major issues with the arena financing plan have been addressed.

It is not clear how far apart - if at all - the Maloofs and the city are in terms of the Kings' contribution to the $387 million project. But sources expressed confidence that the sides were within a "solvable" distance.

ORLANDO - As the city enters the most important weekend in its years-long arena effort, State Senators Darrell Steinberg and Ted Gaines have a message for the NBA: the city has done its part and it's time for you to step up.

In phone interviews this morning, both Gaines (R-Roseville) and Steinberg (D-Sacramento) said city officials had crafted a solid financing plan for the $387 million downtown arena.

"Our message is that Sacramento has always done right by the Kings and the NBA and it's time for the NBA to do the right thing and make a long-term commitment to Sacramento," Steinberg told me. "Fundamentally, the NBA asked the community a year ago to put forward a serious proposal to build a downtown sports and entertainment complex and the community has done just that. This needs to end with success."

ORLANDO - Mayor Kevin Johnson and other city officials are on their way here for the most important weekend in the city's years-long fight to build a new arena.

Johnson, City Manager John Shirey and Assistant City Manager John Dangberg are scheduled to arrive around 3:30 p.m. Eastern Time. They are expected to be joined in Orlando by Dan Barrett, the sports consultant assisting the city in its negotiations with the NBA and Sacramento Kings, and members of the mayor's Think Big arena committee. Negotiations with the NBA are scheduled for Sunday.

Meanwhile, state Sen. Ted Gaines (R-Roseville) told me this morning that he feels "the city of Sacramento has done their part in terms of laying the table for what should be a successful agreement" on the arena. Gaines is the co-chair of the Think Big committee, which has explored the financing options for the arena.

Seattle officials released the outline Thursday of a proposal to build a new NBA arena in the city.

The arena would be funded with $300 million in money from San Francisco hedge fund manager Chris Hansen and a group of investors, along with $200 million in bonds issued by the city of Seattle and King County. Those bonds would be paid back by rental payments from arena tenants and tax revenue generated by the facility, said Mayor Mike McGinn.

As for which NBA team is in Seattle's sights, McGinn said he was not speaking with the league and was leaving that up to Hansen. Officials said the arena would not be built without an NBA tenant.

Mayor Kevin Johnson finally has an opponent.

Sacramento bounty hunter and four-time mayoral candidate Leonard Padilla told me today he is definitely running against Johnson after pulling candidacy papers from the city clerk's office on Tuesday. Padilla's main campaign issue: the arena.

"I don't want the Maloofs (who own the Sacramento Kings) given one red cent, much less a quarter of a billion dollars," he said, referring to a proposal for the city to lease downtown parking to help finance a new sports arena.

Fellow Bee reporter Tony Bizjak and I will be hosting a live online chat at 6:30 tonight, fielding your questions on the city's ongoing push for a new arena.

Bizjak and I will be at City Hall, where the City Council will debate whether to have city staff continue talking to private companies interested in leasing downtown parking, a key peg in the city's proposed financing deal for a new arena.

Tonight's chat will be followed by another forum tomorrow at noon, when I'll be wrapping up the council's vote and the next steps in the arena process.

Join the chats here on the City Beat blog or at sacbee.com/live to share you comments and questions.

Sacramento Supervisor Phil Serna said today he is not running for mayor, ending weeks of speculation that he might take on Mayor Kevin Johnson.

In an email sent to the media, Serna said he wanted to remain focused on "job growth in places like McClellan Business Park, Downtown Sacramento and the Power Inn Corridor, and I'm dedicated to protecting the American River Parkway."

"Running for mayor now would put campaigning over continuing to give my attention to these and other priorities," he said. "I'm not prepared to do that."

The City Council appears ready to overwhelmingly support moving forward with the arena process tonight - with one councilman predicting the vote could be unanimous.

City staff is asking for permission from the council to dive into deeper talks with the 10 private firms interested in leasing downtown parking, the key piece of the financing plan for a new sports and entertainment complex. Tonight's vote is seen as an incremental step in the arena process, setting up a pivotal Feb. 28 meeting at which the council would vote to approve or reject the facility's full financing plan if one is cobbled together by then.

While four council members voted last week to place the parking element on the June ballot - a move that likely would have killed the arena deal - at least one of those council members said he will vote in favor of moving forward tonight.

Marriage rights activists are stepping up their pressure on Mayor Kevin Johnson to join dozens of other elected officials in supporting gay marriage.

Supporters of gay marriage were expected to drop off 338 signatures this morning at City Hall urging Johnson to join the Mayors for the Freedom to Marry. Despite telling reporters last week that he would read the pledge, Johnson still hadn't read it as of this morning.

"Sacramento is one of the most diverse cities in America and a city like ours needs leaders willing to stand up for all of us," Sam Catalano, president of the Stonewall Democrats, said in a statement. "Supporting marriage equality helps make our city stronger both socially and economically. We are all exceptionally hopeful that Mayor Kevin Johnson stands on the right side of history and we eagerly await his response."

In what would likely be the make-or-break moment of the city's work toward building a new downtown sports arena, city officials are hoping to seek City Council approval of a financing plan for the facility at the Feb. 28 council meeting.

That meeting will come two days before an NBA-imposed deadline for Sacramento to have a funding plan or risk losing the Sacramento Kings. While all sides have been working on the financing "term sheet" for weeks, City Council approval of the plan on Feb. 28 is likely the step the NBA is looking for to be convinced an arena plan is a reality here, officials said.

That term sheet will not only include the city's contribution to the $387 million project, but would also involve contributions from the NBA and/or the Kings, private arena operator AEG and the facility's development team.

A report by the City Auditor indicates many city employees have witnessed fraud, waste and abuse by co-workers - leading officials to recommend the creation of a whistleblower hotline at City Hall.

In a report issued this week, City Auditor Jorge Oseguera's office wrote that establishing a whistleblower hotline could save the city millions of dollars each year. The Association of Certified Fraud Examiners (ACFE) estimates that "a typical organization is estimated to lose 5 percent of its annual revenues to fraud," according to the auditor's report.

If that's the case, Sacramento could be losing $30 million a year to fraud, the auditor says. If the auditor's office handled the hotline with current staffing it would cost about $9,000 a year. Hiring a new employee to handle the hotline - an option that would allow the office to handle more calls - would be an estimated $200,000 a year.

For quite some time, opponents of Mayor Kevin Johnson have sought a candidate to challenge the mayor in the June primary. While no one has formally stepped up, talks appear to be getting more serious behind the scenes.

Those talks are being charged by a poll released nearly two weeks ago - found here MayoralPoll1-31-12.pdf - that showed fewer than half of those surveyed would vote to re-elect the mayor. More than half wanted to elect an unnamed "someone else."

The poll was clearly put together - and then distributed to the media - in an attempt to convince a candidate to run against Johnson. It was funded by the Sacramento Building Trades Union.

To say Joe and Gavin Maloof appeared upbeat before tonight's Kings game would be an understatement. We just don't know yet if they're upbeat about the arena situation.

The Maloof brothers were happy to field a few questions from me on the atmosphere leading up to tonight's nationally-televised game with Oklahoma City. But a team spokesman said they wouldn't respond to questions about the arena situation because there isn't a plan to talk about yet.

Joe and Gavin watched as their team finished its pre-game warm-ups. They sat in their luxury box, with Joe eating a steak and Gavin sipping a soda. Their mother, Colleen, sat by their side.

Three of the 13 private firms that had expressed interest in leasing city-owned parking to help fund a new arena have been eliminated from the process.

Teams needed to "demonstrate strong financial resources and have a parking operator that has substantial experience managing both on and off-street parking assets," according to a city staff report released today.

Among the teams eliminated were local firm Revitalizing Sacramento LLC, made up of local parking operator Aaron Zeff and developer Larry Kelley. Bainbridge ZKS and CMB Export LLC were also crossed off the list.

A lot of attention has been paid the past few days to Seattle's interest in the Kings. But there's news out of Anaheim this morning that shows Orange County still wants the Kings, too.

Lance Pugmire of The Los Angeles Times reports Anaheim officials and owners of that city's Honda Center arena broke ground Wednesday on a $20 million upgrade of the facility.

Honda Center owner Henry Samueli said he is "just waiting and standing on the sidelines" as Sacramento's arena work unfolds. Last year, in an attempt to lure the Kings to Anaheim, Samueli offered millions in upgrades to the arena, plus financial assistance to the Maloof family, owners of the Kings.

Labor unions - those influential groups that have powered many a City Council campaign - aren't thrilled with the council's decision Tuesday night to place a charter review commission on the November ballot.

Hours after the council voted 7-2 to move forward with the ballot measure Tuesday, the president of the city police union told City Manager John Shirey he was suspending negotiations between his union and city officials. Other unions are worried about allowing an outside commission to dive into - and potentially rewrite - the way the city is governed.

The police union's argument is about dollars and cents. Mark Tyndale, president of the Sacramento Police Officers Association, said he was concerned about the cost of a commission and that he refuses "to consider further concessions that will only be used to fund the commission."

Mayor Kevin Johnson's latest strong mayor plan goes head to head with a proposal to create an elected charter review commission at tonight's City Council meeting. And the mayor is making it pretty clear where he stands.

Johnson told reporters this morning he thinks "the charter commission idea needs to be dumped." Councilman Kevin McCarty has proposed placing the creation of a charter commission on the November ballot.

"I don't think it's in anybody's best interest and I feel like it's a reaction to the initiative that I brought forward," the mayor said.

Mayor Kevin Johnson expects negotiations on the funding plan for a new downtown Kings arena to intensify, now that 13 firms have expressed interest in leasing the city's parking operations.

The mayor told reporters this morning that the city is "on track and in striking distance" of developing a financing plan for the $387 million arena. City officials are hoping to raise as much as $200 million for the project from the leasing of downtown parking garages, spaces and enforcement.

With more than a dozen firms expressing interest in those parking assets, the mayor said "it's going to be constant negotiations with (arena operator) AEG, the Kings and the NBA and all the interested parties" as the sides work on a funding plan before a March 1 deadline. If a plan does not materialize before then, the NBA has told the Maloofs - the family that owns the Kings - that they can explore moving the franchise.

Following a federal appeals court ruling today that California's same-sex marriage ban is unconstitutional, Mayor Kevin Johnson said he would look at a petition signed by dozens of statewide politicians that promotes marriage equality.

While the mayor said he "certainly respects" the court's decision today, he repeated his personal belief that "marriage is between a man and a woman." But, he added, "I strongly oppose discrimination when it comes to our constitution."

Johnson has been urged by the Stonewall Democrats club to join the Mayors for the Freedom to Marry, "a bipartisan coalition of over 100 United States mayors dedicated to promoting marriage equality in their communities, state, and our nation."

An open records advocacy group is suing the city after being denied emails and other communications regarding last summer's volatile City Council redistricting process.

The California First Amendment Coalition (CFAC) filed a suit Friday in Sacramento Superior Court demanding emails between City Council members related to redistricting between April and August of last year.

Peter Scheer, CFAC's executive director, said "we're hoping to open the door on some of the crucial exchanges" between council members as the redistricting process unfolded. He said the city denied a Public Records Act request for the emails, citing a "deliberative process exemption" that allows the withholding of records revealing advice given to elected officials from staff aids and others.

The City Council is scheduled Tuesday to consider Councilwoman Sandy Sheedy's request to place a measure on the June ballot asking voters if they want to use public parking assets to help finance a new sports arena.

Sheedy pulled the item from the agenda last month when Councilman Rob Fong was unable to attend that council meeting. While Fong is not expected to support Sheedy's request, he has played an integral role in the city's ongoing arena fight and Sheedy wanted her colleague present for the ballot measure debate.

There still appears to be limited support on the council for a June vote on the arena. Besides Sheedy, only Councilman Darrell Fong has expressed support for the vote.

The news out of Seattle this weekend that city officials are discussing a plan for a new arena in that city - and that they're monitoring the situation here - is so far having no impact on Sacramento's own arena work.

"We are focused on one thing and one thing only: what is in the best interest of the people of Sacramento," Mayor Kevin Johnson told me in an email. "And to that end we have put in place a plan that we believe is good for the League (the NBA), good for the team (the Kings) and, most importantly, good for the City when it comes to jobs and protecting the taxpayers."

At the very least, news that Seattle has a new arena plan in the works tells us one thing: there's potentially a new suitor for the Kings, should Sacramento's own arena deal fail.

Sacramento's only official ethnic neighborhood will host a parade Saturday, hoping to market itself to the rest of the city.

The Little Saigon Street Festival Parade is scheduled to begin at 9 a.m. and run along Stockton Boulevard from Fruitridge Road to Florin Road. The parade will include floats, music and drum lines.

Little Saigon is a flourishing stretch of Stockton Boulevard made up of dozens of Vietnamese, Hmong and Chinese businesses. The City Council voted in 2010 to name the area Little Saigon.

The city's Utilities Rates Advisory Commission has recommended raising water and sewer rates for the average bill by a combined total of $19 a month over the next three years.

By a 5-2 vote on Thursday, the commission approved a recommendation by city utilities officials to raise water rates by 10 percent each of the next three years and sewer rates by 16 percent, 15 percent and 14 percent over the next three years. The City Council has final approval over the rates and is scheduled to debate the matter on Feb. 28.

The new rates would go into effect July 1.

The 13 companies that responded to a request for firms interested in leasing city-owned parking operations includes several large companies specializing in parking assets, two partnerships with local ties and the largest single-profession pension plan in Canada.

City staff is examining the qualifications of each firm and is scheduled to go to the City Council on Feb. 14 to narrow down the list to the most qualified companies. After that, city staffers will ask the council to approve a formal request for proposals (RFP) that would lead to bids on the city's parking assets.

City officials are hoping to raise as much as $200 million from the leasing of downtown parking spaces, garages and enforcement. Officials have proposed using that upfront cash to help finance a new $387 million Kings arena in the downtown railyard.

Tonight the city's Utilities Rate Advisory Commission will once again debate whether to recommend raising the city's water and sewer rates to fund system improvements.The meeting is scheduled for 5:30 p.m. in the City Council Chambers, 915 I St.

After a four-hour meeting last week, the commission balked at staff recommendations to raise rates by a combined 19 percent over the next three years. Whatever recommendation the commission settles on tonight will eventually be passed on to the City Council for final approval.

City utilities officials said the increases are necessary to issue bonds to pay for more than $300 million in upgrades, including a $152 million rehab of an 80-year-old water-treatment plant north of downtown and $57 million for water meter installation.

A proposed June ballot measure that would have prohibited the city of Sacramento from requiring labor organization agreements on publicly-funded construction projects has failed to gather enough signatures.

Sacramento County elections officials ruled today that 62 percent of the signatures it inspected from proponents of the Fair and Open Competition Sacramento measure were valid. Another 19 percent of signatures were from people not registered to vote and 7.5 percent were from voters registered outside of the city.

Supporters of the measure handed in 46,692 signatures to the City Clerk - far more than the 32,207 required to place the measure on the ballot. But the group fell well short of providing enough valid signatures, officials ruled.

A man by the name of Leo threw his wallet at the mayor during the City Council meeting. The mayor didn't flinch, the wallet struck the dais in front of Johnson and the man was escorted out the City Council Chambers - without further incident - by three police officers.

Leo is a regular at council meetings, showing up dozens of times over the past few years. He was apparently angry at the mayor and City Manager John Shirey for not doing enough to help him regain his identity, which he said was stolen.

The incident also included Leo criticizing the oil companies of killing of fish in the ocean, which "also killed off the fishing industry." At one point, members of Occupy Sacramento applauded for Leo.

It was a huge fundraising year for City Hall candidates.

The 15 candidates involved in the City Council and mayoral election in June raised just over $1 million in 2011, campaign finance records released today show. Most of that was the $554,923 in cash brought in by Mayor Kevin Johnson for his re-election campaign.

Candidates for City Council brought in some big numbers, too.

Union bosses, local Democratic operatives and neighborhood activists have all spent the last three years taking shots at Mayor Kevin Johnson. But not until Tuesday night had someone actually thrown something at the mayor.

A man by the name of Leo threw his wallet at the mayor during the City Council meeting. The mayor didn't flinch, the wallet struck the dais in front of Johnson and the man was escorted out of the City Council Chambers - without further incident - by three police officers.

Leo is a regular at council meetings, showing up dozens of times over the past few years. He was apparently angry at the mayor and City Manager John Shirey for not doing enough to help him find his missing identification.