‘We Don’t Know What We’re Doing’
by Mark Scaramella, December 21, 2011
We can sell off five “surplus” properties and make our broke County some money. That was the thinking at the December 6 meeting of the Supervisors. A couple of the parcels appear to be tax defaults, one looks like an abandoned County yard, another an abandoned County equipment storage area, another looks like a small amphitheater and parking lot at the north end of Lake Mendocino.
In October, the leadership had authorized the five parcels to be put out to bid. The County’s General Services Agency duly issued a public notice in accordance with government code — notices must be placed in “three public places in the county, not less than 15 days before the date of the meeting, and by publishing the notice in the county” … “once a week for three successive weeks. Three publications in a newspaper regularly published once a week or oftener (sic)…”
This official County newspaper received no such notice, but then we seldom do. Not to whine about it, but we seldom do because over the hill and far away in The Valley of the Diabetics we aren't much esteemed by County government. The little ones, taking even smaller revenge, which they wouldn't dare do with their own money, have denied us our share of legal advertising for 30 years. We sued over it once. It took the Ukiah jury 45 minutes to find in our favor but, in an appellate decision that seemed to be referring to another case and was so generally stupid as to be incoherent, we lost. And, as inevitably occurs when a private party of ordinary means takes on a government agency that gets free lawyers, we couldn't afford to take it to the even grander courts. The Occupy movement really ought to consider an occupation of the courts where the One Percent gets its real muscle.
Anyway, if the idea is to put public property out to bid, doing it with obscure legal notices in outside-owned, scarcely-read chain newspapers is not an effective way to attract the hoped-for high bidder.
Back to surplus sales, each of these parcels was assigned a “minimum bid” and, if all five were sold, the County would clear at least an estimated $625,000. For this kind of money, you’d think the County would be doing its best to get some badly needed revenue.
“In addition,” the government code continues, “the board may purchase advertising space and may advertise the proposed sale or lease of the property in such newspapers, magazines, and other periodicals as, in their judgment, will best publicize the sale or lease to those persons most likely to bid for, purchase or lease the property.” (This newspaper happens to be the only publication widely read outside Mendocino County and, along with the New York Times-owned Santa Rosa Press Democrat, is the only County publication read in every area of Mendocino County. And, along with the Gualala-based ICO, is the only County publication in non-corporate hands where public advertising is much less expensive than it is in the corporate-owned papers.)
When the parcel sale discussion came up at 10am, several people who wanted to preserve their Williamson Act ag preserve government gifts were present to resist what they saw as the possible loss of their hegemony. But the Board had botched the notice of that agenda item. Was it on for 10am or 3pm? After several more minutes of confused discussion the Board decided to postpone the Williamson Act discussion to another day while they discussed the sale of the County’s surplus parcels. “I apologize to those in the audience who were here for the 10 o’clock meeting,” said Board Chair Kendall Smith, “because I don’t know who prepared this agenda, but it clearly isn’t working with respect to time.”
Janelle Rau of the County’s General Services Administration was on hand with her assistant, Heather Correll. Ms. Rau kicked off the surplus property discussion.
Rau: “You have before you an item regarding the surplus of real property for the board. There were five various properties that staff was given direction to pursue the noticing and sale of said properties. I will be really brief. You have the information in front of you. We have been pursuing this since June of this year. Staff proceeded with the public noticing. We transmitted a 60-day notice to local agencies as well as to affordable housing agencies. We received no letters of intent, nor any offers at that point. We proceeded with the mandated public noticing pursuant to the government code, published in the local media, transmitted to adjacent property owners, etc. It is my understanding we received no sealed bids at this time. I would recommend that we entertain oral bids for anyone that’s present here or any of the various properties. If they were to come forward and make an offer they should just identify the property they are making it on and staff here can document that and then what we're recommending is that it will come back on the 13th with any available options. If we don't receive a bid on a particular property we will work with Counsel on re-noticing and what our steps are from that point.”
No bids were received, but nobody asked about what kind of advertising had been done.
Supervisor Pinches wondered, “So when you open this up for oral bids here at this minute, are no bid deposits required?”
The notice said a 10% bid deposit was required.
Rau: “They will have to have their bid deposit just as though they were giving a written bid.”
Pinches: “Oh, well you didn't say that first.”
Rau repeated: “They will have to have 10% of their bid at the time.”
Pinches: “Well, maybe not everybody here has received that, there might be people who showed up here today to make an oral bid who didn't have any of that information.”
McCowen: “They can run home and get their checkbooks.”
Rau: “It’s very clear in the legal noticing and in the noticing that's been posted, so the options available as far as the written bidding and the oral bidding were described in all of our legal requirements.”
Pinches: “So what is that deposit?”
Rau: “It’s 10% of whatever their offer is.”
Pinches: “Okay, just so everybody's aware of that.”
Smith: “Okay, we will go to [County] Counsel to go over this verbal process that Ms. Rau is recommending now.”
County Counsel Jeanine Nadel: “I think she's explained it. I think what you need to do is go parcel by parcel.”
Rau: “We will just go ahead and start then. Do you want me to just go ahead and — “
Rau: “—accept bids now?”
Smith: “Sure. That would be fine.”
Rau: “The Orr Springs property which is APN 156-040-0400, our minimum asking price was $15,000.”
This property appears to be a 1-acre piece of undeveloped rangeland about a mile west of Mendocino College. At 15 thou it's a steal.
Smith: “So any members of the public wishing to bid on this property, you'll have to come forward when the parcel is delineated by staff. Please go to the microphone. State your name.”
Tom Madden: “Tom Madden.”
(Tom Madden is the Comptche tree trimmer who ran for supervisor against David Colfax a few years ago.)
Madden: “Yes. I’m interested in that parcel.”
Smith: “The Orr Springs property?”
Madden: “Yes. You need a parcel number?”
Smith: “Yes. Will you restate it and Ms. Rau can confirm.
Madden: “That's 156-040-04, better known as 3001 Orr Springs Road.”
Smith: “Okay. Did you have a verbal bid at this time?”
Madden: “A verbal bid is—“
Madden: “—$15,000 plus the 5% that needs to be on there because this is an oral bid, so that would be $15,750.”
(No one had mentioned anything about an additional 5% for oral bids in any of the requirements.)
Smith: “Okay, $15,750. So Ms. Rau, you are keeping track of all this?”
Rau: “We are. Yes.”
Smith: “Okay. Thank you very much.”
McCowen to Smith: “Wouldn’t you see if there was anyone else interested in bidding on that property?”
Smith: “So, did everyone hear that parcel number? Is anyone else interested in that particular parcel? Ms. Rau, would you repeat the number, the parcel number please one more time?”
Rau: “156-040-0400. And that’s Orr Springs Road.”
Smith: “3001 Orr Springs Road. Anyone else interested in this property?”
A hand went up from the audience.
Smith: “Okay, please come forward. State your name.
Dave Flum: “Dave Flum, $16,000.”
Mr. Flum has a residential address in Healdsburg and appears to own several properties in Mendocino County.
Supervisor Dan Hamburg laughed, and then put his head in his hands.
McCowen: “Maybe they both should come to the mic.”
Flum: “If you guys want to hold an auction, let’s go!”
Pinches: “That's what this is.”
Flum turned to Madden: “Are you out?”
Before Madden could answer, Ms. Nadel said: “We will take the bids and then we will come back to the board next week I think with what the recommendation is.”
McCowen: “Well, but is this appropriate that one person can make a bid and then another person can increase their bid?”
Nadel: “They each get to make a bid period. And they've done that.”
Flum: “Okay! So were done.”
Everyone laughed. Mr. Flum was the high bidder!
“Wait a minute!” shouted Supervisor Pinches, putting his hand up in a halt motion.
Smith: “Wait a minute!”
Chair Kendall Smith, rounding out the farcical procedure, covered her ears with her hands.
McCowen: “I don't think everyone understood the ground rules.”
Smith: “Okay. Let’s go to Counsel. Because this is not the process that was described to me before the meeting. The process that was described to me before the meeting, since I'm the Chair of the meeting, was that we were expecting, and we were opening written bids. And if there weren’t any written bids we were going to do what Ms. Rau just said; we would re-reconvene, we would re-study the issue and re-notice it and return.”
Smith: “So that's how it was described to me. But anyway. Counsel, are we still on track here?”
Smith: “OK. We’re fine. Any other bids on this particular property?”
No one said anything.
Smith: “Okay then, we’re moving on to the next property.”
McCowen: “Madam chair.”
Smith: “Yes, Supervisor McCowen.”
McCowen: “I don't see anything here where it says that an individual can't make more than one bid.”
Smith: “Well, I don't know.”
McCowen: “Well, I don't see anything here that says that that can't be done and I think it's also clear that perhaps not everyone understood what the process is.”
Pinches: “When you go into an oral bidding process that means that's a competitive auction type process. You know, if we don't know what the hell we're doing, we better continue this until we know what we're doing.”
Pinches: “It's real clear we don't know what we’re doing.”
McCowen: “I don't disagree.”
Smith: “So! So Supervisor, we didn't have anyone come forward who said they wanted to make an additional bid.”
McCowen: “Well, yes we did. I believe that Mr. Madden has indicated an interest. You are still interested, right?”
Madden: “Oh yeah!”
McCowen: “Oh yeah!”
Smith: “Well, he didn't come forward.”
Pinches: “Madam chair, let’s continue this process till we get the ground rules figured out.”
McCowen: “I move we continue this item.”
Pinches: “I second.”
There was a lot of back and forth about how and when to continue the bidding process. After all, if Mendocino County was going to sell acres of attractive land for $16,000 per one or the other of the two bidders present would emerge from the Supe's chambers with a large windfall.
Rau tried to get things back on task.
“Pursuant to the code you do have 10 days from the date of the opening by which you have to make a determination. We could go through and do a renoticing if that's the pleasure of the board as well, and redefine and have a more thorough description of how the process should work. We will defer to the Board and allow you to direct staff.”
Smith: “I’m going to go to the CEO for comment.”
Angelo: “Madam chair, I would recommend at this point that you allow GSA to go back out on these properties. We were hoping for unanticipated revenue with selling off the properties. There were no written bids. It was my understanding that we would do oral bids. I think there's a question as to the difference between taking oral bids today and auctioning off property. This was not scheduled to be an auction, so it would be my recommendation that GSA go back out for bid and that we schedule a time before the Board where we could take oral bids and determine if its oral bids or an auction or what we're doing and I would recommend mid-January at the earliest.”
Smith, as always devoted to muddle, said, “That's — it's going to take more time to do that than next week.”
Pinches: “I used to be an auctioneer. It's a very simple process. Now that you have no oral bids you state the minimum price. Somebody comes in and they either bid the minimum price and then you auction and it goes up from that. It's a very simple process. It's done every day throughout the world.”
Smith: “Yes, we understand that.”
Pinches: “There are many counties —”
Smith, ignoring and interrupting Pinches: “I'm going to call the question. Supervisor McCowen.”
McCowen: “Further, we have already begun this process and we are in the middle of it and I would be concerned that potentially we are exposing ourselves to legal liability if we just scuttle the process right now rather than to decide how we conclude it properly and fairly to everybody concerned and I think we stay with the present process. You know, we get it clarified exactly what are the parameters of the oral bid process? I tend to agree with Supervisor Pinches that it should be the equivalent of an auction. After all the County’s interest is to get the best possible price so if we have two willing participants, rather than have them play a game of who goes first and then the process gets short-circuited, I think we need to find out if it's legal to have this in effect be an auction and I think we can do that by next week. We can pick up right where we are now. And there’s the 10 day noticing issue, or so— there’s the 10 day window, so I would amend my motion that this would come back to the Board at our next meeting next week if that's acceptable to the maker of the second.”
Nobody seemed to notice that there were no bidders for the higher priced properties. Why didn’t they get any bids or bidders on those properties? No one seemed to care, even though more than $600,000 was at stake.
It went on and on until Pinches, turning to the audience: “Well, we really botched this one, didn't we?”
Someone in the audience exclaimed, “Oh, man!”
McCowen: “Well, I've often wondered who sets these agendas. When you look at the timed items you’ve got to say how in the world is this going to work? And we just found out; it doesn't.”
Smith, sarcastically: “Well, thank you supervisor for your comments.”
Pinches: “We complain ’cause were broke and people come in here to give us money and we don't know how to accept it.”
Applause and cheers from the audience.
The confusion fumbled on until the Healdsburg bidder, Mr. Flum threw up his hands, stood up, and walked out.
Someone shouted, “This is ridiculous.”
Another could be heard to grumble, “Incompetent turds.”
* * *
When the Board revisited the property sales the following Tuesday, December 13, General Services Director Kristin McMenomey quickly took charge and the oral bidding process finally decided upon the previous week went smoothly. Mr. Flum and Mr. Madden raised bids back and forth until Madden finally won at $32,500, more than twice what the Supes almost settled for the week prior. When a $175,000 minimum bid Hopland parcel came up, Mr. Flum said he was interested, but not for $175,000. He left the boardroom.
Ms. McMenomey then offered the other four parcels to a reporter and two county staffers, the only remaining people in the audience. Of course, no one bid.
In answer to a question from Supervisor Pinches, Ms. McMenomey said they’d notified all County real estate offices about the sales and, “we also published in every single publication in the County.”
Not true. This newspaper — a privately owned, legally adjudicated weekly County newspaper of general circulation in continuous publication since 1954 with subscribers and retail sales outlets all over the County was, as always, excluded.
Ms. McMenomey said she plans to repeat the bid process for the remaining four parcels next year.