Complaint Against Mayor Josh Fryday and Council Member Denise Athas for being derelict in their Duties of “Fiscal Responsibility”

This is a formal complaint against Mayor Fryday and Council MemberDenise Athas for their actions at the city council meeting on October 9, 2018regarding agenda General Business item J.14.

http://cms6ftp.visioninternet.com/novato/agendas/cc100918.html

To begin the agenda discussion, Council Member Athas waved a button supporting the Novato Theater to the crowd.  This act removed all belief Council Member Athas was going to fairly evaluate the information to assess the risk to the city of Novato that became clearly evident.

A presentation by Keith Greggor, of the Theater Group, didn’t provide a presentation to the Novato City Council that would provide the necessary information to properly assess the risk to the city of Novato to co-sign for the proposed $3 million Novato Theater loan.  In fact, Bank of Marin, a bank in the business of providing commercial loans, could not provide a $3 million dollar loan to the Novato Theater Group without the City of Novato co-Signing the loan.  

Immediately after public comment on this agenda item, Council Member Denise Athas pushed forward a motion to consider assistance financing for the remaining improvements for the Novato Theater. The motion per the city clerk meeting was as follows:

“Council Action: Upon motion by Councilmember Athas and seconded by Mayor Fryday to consider the request by the Novato Theater for assistance relating to financing for the remaining improvements and possible direction regarding financing assistance options including but not limited to, grant, loan, financial guarantee, or other financing assistance options by the end of this year.”

Mayor Josh Fryday immediately seconded.  Fortunately, City Council Member Pat Eklund proposed a counter motion to allow proper consideration of this issue.

This complaint states Mayor Josh Fryday and City Council Member Denise Athas agreed to approve to move forward on a broad range of financing options for the Novato Theater with specific knowledge the Novato Theater Group had not been able to get a loan from a legally chartered bank based on their financial information. This action by Fryday and Athas to consider funding a private project that can’t obtain a loan from a legally chartered bank is a dereliction of “fiscal responsibilities” to the City of Novato.  Banks don’t provide loans when in their judgement the risk of not being paid back are too high. This evaluation includes sale of the property in case of default.

The City of Novato budget is far from being in a position to absorb a $3 million dollar loan. (See attached worksheet showing Novato’s declining reserves.)

Below is a link to the “City Council and Redevelopment Agency Manual”.  Fiscal responsibility by city council members is stated as policy and procedure in both the city mission statement as well as city council core values.

https://novato.org/home/showdocument?id=13912

Josh Fryday and Denise Athas were clearly in violation of the mission statement and core values by their failure to act “in a fiscally responsible manner”.

Submitted by:     Al Dugan and Bob Ratto

Cc:    1.Bob Ratto memo to the city council before the city council meeting

          2. Novato Reserve Review

Reserves

Ratto-Theater-memo

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2 Replies to “Complaint Against Mayor Josh Fryday and Council Member Denise Athas for being derelict in their Duties of “Fiscal Responsibility”

  1. Please consider showing up on Jan 15th for the informational meeting that Pam and Pat ensures would happen before a vote. Please be looking for a complete packet of informational material including all 990’s showing who donated and for what amounts. The 990s posted show 70% of donations were from gov’t entities …. ie the city of Novato and the County of Marin. We should also receive balance sheets. Cost Projections, A programming plan to support intake projections and past financial statements showing who got paid for what services. Even the CC members have not got this information. Odd since it has been over two months since the meeting that Fryday and Athas we’re prepared to move ahead with plans put together by the theater and staff “BEFORE” the end of the year. They didn’t have all the information then either….

    We should also be looking for reasonable calculations on the plan.

    From analysts done by Bob Ratto, who has 33 years experience in Banking – “ …if you just take take interest at a rational rate (they were using 4% in a projection, which is laughable), and assume that say 2MM is outstanding, at 8% you need to generate $160k per year just for interest..about $440 per day, every day..and that never touches the principal.”

  2. Will fairness be applied ?

    If it is then surely Fryday should be stripped of being mayor as under near identical circumstances Pam Drew was deselected as mayor.

    Or are there double standards in Novato?

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