Clayton Terminates Agreement With Clayton Business and Community Association

On Tuesday, the Clayton City Council moved to terminate its agreement with the Clayton Business and Community Association in a 3-1 vote.

The move came after a nearly 2-hour discussion with many members of the community speaking out against the proposed action by Mayor Jeff Wan. The termination will commence on July 1, 2023.

The CBCA puts on events such as the Clayton Art and Wine Festival, Clayton BBQ and Brews Festival, Clayton Oktoberfest, and the tree lighting event.

According to the agenda, Mayor Jeff Wan  asked that this item be placed on the City Council agenda for the purpose of discussing the merits of continuing this agreement. The item does not call for a renegotiation of the agreement, simply a termination.

Per the agenda, areas for discussion include, but are not limited to, whether there is full cost recovery for services and facilities provided by the City, whether taxpayers funds are being used to subsidize the events associated with this agreement and this organization, and whether the treatment of this group is similar to other groups or organizations.

While the agenda did not call for a renegotiation, during the meeting, Wan changed his tune and called for a renegotiation with the CBCA.

Dozens of residents spoke out against the termination of the agreement and urged the council to renegotiate. Residents also expressed concerns about future events while noting the staff report offered no details for justification for termination. They also shared how the staff report failed to show any “true costs” for services provided versus what is being paid. No listings of violation of terms.

Terri Denslow, former treasure of CBCA, highlighted they attempted to get a meeting in December of 2022 to talk about the contract and make adjustments.

“We all agreed there was nothing major in this contract that needed to be brought forward for renegotiation. The fact this is coming up the way that it is now, is a surprise to the CBCA, a surprise to the council that it just got pushed on the agenda. It feels not right, it feels like once again Jeff (Wan) you are targeting the CBCA,” said Denslow. “I want the public to know during my time as treasurer, myself and others received 6 anonymous letters to our homes attacking us and our organization. We know who is behind it Jeff… we are sick and tired of what the hell you have against our organization but does nothing but give back to the community. We give $150k annually back to the community.”

Rebecca Nolan stated this appeared “sneaky, dirty, underhanded and childish” and she highlighted how the events allow then to donate funds to scholarships, donations to schools, maintain bocce courts and donate to the library, theater and Christmas decorations.

After public comments, Mayor Wan highlighted he brought the item forward as an overall effort to enhance fiscal sustainability and reduce expenses while increasing efficiencies saying raising taxes was always a last resort.

“Right now, our effort is focused on cost reduction and non-tax revenue enhancement,” said Wan who highlighted they were also looking at ending services contracts that do not add sufficient benefits while looking to close city hall to allow staff time to focus.  “Later this year, we will be examining the cities master fee schedule to ensure the amounts charged reflect the cost that are incurred for various services.”

Wan explained when it came to fees, the agreement with the CBCA stood out saying cities charge to cover costs and fees to use facilities—they are working with a vendor to help update their fee schedule to recoup costs for services.

“With the agreement executed in 2008, the CBCA is exempted from paying the fees that makes the city whole for its cost. We are not talking about anything other than the cost the city incurs,” stated Wan. “I maintain and reiterate that the CBCA is a fantastic organization and adds a tremendous value to the residents of Clayton.”

He noted while the work is “great”, it shouldn’t exempt a group from paying their fair share and the fees would not be high to be prohibitively expensive—cost to rent the grove, temporary use permits, cost to close the streets.

“Its been suggested that because this organization donates to various things which is fantastic, that they should enjoy the privilege of a fee waiver. Unfortunately, this line of thinking it does sound like a quid-pro-quo,” stated Wan. “Exchanging fee waivers for donations. This is something that we should be avoiding as a city.”

Per event, its about $7,500—approximately $25,000 a year.

“It’s not an attack to say an organization should pay its fair share,” stated Wan. He continued saying they are talking about nothing more than the cost incurred by the city.

“There is a running theme of why the termination and not the renegotiation and I think you do not negotiate at a council meeting. Its not a back and forth, we are not even allowed to do that. So, what I would suggest if there is a desire to have an agreement in place, which I think is a great idea because of the relationship, when I brought this forward, I said we need to terminate this agreement and if the organization is amicable in creating a new agreement to streamline the work, while ensuring the city recoups its cost, that would be a great idea,” said Wen. “That is the basis.”

Councilmember Peter Cloven stated he believed if the mayor had concerns, a line item list should have been placed in the agenda.

“I would like to see a line item. You say $25k waived including rent for the Grove, the Grove is not used for most of those events, its open for anybody in the public to use,” stated Cloven. “So the fact you want to add that fee on top of that seems a little not appropriate. Its excessive. If you are going to put a number out there saying they are not paying their fees, as I said at the beginning, you need to put down a very clear idea of the fees not being paid so everybody in this room can see it.”

He also stated the mayor is not seeing the benefit of CBCA from a financial standpoint—what should they pay versus what they are getting in return—because they don’t have a public relations firm, a social media/marketing person and the CBCA acts as the city’s marketing department who do it for free.

“How do you put a dollar amount on that,” stated Cloven. “If you are going to put together a financial analysis of what they are not paying, also put together an analysis of what they are paying so we can look at the left and right and have the data to make a decision.”

He continued stating they should not make a decision until they have a master conversation on the city finances which they will have in the coming months related to the budget.

“You stated there is an unsustainable budget, we need to evaluate revenue generation as well as cost cutting,” stated Cloven and that they were arbitrarily starting tonight with the CBCA. “Its not good energy for our community.”

Meanwhile, Vice Mayor Jim Diaz stated he hoped this topic did not turn into a popularity contest.

“It sounds like the mayor is open to a new agreement with the CBCA and put in place some mechanism to accomplish that,” stated Diaz. “Let me just say this, if you look over the past two years, we were given a projection by a former city manager that we were going to go into the red on July of 2023, which is quickly approaching. We tried seeing if the community would support a $400 per parcel tax. That did not fly. What did come through, the community loves Clayton. This is really the first step trying to address that shortfall that is looming.”

Diaz stated three of the four members on the council tonight are members of the CBCA and they were not being targeted.

“Let me make that clear, we are not targeting the CBCA,” stated Diaz. “What we are looking at is trying to balance the numbers that provide the revenue that keep the entire city in the black. I see that clearly, I don’t know how it can be viewed any other way. We are not targeting the CBCA.”

Diaz called for a new framework to say solvent because they have a responsibility beyond the CBCA while hoping for a path forward after tonight.

Councilmember Kim Trupiano admitted to being surprised at the word “termination” but hoped it was more about renegotiation calling herself a proud member of the CBCA.

“But there should never be any special favors for one organization over another and some of the invoicing I have seen… there was not sufficient compensation for Oktoberfest. There was a blank spot for maintenance, so I don’t think we are being adequately compensated for our city services,” explained Trupiano who said the agreement does appear to favor one organization over others.

Trupiano said one must always look at current contracts and find where there is room for improvement.

“Termination bothered me as well, but its time to sit at the table and negotiate something that is fair for all parties, including the citizens of the community,” said Trupiano. “Our citizens should never be subsidizing anything. We should exhaust all possibilities before we ask the citizens to pay more.”

Wan suggested the termination be July 1 so it does not impact the events already occurring and aligns with fiscal year which allows them time to get information on master fee schedule—then could incorporate into next years budget while allowing more discussion with CBCA.

Cloven shot back on the hole in the invoice stating the issue was the city not giving them a cost noting when given an invoice they have paid and timely.

“It’s not a matter of them not paying their invoices. It’s a matter of city staff being overworked and not being able to get the invoices to them to pay,” stated Cloven. “Yes, there is wear and tear, but until you put a spreadsheet in front of me and what the fees are you are asking and the wear and tear you are asking to recoup, so I can see the value you are asking for. I am not in a position where I desire to terminate anything. I want to see the data, the plus and negative so I can make an informed decision. This is all about emotion. I am sorry, I want the data.”

Cloven also stated with the mayor suggesting a July 1 termination date, it gave them multiple meetings to negotiate. He urged the council to table this item so they can get “better” information.

He called for a motion stating they should table the item. It died after not gaining a second.

Trupiano then asked about CBCA not paying.

Staff told the council the CBCA did pay what they were invoiced and the blank spot on Oktoberfest was due to an error on how staff time was billed. They explained there was no maintenance charge because there was no backup to justify the charge.

Diaz stated the termination word is not the mayors word, it’s the legal term the council received from the legal side of the city.

“If we can accomplish setting up a process to meet with the leadership and negotiate a new framework by July 1, that seems like we can accomplish that and get the numbers being tossed around, admittingly we don’t have, but what we do have, if we don’t take action we could go into deficit on July 1,” stated Diaz.  “July 1 is the target date to really buckle down.”

Diaz stated again they were not targeting the CBCA and if anyone believes that, he wanted to speak with them directly after the meeting.

“I am probably the most accessible person that walks around this town,” stated Diaz.

Wan made a motion to proceed with termination of the agreement and called for formation of an ad-hoc committee to renegotiation more equitable terms—Diaz and Wan would be on this committee.

The council voted 3-1 to move forward with termination with Cloven dissenting. Councilwoman Holly Tillman was absent

After the vote, members of the audience called it “disgraceful” and called for a “recall”.

Watch the meeting:  click here

According to the Master Agreement, either the city of CBCA can terminate at any time given a 60-day notice.

General Event Terms:

• Temporary Use Permit Fee – $75 (waived)
• City Street Use Fee – $100 (waived)
• Noise Permit Fee – $85 (waived)
• Clean Up Deposit – $500 (waived)
• The agreement also stated the CBCA will give the city a $5,000 rolling deposit towards all damage and cleanup for all events. The CBCA also submits one permit application to include all CBCA events for the year. There is also a City Alcohol Permit fee ($50) paid by CBCA 30-days prior to events. The CBCA also covers 50% of all city direct support cost (estimated at $6,000)
• The City waives all fees per council resolution (No 47-2007) for The Grove usage to include (park usage rental fee ($1,200/day), Special Park Use Permit Fee ($250), Park Sound System Damage Deposit ($1,000/day). These fees were waived for the Art & Wine, Oktoberfest & Tree Lighting).
• They also pay $21 per hour for a city sound technician.

Upcoming Events include:

• April 29 & 30 – Clayton Art & Wine Festival
• Aug. 26-27 – Clayton BBQ & Brews Festival
• Sept. 30-Oct 1 – Clayton Oktoberfest
• No date yet – Clayton Holiday Tree Lighting & Dessert with Mrs. Claus