Rojas renegotiates loan: City manager having trouble paying city

Sounds as though he's as skilled at managing his own finances as he is at dealing with the city's finances. What a surprise.

Bosch, now Rojas - where on earth do we come up with these people?

This is ridiculous -can't we dock his salary or something? Maybe Mr. Rojos should downsize his financial OBLIGATIONS, sell the big house, pay back the city and move to a more modest location.

Yet another reason to get another city manager. If we'd done that earlier the city would have avoid paying $1mm to consultants for a downtown no one likes.

I just talked with Mr. Rojas about this. When the city hired him, he received a $1.27 million home loan. The contract stipulated that he would make a 10 percent down payment on the Menlo Park home when he sold his home in Riverside. He hasn't sold the Riverside home yet because of the housing bust (which hit Riverside especially hard), and knows that he won't be able to sell it any time soon.

So, he is in closed-session talks with the City Council to work out a way for him to pay the down payment "in a way that doesn't kill me with taxes," he said.

He is not in violation of the terms of the loan. He said the claim in the Daily Post article that he "doesn't have the money" to pay it back is false. He noted that the loan is secured both by the Riverside home, and the Menlo Park home.

Interesting story, and thanks for the update from Sean.

What is most interesting to me is that someone who lives off taxpayer money (for everything) wants to avoid being "killed with taxes".

That is just too classic!

What I really really really want to know is how a closed session with the city council can "work out" a way he can avoid taxes on the "gift."

Maybe we can all have access to a "work out" way to avoid taxes as well.

I look forward to seeing a story on the outcome.

Re taxes

Compensation is defined broadly by the IRS, as it should be. If I got consideration in the form of company stock or options, the fair market value is taxed as INCOME the year it it granted. Loans forgiven, or downpayments received is income to the recipient.

As an owner of the "Bank of Menlo Park" (because I am a tax payer), I resent closed door negotiations over loans.

What other bank is willing to wait two plus years until a previous home is sold? What other bank will wait and work something out so a client doesn't get "killed by taxes?"

Riverside having a real estate problem? Too bad!

Rojas is great at taking risks...for other people. Why doesn't he do what EVERY OTHER person would do and sell his house in Riverside at a loss? Why are we subsidizing his bad housing choice? How long has he been working here now, two or three years?

"He noted that the loan is secured both by the Riverside home, and the Menlo Park home."

Wait -- didn't he just tell us that the Riverside home is under water? [Portion removed; disrespectful language]

Let's think this through.

It's not clear how the explanation makes sense. S'pose he had $127,000 in cash and paid off the down payment loan. No tax burden there. Now s'pose he sells the Riverside home at a loss. NO tax burden there either, except he may have to pony up new money if the loss is too large. Now s'pose he sells off some securities or other capital asset. The tax rate on long term capital gains is 15%. It's never going to be lower. Obama's pushing for 20%, and the infamous Bush tax cuts are set to expire.

He might face a tax issue if 1.) he sells the Riverside home, now a rental unit, at a substantial long term gain over what he paid for it, say twenty years ago, but, 2.) he still has 2005 real estate boom year expectations for the value of the property. In that case, he has a mental "loss" of the difference between the boom expectation value and the value he'd have to sell at. If he did buy many, many years ago, then renting the home would probably provide a net positive cash flow, so he'd lose that as well.

But what's the difference between cashing out the Riverside home, paying taxes and then re-investing the net capital gain in securities, and holding the home waiting for real estate to outperform securities?

So the issue is not that he will take a loss on the Riverside home, but that he will have to pay taxes on a gain, and still tastes the 2005 real estate market highs, or believes the current market is temporarily undervalued. It's not a tax issue, he has to pay taxes on the sale of that property in any event, its an issue of being forced to sell during a market downturn in which he believes the home is relatively undervalued. (Relative to what I wonder?)

I see no problem with letting him keep the Riverside home, and re-negotiation the loan, so long as the city takes a stake in the home equivalent to the amount of money he should have paid it, and, since the city is saving him tax money, it should take a little bit piece of that as well, for its trouble and its kindness. (Rojas will be a 6-figure pension guy.)

The issue is that public officials don't think that way and they don't negotiate that way. Anyone who has read the Bohannon Developer Agreement sees directly the sections written by Bohannon's lawyer that protect Bohannon and the sections written by the city that fail to protect the city.

Now, had Rojas done a better job at driving the deal with Bohannon, I would have less of a problem, but all I see is the city bleeding public money, because "greens" are weak over money, and so is Boyle by the way, he's a "trojan horse" Republican whose idea of running the city like a business means giving away public wealth to private parties, not maximizing public wealth.

I guess I'm wondering why paying taxes at the published rate is the taxpayer's problem, particularly for a guy with multiple houses and a future 6-figure pension.

Just Sayin' writes: "I guess I'm wondering why paying taxes at the published rate is the taxpayer's problem, particularly for a guy with multiple houses and a future 6-figure pension." That is an excellent point.

And I had to laugh when I read "new guy's" comment, which was an echo of my reaction: Here's a guy who's making six figures -- and will make six figures for the rest of his life after retirement -- all on the taxpayers. And he's complaining about HIS tax burden??? Earth to Rojas ... can you spell reality?







Report

Maybe he believes that since the money he is paid from and the gift of the loan is from taxed money, meaning that the money is already taxed and he should not have to pay tax on top of that. I wonder if he asks for his taxes back when he goes shopping as well?

The ideas of sweetheart loans is just plain wrong to me. Towns simply do not know how (or choose on purpose) to write contracts for housing loans that can be gamed, and from closed negotiations, gamed from the inside.

There may not be anything illegal about Rojos for not selling his house in Riverside. However, if I were to receive such a gift with terms as I can imagine they are written, I would interpret them to mean that I will be selling the house in question (as early as possible) in order to fulfill on my responsibilities as written in the contract for the loan/gift.

I believe, ethically, Rojas should stop gaming the system.

I seriously doubt that the Brown Act permits the renegotiation of this loan to be done in closed session. I urge the Council to put this matter on an open session agenda so that citizens may comment on this matter BEFORE the loan is renegotiated.

Peter:

they will simply argue that this is a personnel matter and as such can be done behind closed doors.

Menlo Voter states"they will simply argue that this is a personnel matter and as such can be done behind closed doors."

The Brown Act personnel exclusion is permissive not mandatory.
What the Council thinks they 'can' do and what they SHOULD do are two different things.

Enough already. Its clear from your posts that you don't have the entire story, and I'm not going to dignify your nasty comments with a more detailed explanation than what Glen already told Sean in the interview.

All your speculation about our Riverside home, gifts, taxes, etc. is just vicious allegations that incite others to spout venom.

My husband is honest and ethical in his profession and private life and I am proud to be his wife. I'm confident if you knew him personally, you wouldn't be so vicious with your queries.

I find it interesting that you are all spending so much time discussing this. I'm sure you can find other things to complain about...say, the oil spewing into our ocean at an alarming rate with no end in sight.

Mrs. Rojas -

It's truly admirable for you to come to your husband's defense, refreshing, in fact. Mr. Rojas is obviously very lucky to have you!

But the fact is that Mr. Rojas is knowledgeable in these issues and that he negotiated a very attractive loan and compensation package from his new employer. Your husband made a business deal and he should be willing to stand by his representations and live by the terms of that loan. Why should citizens expect less?

None of that is venomous.

Aro said "I'm sure you can find other things to complain about...say, the oil spewing into our ocean at an alarming rate with no end in sight."

Suggestion: Start another thread and see if you get any bites.

I figured you would find a way to blame it on Rojas.

With all due respect to Mrs. Rojas, asking our city manager to live up to his financial agreements, even if it means selling a second home in a down market, is not venomous. I've seen no "vicious queries" in this thread, only reasonable questions about how our tax dollars are being spent. As far as speculation, what else can the public do when negotiations are taking place behind closed doors? The discussions in this thread are healthy and relevant.

Menlo Mom,

Right on!

Brown Act :
“In enacting this chapter, the Legislature finds and declares that the public commissions, boards, and councils and the other public agencies in this State exist to aid in the conduct of the people’s
business. It is the intent of the law that their actions be taken openly and that their deliberations be conducted openly.”

“The people of this State do not yield their sovereignty to the agencies which serve them. The people, in delegating authority, do not give their public servants the right to decide what is good
for the people to know and what is not good for them to know. The people insist on remaining informed so that they may retain control over the instruments they have created.”

IF the Council is discussing the loan revision in closed session, a dubious and probably prohibited practice, then such discussions MUST be agendized and the public MUST have the right to comment on this matter BEFORE any such closed session.

Further Brown Act guidance states:"The personnel exception specifically prohibits discussion or action on proposed compensation in closed session, except for a disciplinary reduction in pay. Among other things, that means there can be no personnel closed sessions on a salary change (other than a disciplinary reduction) between
any unrepresented individual and the legislative body."

What is not clear about the law and this guidance?

Discussion about a loan to an employee is not protected by the Brown Act. It is a bonafide business transaction, just like any budget or expense item.

This is not a "personnel" issue.

Peter:

you tried that with the school board. What did it get you?

Menlo Voter asks:"Peter: you tried that with the school board. What did it get you?"
1 - a $6000 legal bill
2 - and a School Board that is now on notice that they are being watched carefully.

However, not a single other person joined me in my effort and I did this AFTER the new Superintendent had been chosen behind closed doors

In the case of Menlo Park and the City Manager's loan I hope that there will be outrage BEFORE the fact that this is being done behind closed doors and that the Council will properly move this discussion to a public session. However, I also suspect that no one really gives a damn and that this too will proceed in secret. If the citizens don't care the Council will simply do whatever it wants without fear of being challenged.

I'm not sure how it was "disrespectful" of me to point out that it seems disingenuous to guarantee a loan with a house whose net value is less than zero, but I apologize to the Alamanac censor for overstepping that invisible line.

I would like to underscore Just Sayin's observation:

"Anyone who has read the Bohannon Developer Agreement sees directly the sections written by Bohannon's lawyer that protect Bohannon and the sections written by the city that fail to protect the city."

Rojas has demonstrated that he knows how to negotiate a contract that serves his own best interests. Why is he seemingly unwilling to do the same for the city?

I also suspect that some of Rojas' current positions may result in a degradation of my quality of life and concomitant loss of housing value. Maybe it would make sense to tie his compensation to incentives. Give him a pittance of a base salary -- say, $100k -- with additional $ if his efforts enable MP to run more smoothly or make this a better place to live. As it is, he apparently is not required to meet any performance standards and can concentrate his efforts on feathering his own nest.

The following email has been sent to the Menlo Park City Council:

Dear Council,

It has been reported that the Council is "discussing" revising the terms of a loan made to the City Manager.

Any revision by the Council of a loan to a current City employee must made in full compliance with the Brown Act. Specifically, any and all discussion of this matter by the Council must be conducted in open session pursuant to a properly agendized topic and with the public being given the opportunity to comment prior to any Council action. The Brown Act 'personnel' exemption does not extend to revising the term of a loan to a current City employee.

If the requirements of the Brown Act are not followed in discussing and deciding this matter then any Council action will be subject to nullification and the City will have to bear any legal expenses incurred to obtain your conformance with the Brown Act.



Peter Carpenter

Still tilting at windmills I see, oh Peter The Great.

Just wondering ask:"Still tilting at windmills"?

Just doing my job as a citizen while the Just Wonderings of the world sitting around sucking their thumbs.