On Concerts History, Succession, and Oversight

Normally I try not to rehash what may or may not have been done optimally by staff.  It has always been more important to me to focus forward, how to mkae progress based on the best available information.  But given the amount of politicization going on, I wanted to clarify a few items.  First, let's talk about a bit of history:

At our April 19, 2022 meeting, I raised the issue and it was established that the way the City was accounting for concert funds was not appropriate.  Staff at the time indicated that rather than record inflows and outflows through revenue and expense accounts, all activity was recorded against a liability.  This is a bit technical, but the issue with recording concert activity through a liability account is not that the money was necessarily mishandled. It's that this approach keeps the financial activity out of the City's normal operating statements, budgets, and financial reporting.

For example, if the City collects $50,000 in donations and spends $45,000 on concerts, the Council and public should see both figures, not just the $5,000 remaining.  While individual transactions are recorded, the revenue and expenses do not appear in the City's operating results or budget to actual reports. In fact, because of this there was never any budget established.  As a result, the Council does not have the same opportunity to review, or oversee these activities as it does other City programs.

Here is our former City Manager discussing it:

And to further explain, our former Finance Director:

At this same meeting, it was also established that the concerts had always been City events.  Any discussion now that says or implies it was not a City event is incorrect.  Here is former Councilmember Cloven stating this fact:

And when referencing Concerts as a City event, the one who first brought up the idea of oversight was Councilmember Tillman:

And further discussion of how such oversight could occur:

The fact that the concerts were City events, not volunteer owned, was established in April 2022, when former Councilmembers Cloven and Wolfe were on the Council, along with Councilmembers Tilman, Diaz, and myself.  This is when the discussion of oversight was started, as it was clear at the time that activity wasn't being recorded as it should have been.

During this same meeting, given the Concerts were City events, we also discussed the idea of a succession plan for continuity and sustainability of the events.  Here is our former City Manager discussing how succession could work:

And in that meeting, Howard Geller called in and also talked about succession:

This is quite a bit different than Geller stated at our 10.20.26 meeting.  At that meeting, Geller made the claim that after he booked the bands and signed the contracts (which would also be inappropriate) for the 2023 season, he decided to retire because the City was taking over.  However, in the January 2023 issue of the Pioneer (https://issuu.com/claytonpioneerinc./docs/jan_20_the_pioneer_2023), Geller stated he was already planning to retire at the end of the 2023 summer concert season and that it had nothiing to do with the oversight committee - directly contradicting his 10.20.26 statement:

At the 10.20.26 meeting, Geller went on to claim that the City didn't consider any of the knowledge or experience he had after being involved for the length of his tenure.  Of course, this is also not true.

During the summer of 2023, Councilmember Trupiano spent extensive amounts of time shadowing Geller and documenting the practices and processes that were previously undocumented and informal.  In fact, here is an email from February 2023 where Geller expresses favorable comments regarding the transition:

Given the actual history, it may seem odd that the tune of so many involved in the Concerts changed.  Originally after identifying financial irregularities, all were in agreement that oversight was necessary, that proper recording was necessary, that succession planning was necessary, and that the current folks involved were planning to retire.  An orderly transition is always preferable.  So what changed?

Let's look at the timeline:

• Apr 2022 - Financial accountability, Council oversight, and succession planning identified as priorities.  Established that historical accounting of concerts done inappropriately.
• Dec 2022 - Council unanimously establishes dedicated concert oversight.
• Jan 2023 - Geller states his intention to retire after the 2023 season and confirms it was unrelated to new oversight committee
• Feb 2023 - Geller reiterates his intention to retire and speaks favorably about Council involvement
• Mar 2023 - City terminates Master Use Agreement (MUA) with CBCA that provided for waiving essentially all fees
• Mar 2023 - In response to the termination of the MUA, AJ Chippero who had previously agreed to do promotion of the Concerts as has been done in the past, rescinds his contract, leaving the City without promotion
• Spring 2023 - Councilmember Trupiano assumes all sponsorship activity as Julie Pierce, who was formerly involved in securing sponsorships, did not return any phone calls or attempts to make contact.  Under Trupiano's leaadership, sponsorship increases significantly.  CBCA had previously contributed at least $5K each year to the Concert series, however after the cancellation of the MUA, concert donation for that year was $500, and after that zero for every year thereafter.  It is completely the perogative of any organization whether or not to make a donation.

It seems pretty clear what caused folks to change their tune.

At the same time, the Committee was focused on ensuring that the concert and other special event activty were recorded propertly, and completely.  Historically, certain City costs were not allocated to the concerts or other activities that were being supported.  This means that any purported "surplus" from 16 years of activity, benefited from the fact that the City was subsidizing the activity and not recording those charges against the concerts.  Things like police, administrative staff, maintenance, these were not consistently or at times ever charged to these programs.  Here is our City Manager addressing the matter of apples to apples comparison:

This is why my previous post called the current posturing theater, and that's being generous.  Given the fact pattern, it's manufactured outrage. Comparing current period activity where things are being accurately tracked, to historical results that were not, is misleading at best.  Any activity can appear great if costs aren't included.

Concerts in the Grove: Reality vs. Political Theater

Recently there has been conversation around the Concerts in the Grove series, how they are operated and managed, and the overall finances of the concerts.  This appears to be an attempt to politicize the concerts which is unfortunate.

First to clarify a few items:

- The concerts are not intended to be a profit making endeavor.  They are held as a general community benefit and part of the activities in the City that bring people together.  Similar to the 4th of July Parade, or National Night Out - these things cost money but the City chooses to do them because they benefit the community.  The City does accept donations and sponsorhips which are great, but making money is not the goal of the concerts.

- There are two primary revenue sources for the concerts - sponsorships and donations.  Sponsorships can be for the concerts alone, or for multiple City events. This revenue goes 100% to the choices the sponsors make.  Donations made at the concerts themselves, or online with the QR code on the various jugs are split 50/50 with our two local school Parent Faculty Clubs - Mt. Diablo Elementary and Diablo View Middle PFCs.  Because it was difficult to reliably secure volunteers to collect funds, the City partnered with the local PFCs to provide volunteers.  This partnership provides reliable collection volunteers, and allows the City to provide direct support to our local children.  At our last Council meeting representatives from the PFCs accepted their checks and it was great to hear from them.  At DVMS, we heard how the leadership class took on responsibility of organizing the volunteers, which is also a great avenue for students to participate.

The City could attempt to monetize the concerts further - We could cease sharing with the PFC.  We could more aggressively seek donations from concert goers.  We could discontinue the utilization of a stage.  We could reduce or eliminate security.  We could reduce or cease advertising.  But all of these take away from the event or the community in some way.

- The idea that the concerts were previously run by volunteers is misleading.  Volunteers have contributed time and effort in varying degrees, but the concerts have always been a City event.  The City provided the venue.  The City provided the insurance.  The City collected and accounted for the funds collected and disbursed.  The City provided security.  And ultimately, the City signed contracts with the performers.

- One of the reasons the City took a greater hand in managing the concerts, and all other City events, was to make City events more sustainable.  Depending on volunteers for critical functions means that  if a key role was unable to be performed for any reason, the event would at risk.  It is not only financial sustainability, but operational sustainability.  For example, in 2023, right about when promotion for the concerts was about to kick off, former Planning Commissioner and promoter A.J. Chippero, quit and resicnded his offer of services because he was unhappy with Council decisions.  Here is the email he sent:

This is the same individual who was paid to manage the Clayton Concerts FB page (now unaffiliated with the City apparently) and has been criticizing the use of a promoter, among other things.  Ironic.  In addition, another person that had previously been responsible for securing sponsorships didn't return phone calls and apparently moved out of the area around the same time - as a result Councilmember Trupiano took on the role of securing sponsorships for all of the City events.

Prior to 2023, former Mayor Howard Geller was the person most princpally involved in the concerts.  Mr. Geller negotiated the rates and instructed the City what to pay the bands.  If the amount negotiated and the amount paid was different, there would be no way the City would know.  Here is Mr. Geller at a Council meeting in March 2023:

If a vendor working for the City behaved this way, it would not be prudent to rely on this vendor to provide critical services that a City event relied on.  This again highlights why it is not sustainable to rely on volunteers for critical functions - the City must be able to make decisions in the best interests of the community as a whole without risk that our events may be in jeopardy.

And on the issue of sponsorships, here is a lookback on the level of sponsorships that the City has secured:

2018: $24,200

2019: $21,375

2020: $0

2021: $2,608

2022: $24,570

2023: $31,500

2024: $54,500

2025: $40,700

2026: $47,600

A few items to note: 2020 was during the pandemic and there were no events held that year.  2021 was also abreviated.  After the previous volunteer who secured sponsorships in the past did not return phone calls nor provide any support, Councilmember Trupiano took over securing all sponsorships begining in 2023, her first full year on the Council.  Part of securing sponsorships is communicating to sponsors the benefit they will receive.  Prominent placement on our banners, on the stage, and in our advertising can encourage more sponsorships.  I think the results speak for themselves.

The Concerts are a wonderful addition to our community.  The reality is that much like a lot of the quality of life items that exist, they cost money.  One of the benefits of the City taking a greater role in managing the concerts, is that they can be accounted for and operated properly.  

Case in point: 

• Historically, costs for things like police, security, advertising, city staff time, or other overhead items were not charged to the concerts.  But that doesn't give a true picture of what they cost and the City has updated how it accounts for all of the City sponsored activity.  That means historically, the true financial activity of the concerts were not accounted for.
• Previously, the volunteers took it upon themselves to block off the Grove Park and not allow people to set up chairs during the day.  This was well intentioned, but illegal and unenforceable.  If a person wanted to use the public park by putting a towel or a chair there, volunteer or no, there was no legal basis that would support taking any action. 
• Historically, the performers were required to have insurance, but there was no record of anyone verifying that the insurance existed.  
• There was no documented procedures for how the concerts were run, which meant that individuals were holding themselves out as representatives, or agents of the City, with no City oversight.  If anything were to happen, the City could still be liable.

All of these things increase risk to the City.  Establishing City oversight, documented processes, and professional services does take time and money.  So does holding the 4th of July parade.  So does maintaining City parks.  So does even turning on things like the splash pad, or the fountain, or any number of things the City does to enhance the quality of life in our town.  It's unfortunate that somehow these community benefits are being wielded to score political points.  I would much rather celebrate all the wonderful things that we enjoy in our community than attack the things that make our town a great place to live.

10.20.26 Meeting Summary and Claycord's Misleading Reporting on Clayton's Investments

Much of our discussion at our Tuesday meeting was regarding the investment reports, and providing context to a misleading article that appeared on Claycord.  Claycord's October 20 article about the City of Clayton's investments is a textbook example of how technically accurate facts can be assembled into a deeply misleading story. The article emphasizes investment policy violations, a $142,000 realized loss, and missing quarterly reports. What it fails to explain is why those events occurred, and what the City's investment decisions actually accomplished.

This information was not hidden from the public. The Council's investment strategy was discussed in open meetings, with supporting materials published in advance. A review of that public record would have produced a substantially different story. Instead, Claycord chose an alarming headline and a narrative of apparent financial mismanagement, without providing readers the information necessary to evaluate either.

Claycord Missed the Most Important Story: The Council Deliberately Improved Investment Returns

In May 2023, the City Council recognized that its investment portfolio was not taking advantage of the prevailing interest rate environment.  At the time, the portfolio was yielding approximately 1.88%, with a substantial concentration in certificates of deposit (CDs), many purchased when interest rates were considerably lower. Meanwhile, market interest rates had increased significantly, creating opportunities to earn substantially more on safe, highly liquid investments.

The Council understood this disparity and deliberately revised its investment policy on May 2, 2023. The new policy reduced allowable CD concentration to 30% and supported greater investment in U.S. Treasury securities. Our objective was to take advantage of higher available yields while maintaining safety and liquidity.  By September 30, 2026, the portfolio's estimated weighted-average stated interest rate had increased to approximately 3.8%, based on the investment schedule reviewed at the October 20 Council meeting.

That is approximately double the original rate.

For a city managing approximately $12 million in investments, that improvement is financially significant. Yet Claycord's article provides no meaningful discussion of the original portfolio's low yield, the Council's rationale for changing the investment policy, or the subsequent improvement.  In fact, adopting the stricter policy itself created the principal compliance exception highlighted in the article.

The Policy Exceptions Were Not a Newly Discovered Problem

Claycord reports that the City exceeded its 30% CD concentration limit for five consecutive quarters. That is accurate, but the article omits the circumstances that created the condition.  When we adopted the stricter policy in May 2023, we knew the existing portfolio exceeded the new CD limit.  The concentration exceptions were therefore an anticipated consequence of changing the policy, not evidence that the Council was unaware of its investments.

The City subsequently brought the portfolio into compliance with its measurable investment limits beginning March 31, 2025. The report also identifies other exceptions, including two CDs purchased after the policy change with terms exceeding the permitted limit. Those are separate issues that warrant follow-up.  A responsible article would have distinguished the expected transition from those additional exceptions. Claycord did not.

The $142,000 Loss Was Not an Unexplained Investment Failure

Claycord prominently features a $142,222 realized investment loss in early 2025 but provides virtually no explanation of the underlying investment decision. On February 4, 2025, the Council publicly considered and approved transitioning to professional investment management through UBS.

The agenda packet explained that the City's existing portfolio was not capturing available investment opportunities. Some CDs were earning less than 1%, while substantially higher yields were available on U.S. Treasury securities. Selling those investments before maturity involved a cost. The financial rationale was that reinvesting the proceeds at higher rates was expected to generate enough additional income over time to justify that cost.

The realized loss was associated with that deliberate portfolio repositioning. It was not an unexpected speculative trading loss. Whether the decision ultimately produced a positive financial return should be evaluated by comparing the cost of exiting the CDs with the additional income generated by replacement investments.

Claycord did none of that analysis. It presented the loss as an alarming standalone figure, despite the public record explaining the City's investment strategy. That is not meaningful financial analysis. It is selective reporting.

Claycord Left Out the Context and Publicly Available Investment Statements

The article also highlights nearly three years of missing quarterly investment reports. That reporting requirement was not met, and it should have been. There is no reason to minimize that deficiency. But Claycord again leaves out important context.

The Council was aware of the backlog. Preparing these reports was a labor-intensive process requiring staff to manually compile detailed investment information. With limited staff and competing priorities, the Council directed that underlying investment statements be made available on the City's website.

Staff continued reviewing investment information, and the underlying statements remained publicly available. The absence of the formal reports did not mean the investments were unmonitored.

The City has also substantially improved its reporting process. Staff now use AI-assisted tools to complete work that previously took days or weeks in hours or less, while retaining responsibility for reviewing and validating the results. Posting statements did not fulfill the formal reporting requirement. But that is a very different situation from the impression of secrecy or financial neglect created by the article.

The Actual Financial Results Were Substantial

The same October 20 report cited by Claycord shows that, over ten complete quarters, the City generated:

• $1.13 million in gross investment income.
• $947,000 in net investment earnings after management fees and realized losses.
• Sufficient projected resources to cover six months of anticipated expenditures throughout the period.

Claycord briefly mentions these results but gives them almost no meaningful analysis.

It is difficult to understand the City's financial management without examining its investment performance, the purpose of the policy changes, or the economic rationale for repositioning the portfolio. A $142,000 realized loss makes for an alarming headline. Explaining the investment decisions behind it takes a little more effort, or journalism.

The Council deliberately revised its investment policy in May 2023 to take advantage of higher market interest rates. The portfolio's estimated stated interest rate subsequently increased from approximately 1.88% to 3.8%. We publicly discussed our investment strategy, approved professional management in February 2025, and brought the portfolio into compliance. We also improved the reporting process to address the administrative burden on our small staff.

The missing context was readily available through public Council meetings and published agenda materials.  Claycord did not need special access or an extensive investigation to find it. It simply needed to examine the decisions behind the numbers rather than select the numbers that made for the most alarming headline.

Upcoming Meeting 10.26.26 and Townhall Q&A 10.24.26

At our next meeting, we will be having a few items in our Recognitions and Presentations section, including the presentation of funds to the Parent Faculty Clubs for MDE and DVMS, as well as our Do the Right Thing recognition as well as a presentation by County Supervisor Carlson.

I'd also like to announce that I will be hosting a Townhall Q&A at 3pm on Saturday, October 24 at 3pm in Hoyer Hall adjacent to the library.

Measure M and The Math of Economic Development

It is no secret that Clayton has financial challenges ahead.  I have written about it here and here.  Our City Manager has written about it in his newsletter on multiple occasions.  I also wrote about it in the September issue of the Diablo Gazette (page 4).  And the entire City Council voted to place two tax measures on the ballot this November, Measure M which is a 1% sales tax, and Measure N which is the renewal of the Landscape Maintenance District.  Both are critical to the financial stability of the City.

Some have said that Measure M, the 1% sales tax that is on the ballot in Clayton this November is only a band-aid and that the better approach is economic development. That sounds interesting at a surface level, but it belies an ignorance of the actual math involved.  Clayton does not receive the entire sales tax collected by a business. In California, a local jurisdiction generally receives approximately 1% of taxable sales, not the 8, 9, or 10% collected at the register.  The rest goes to other sources, primarily the state regional bodies.  

Measure M would add a 1% local transactions and use tax and is projected to yield $1M in additional revenue to the City of Clayton. This is because the added 1% would be dedicated to Clayton and come back 100% to the City unlike the rest of sales tax collected.

That means that to just match approximately $1 million of annual Measure M revenue through ordinary retail economic development, Clayton would need roughly $100 million in additional taxable sales every single year. Not $100 million in property value. Not $100 million in construction. Not $100 million in “economic activity.” Roughly $100 million in taxable sales, every year.

What does $100 million actually look like?  A few examples to illustrate.

Walmart U.S. generated $483 billion in sales last year across 4,611 stores. That works out to roughly $105 million per store. So, as a simple scale comparison, replacing $1 million of City revenue through new taxable retail sales is roughly equivalent to adding the annual sales volume of an entire Walmart. Home Depot generated $164.7 billion in sales across 2,359 stores, or roughly $70 million per store. One average Home Depot would not even get you to $100 million.

How about restaurants?

Chipotle currently reports average restaurant sales of about $3.1 million per location. At that level, it would take roughly 32 Chipotles worth of annual sales to reach $100 million. That's a lot of burritos.

How about auto sales?

A CarMax-sized operation gives a good sense of the scale. CarMax generates roughly $100 million in annual revenue per location on average. That is approximately the level of annual taxable sales Clayton would need to generate about $1 million in local sales tax. But think about what an operation of that scale actually requires: a very large commercial site, extensive parking and vehicle storage, significant traffic, and regional draw. That is not something that fits into a storefront downtown. It would require a major commercial parcel and a level of development Clayton simply does not have sitting vacant and ready to absorb.  And that assumes that Clayton is a desireable location for this type of business.

How about a hotel?

A hotel is another useful example. Assume an average room rate of $250 per night and a 10% hotel tax. The City would receive $25 per occupied night. To generate $1 million per year, the hotel would need 40,000 paid nights annually, or about 110 rooms occupied every single night of the year. That is not a small inn or boutique hotel. It is a substantial lodging operation with a large building footprint, parking, staffing, and an assumed steady year-round demand.

How about a data center?

Santa Clara reports that recently developed data centers typically generate about $200,000 to $400,000 per year in property tax for its General Fund. At that level, Clayton would need roughly three to five data centers to generate $1 million annually. These are massive industrial facilities, often hundreds of thousands of square feet, requiring large parcels and major utility infrastructure. Where exactly would Clayton put three to five of them?  I'm not aware of big tech wanting to locate data centers in Clayton.

Economic development can absolutely help Clayton. More restaurants, shops, and services would be good for the community and would add revenue incrementally. But simply saying economic development is the answer is not a financial plan. The scale required to match $1 million of recurring revenue is enormous, which raises a basic question: has anyone making that argument actually done the math?

And for those seeking leadership positions in this City, seeking to make decisions about an $8 million budget, understanding the difference between “economic development sounds good” and “here is how much revenue it actually produces” should be a pretty basic expectation.

Measure M is not a substitute for economic development. It addresses a different problem: Clayton has a recurring structural deficit that incremental business growth is not realistically going to close at the scale or speed required. Measure M is projected to generate approximately $1 million annually in locally controlled revenue, enough to materially address that recurring gap and put the City on a more sustainable financial footing for decades.

Upcoming Meeting 10.6.26

At our next meeting, the agenda is light, however we will be receiving a presentation from Save Mt. Diablo as an update to their ongoing work in the area.

If you have thoughts or questions on the above, please let me know.

My Endorsement of Kim Trupiano for Clayton City Council

As I prepare to conclude my service on the Clayton City Council, I am proud to endorse the reelection of Kim Trupiano for City Council.  Kim demonstrates qualities that matter in local government: experience, sound judgment, and a genuine commitment to the people of Clayton.

I have had the opportunity to serve alongside Kim and see firsthand how she approaches the job. She is one of the hardest-working Councilmembers I have ever seen.  Kim does her homework, asks questions, follows issues through, and does not give up when a problem is difficult. She is tenacious in addressing resident concerns and consistently keeps the people of Clayton at the forefront of her decision-making.

We have worked together on some of the City's most difficult issues, including the Housing Element, the Geological Hazard Abatement District, the library refresh, and the City's response to the Civil Grand Jury report.  What stands out most is her persistence. Kim does not simply identify a problem and move on. She stays with it, pushes for answers, and works to get it resolved. That work ethic, combined with her experience and commitment to residents, has earned my trust and my vote.

Clayton needs Councilmembers who have the necessary experience to guide policy making decisions, will do the work, ask hard questions, and listen to residents.  I have seen Kim do that firsthand and that is why I am proud to endorse Kim Trupiano for Clayton City Council.