Tuesday, December 29, 2009
Center for Biological Diversity Annual Financial Report for 2008
There's been some discussion about the way CBD is reimbursed for the legal costs it incurs from its lawsuits, and I thought it would be interesting to find out how much of CBD's revenues come from lawsuits. Here's a link to CBD's financial report for 2008. Of its listed revenues of $9,214,681, the amount listed under "Legal returns" is $1,398,161. I'm assuming that includes revenues from winning lawsuits and being reimbursed for legal costs. (I know, I know, when you assume you're making an ASS out of U and ME.) That's about 15% of revenues.
http://www.biologicaldiversity.org/publications/reports/AnnualRpt2008.pdf
Posted by Steve Sinai
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20 comments:
The 2003 Annual Report shows Legal Returns of $992,354 against Total Revenue of $2,983,265. That's pretty close to 33%. In fact, legal returns are more than double the revenue from donations and membership.
You need to go back to 2003 and cherry-pick data to support the idea that filing lawsuits is a major source of income for CBD?
Here's the breakdown of their legal returns going back to 2002:
2008 (Legal)$1,398,161 (Tot Rev)$9,214,681 15% of TR
2007 $486,032 $6,010,407 8%
2006 $39,114 $3,968,380 1%
2005 $684,936 $3,513,044 19.5%
2004 $718,569 $2,205,207 32.5%
2003 $992,354 $2,983,265 33%
Over the past 6 years, the CBD has received about $4.3 million in legal returns.
Talk about cherry picking! How about being a hypocrite? Pacifica's budget is around $40 million. So what kind of gyrations have you and others been willing to go through to save or gain 15% -- i.e., $6 million. Now you trivialize that percentage. In fact, didn't you support a potentially dangerous biodiesel refinery scheme which in the absolute best case might have brough in to the city a whopping $60k (or roughly .15%) per year?
Th majority of CBDs revenue stream seems to be grants and charity. Sounds a lot like Pacifica, doesn't it?
Thanks for listing the numbers for the last few years, Jeffy.
Todonymous, we were talking about the CBD budget, not the city's budget. You were nowhere to be found on Measure D. (Which, given your record of success on city issues, is probably a good thing.)
As for the mere $60K/year the biodiesel plant would have brought in, are you suggesting that we should have not supported the Houman project because it will bring in even less revenue for the city?
Steve,
given the trend on their finances, it looks like CBD moved from the litigation model to a more activist/education model with revenues focused on grants and donations . . . and is now moving back towards a litigation model. We'll see what the numbers for 2009 indicate.
The biodiesel plant would not have brought any revenue to the city. Its the same as the solar panels at the plant. They save money in the sewer budget, but ultimately, have your sewer rates gone up or down the last couple years? They have more than double over the last 7 years, and it wasn't because of the balloon payment on the debt.
Here' the interesting part of the biodiesel argument: if someone developed a project that saved you $60,000 but they mishandled your money to cost you over $2 million . . . why the hell would you still support the $60,000 without screaming at them about the other $2 million?
Jeffy, I think the series that make up the revenue numbers is too short to make any determinations about the CBD's business model (if that term even applies.) It will be interesting to see the 2009 numbers, though.
The biodiesel plant didn't cost the city $2 million. And this is the first time I've heard anyone say it would have produced no revenues. It seems like every time we talk about it, the cost and revenue numbers become more and more exaggerated for effect. The amount it cost the city has gone from the approx $130K mentioned by the city manager (which is probably understated a little) to a now $2 million. And the revenues have suddenly gone from $60K/year, which was a number that I don't remember anyone disputing, to nothing.
I'm not sure what's more exaggerated - CBD's purported financials for the golf course, or the purported financials for the biodiesel plant from its opponents.
Jeff & Steve - Great info. Thanks for posting this.
Some observations:
1) Public companies are required to declare any revenue streams over 10% as "material" and break it out separately on financial statements, as CBD does here. I think a fair characterization is that recouping legal fees under EAJA is a very important, but not dominant revenue stream for CBD. Certainly this would be a very different organization without it. Over the six year history listed here, they average 15% contribution from legal returns.
2) What happened in 2006? I'm guessing that is when they took the $600,000 hit for the Chilton Ranch defamation judgment. Looks like they simply subtracted the judgment from the legal revenue stream. If you add that back in (i.e. they don't lose that lawsuit), the legal returns is 17% plus over the six years.
3) Assuming this is their complete history, I think the notion of EAJA being a critical component of a "business model" still holds. The early years show legal returns as a third of the revenue. The promotional literature and website brag about their litigation success as a means to secure contributions. Also I would think that the EAJA contribution is somewhat self limiting, as only small orgs or individuals (by some definition/criteria I don't understand) are supposed to get the reimbursement. The new CA franchise/spinoff - Wild Equity, needs to establish its street cred by launching and prevailing on a lot of lawsuits. The EAJA legal returns will keep the lights on until some big contributors can be secured. It is a bootstrap funding stream.
Net net - The characterization of "gravy train" is overstating the situation, but "Abuse of EAJA"? - Definitely.
Steve,
kind of detracting from this thread, but here's the breakdown of the biodiesel.
No one is disputing the $60K number, but to call it "revenue" is a little misleading. The Whole Energy lease with the city called for them to pay rent of $5000/month in the form of cash, energy to the sewer plant, or the biofuel equivalent. The plan was to set up a biodiesel run generator to the sewer plant, and then take the plant "offline" from PG&E during peak hours. (having served in the US Navy Nuclear Propulsion program, the idea of flipping from the PG&E grid to an independent generator seems pretty risky, but that's a different issue.)
However, that $60K goes through the Sewer Enterprise, which is a different budget (by law) than the city's General Fund and the revenue is generated by your sewer fees. So technically speaking, the biodiesel plant was "generating revenue" in the sense that it was intended to cause a net savings of $60K per year in the budget of the Sewer Enterprise. Which meant it would take about $4/yr off the bill of every sewer rate payer in Pacifica.
However, that would not necessarily be the case. I used the example of the solar panels, which save somewhere around $150,000 per year in our PG&E energy bills through the Sewer Enterprise. My comment was that the sewer rate payers have not seen those savings in their bills because the city has completely mismanaged the sewer bonds. We save a little here on feel-good environmental projects, we lose significantly more somewhere else because no one with any damn business sense is in charge.
As for the biodiesel/Houman argument its not comparable. The Houmans are investing their own money. The biodiesel plant was investing tax payer money (or more specifically sewer rate payer money). There is no net loss to the city should the Houmans fail to develop their project, and there is an argument that their development is precisely what is needed for the revitalization of Palmetto, moreso than the benches and pretty pictures the city paid $60,000 for.
Finally, the $130K stated by the City Manager was the amount of money the city spent into this biodiesel project so far, with the expectation that the money would be reimbursed by the CARB grant (which it clearly will not). I'm not sure where that $2 million number came from, but the city is still on the hook for some costs and liabilities from the biodiesel project, which will probably be resolved in a lawsuit if Whole Energy leaves the city hanging (as they have appeared to do).
$60,000 revenue ($5,000 monthly rent) traded as biodiesel fuel. WWTP infrastructure and maintenance paid by the city (property owners), including an expensive generator (something like $85,000+), 4 years in planning, laying down a concrete foundation pad the WEF trailer (described as a storage room foundation in the WWTP budget about 2004).
Partnership the WEF vendor, no expertise, limited money, no concept of potential risk issues, inadequate liability insurance, now clean-up and legal cost. WEF even intended to avoid double insulating their trucks, which is required California law.
This one was promoted by Nancy Hall and Councilmember Vreeland, approved by 7 year city council. At risk: our WWTP, people. Break even cost had it worked, probably 8-12 years. Had it not worked in a really bad way, unlimited risk for the city (property owners).
To date:
No public comment from Vreeland who agressively lobbied for this high school science project, shamelessly maligned citizens opposed to it and freely spent our tax dollars on another self-promotion stunt.
He gets another pass? Why?
Jeffy, the $2 million figure came from your previous post. I don't know where you got it.
If you look at the lease for the biodiesel plant, there is no mention of anything like a sewer enterprise fund. The city was the landlord, and Whole Energy was the tenant, so any rent paid to the city, whether in the form of money or fuel, would have shown up on the bottom line. That you put the word "revenue" in quotes in your previous comment tells me that you're playing word games rather than discussing the more basic issue of whether the city would have made money from the biodiesel plant. In any event, what particular account the money would have ultimately gone into is irrelevant. Whether the money goes into the right pocket or the left pocket, it's still money the city gets.
Finally, nobody was building a nuclear power plant in the Quarry. Switching between the PG&E grid and a local generator is not risky, and all kinds of businesses and buildings have alternative power generation systems that allow them to operate equipment off the grid.
Steve,
The $2 million is a conservative estimate of the added cost of interest from the mismanagement of the Sewer Enterprise, especially through the refinancing of sewer bonds while the city was siphoning $700,000 per year from the Sewer Enterprise to the General Fund. To be honest, I haven't crunched the numbers pately but it is probably more like $10 million.
I'm not sure you understand the difference between the General Fund and the Sewer Enterprise, but I'm hard-pressed to teach you something you don't seem willing to learn. They are not the same thing and they do not operate under the same financial rules. To call what the city would receive "revenue" is playing fast and loose with the definition of the word revenue, which is why I put it in quotes.
I forgot to mention - if there's a project that I think brings much needed income into the city, I'll probably support it regardless of who's behind the project...from Measure L, to the biodiesel plant, to the Houmans.
There's nothing unusual about a local government offering some financial assistance or seed money to a business if they think it will bring a financial benefit. Unfortunately it didn't work out for Pacifica, but there's always a little bit of risk in decisions like that. You don't automatically say no to government funding of a project simply because there's a risk involved. You try to determine whether the reward is worth the risk, and proceed on that basis.
OK let me back up for a second . . . there is another $2 million I have been complaining about. In the budget for the Sewer Enterprise, there was a line item inserted last year for $2 million for this year and $2 million for next year under the curious name of "Sewer Plant Replacement" (I had an argument at the podium with Julie Lancelle when this came up, because I certainly understand what the words "sewer plant replacement" actually means versus what they claimed it meant). My argument was that during a massive recession and job layoff period, it seemed sinister to then hit up the Pacifica homeowners for an additional $2 million per year to repair the sewer infrastructure. Mostly because I wouldn't trust this City Council to actually use that money to repair sewer pipes and equipment.
However, I was also talking about how the city refinanced the sewer bonds for our revolving loan, and created additional interest on that loan. I originally calculated that additional interest to be $2 million, but I've been working with Jim Wagner to untangle the web of refinancing the city did and I've yet to complete those calculations. But it looks like I was off by a lot, and the real figure of additional interest this City Council heaped upon future generations of sewer rate payers was closer to $10 million.
Jeffy, are you saying the supposed $2 million loss is the result of the biodiesel plant, or simply general mismanagement of the sewer enterprise fund. If it's the latter I won't argue, but it sounded to me like you were saying the $2 million was caused by the biodiesel plant, which is absurd. And now you've suddenly expanded that $2 million to $10 million? I think that proves my point about exaggerating the numbers for effect.
If you have a document that directly ties the rent from the biodiesel plant to the sewer enterprise fund, I'd be interested in seeing it. I've never found one, and I'm not simply going to take it on your authority.
Steve,
No one was more at the forefront of supporting development and needed revenue than I was during the last 4 years. The Prospects, Harmony@1, the Houmans, the condo at Beach Boulevard, Measure L . . . geez I even tried to apologize to the owners of the property on the corner of Monterey and Waterford for not showing up to the planning commission meeting to support them.
If I felt for a second that biodiesel project was legit and would have brought in needed revenue at a minimal risk, I would have supported it.
Mike, Vreeland doesn't get a pass, nor does 7 year city council. Getting information out there for next year's election will be important. I liked the two-sided Vreeland article on this blog about two months back I think.
This is the lowest I've ever seen Council lay. They know they have completely screwed up Pacifica and they are hoping this mess will blow past them without having to admit culpability.
Listening to Council and the Coastal Commission blame each other for the delays that would have mitigated the present costly disaster on Esplanade is sickening.
Watch for another feel good project or Vreeland taking credit for removing old outflow pipes on Sharp Park Beach to avert everyones attention.
2010. This year we take our city back from these children.
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