Phil Matier: AC Transit Taking Big Loss On Home Of Former GM
OAKLAND (KCBS) – Directors for the Alameda-Contra Costa Transit District have sunk more than $500,000 into an Oakland Hills home for their former general manager and they’re now stuck with it.
AC Transit foreclosed on the home in July, six months after former GM Rick Fernandez stopped making his loan payments. Fernandez had first requested a loan of $400,000 back in 2004 to buy the home that belonged to his late girlfriend, herself a former AC Transit employee.
KCBS, CBS 5 and Chronicle Insider Phil Matier:
A year later, the district loaned Fernandez another $100,000 as he said he wanted to make improvements to the house. He got the loans in lieu of a pay raise, though at the time he was making $276,000 a year.
Eventually, after a falling out with the agency, Fernandez left his position. Within a year of leaving, he began missing payments to cover the home loan. Although he made some “catch-up” payments in January, he later notified AC Transit that he was done making payments.
That has left the cash-strapped agency with an estimated $232,000 loss.
In a recent report to the district’s board, current General Manager David Armijo said the home is now appraised at $300,000, more than $210,000 less than the district’s investment. Armijo has suggested selling the property, but directors are exploring renting the house first in hopes that the housing market rebounds.
You can hear Phil Matier’s comments Monday through Friday at 7:50am and 5:50pm on KCBS All News 740AM and 106.9FM.
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