By clicking on the following portal you can access a copy of the December 27 Sentinel
(December 26) SACRAMENTO—The California Supreme Court on December 23 reestablished the essential elements of the Colonies Lawsuit Settlement Public Corruption Prosecution, granting the gist of prosecutors’ appeal more than a year and two months after the Fourth District Court of Appeal in Riverside dismissed the most crucial charges lodged against developer Jeff Burum, the central defendant in the case.
In February 2010, a grand jury indicted former county supervisor/county assessor Bill Postmus and one of his political associates, Jim Erwin, who had been the head of the county sheriff’s deputies union before he was appointed by Postmus to serve as assistant assessor. Five others were identified as unnamed co-conspirators in that indictment, which charged Postmus with a host of crimes, including conspiracy, soliciting bribes, accepting bribes, perjury, filing falsified documents and other violations of the public trust. The charges were filed in connection with his November 2006 vote, while he was still chairman of the county board of supervisors, to approve a $102 million legal settlement between the county and the Colonies Partners, which was controlled and managed by Burum and Dan Richards.
Erwin, who had been instrumental in vectoring monetary support from the sheriff’s deputies’ union to Postmus’s supervisorial and assessor campaigns and was subsequently appointed to one of two assistant assessor positions Postmus established after his election as assessor, was charged with conspiracy, extortion and bribery, perjury, filing falsified public documents and tax evasion. Prosecutors alleged that Erwin, who was working as a consultant for the Colonies Partners in 2006, threatened to disclose damaging information relating to both Postmus and his then-board colleague Paul Biane before Postmus, Biane and a third member of the board, Gary Ovitt, voted to approve the $102 million settlement of the lawsuit the Colonies Partners had brought against the county over flood control issues at the company’s Colonies at San Antonio residential and Colonies Crossroads commercial projects in northeast Upland. After the settlement was approved in November 2006, according to prosecutors, Burum rewarded Postmus, Biane, Erwin and Ovitt’s chief of staff, Mark Kirk, with $100,000 each in contributions to political action committees they controlled.
Initially Postmus and Erwin both pleaded not guilty to those charges. But in March 2011, Postmus pleaded guilty to all fourteen counts contained in the indictment against him along with one other unrelated drug possession count and agreed to turn state’s evidence. He was the star witness before a newly-impaneled grand jury that heard evidence and testimony from a total of 45 witnesses in April 2011. In May 2011, that grand jury handed down a superseding 29-count indictment that collectively charged Erwin, Burum, Biane and Kirk with conspiracy relating to the alleged bribery scheme. Erwin was hammered with multiple counts, including receiving a bribe, acting as Burum’s agent, perjury, filing falsified documents and tax evasion. Biane was charged with soliciting and receiving a bribe in exchange for his vote. Kirk was charged with receiving a bribe in exchange for influencing his boss, Ovitt, to vote to approve the settlement. Burum was not charged with bribery. Rather, prosecutors fashioned charges against him that alleged aiding and abetting Postmus, Biane and Kirk in receiving bribes. The defendants were also charged with conflict-of-interest and misappropriating public funds. No substantive counts of extortion were charged in the superseding indictment and the extortion counts against Erwin in the February 2010 indictment were dispensed with, although extortion allegations were wrapped into the broad conspiracy count contained in the May 2011 indictment.
Defense attorneys filed demurrers on behalf of their clients, motions which called into question the legal sufficiency of the charges against the defendants. Cited in those demurrers were the cases of People v. Davis, People vs. Clapp and People vs Wolden, all of which bore upon the inability of prosecutors to charge a defendant with conspiracy or aiding and abetting a crime when that individual stands accused of a crime that necessarily involves the involvement of another individual.
In August 2011, Judge Brian McCarville granted several of the defendants’ demurrers in what has become known as the Colonies Lawsuit Settlement Public Corruption Prosecution, ruling that a defendant such as Burum who was essentially accused of giving bribes cannot also be charged with aiding and abetting the receipt of bribes, and he dismissed all four bribery counts and one of misappropriation of public funds against the Rancho Cucamonga-based developer, leaving only two of the original seven charges against the figure at the center of the case intact. McCarville further dismissed one felony count of misappropriation of public funds for each of the other defendants. The prosecution, consisting of both the California Attorney General’s office and the San Bernardino County District Attorney’s office, appealed McCarville’s ruling to the Fourth District Court of Appeal in Riverside, which in October 2012 upheld McCarville with regard to the four bribery counts against Burum that had been tossed, and also threw out a conflict-of-interest count McCarville had let stand. The appeals court did, however, reinstate the misappropriation of public funds charge against Burum that McCarville had dismissed.
Prosecutors then made a last-minute appeal of the Fourth District’s ruling to the California Supreme Court on December 10, 2012.
The defense teams for Erwin, Biane and Kirk followed in the wake of the legal trail blazed by Burum’s attorney, former U.S. District Court Judge Stephen Larson. It was Larson who had formulated the defense that rested upon the Davis, Clapp and Wolden precedents, which McCarville and later the Forth District Court of Appeal utilized in their respective decisions to eviscerate the prosecution’s case.
In the case of People v. Davis, the court ruled that “the giver and receiver of a bribe are no longer accomplices one to the other.”
The Clapp case, from 1944, pertained to three women accused of involvement in an abortion, which at that time was illegal, and the conviction of the woman on whom the abortion was performed. The court held the woman submitting to an abortion was not punishable as a principal under one section of the penal code because her conduct was prohibited under another section. As such she was deemed not to be an accomplice in the crime of the other parties.
The case of People v. Wolden, which in itself relied upon the precedent of the Clapp Case, related to the case of Russell Wolden, the one-time assessor of San Francisco County who was indicted on 10 counts of accepting bribes and one count of conspiracy to accept bribes. Wolden was convicted on the conspiracy charge and eight counts of accepting bribes. Upon appeal, it was determined that the giver and receiver of a bribe are not guilty of a conspiracy, because the two crimes require different motives or purposes and that the giver of the bribe is not an accomplice in the “separate and distinct crime” of bribe taking.
Moreover, McCarville and the Fourth District Court of Appeal rejected the application of conspiracy statutes to Burum’s action, applying a principle of law that holds that two individuals who are alleged to have engaged in a crime that necessarily involves two parties cannot be charged with conspiracy merely on the basis of that crime having taken place.
Citing Davis, Clapp and Wolden, Stephen Larson, in arguing before California’s highest court, repeated the arguments he had made before the lower courts, stating prosecutors had engaged in “an impermissible charging scheme” that “ignores the legislative history and judicial interpretations.”
The prosecution, arguing on behalf of both the state of California and the county of the San Bernardino, propounded the argument that Burum’s alleged bribery of Postmus, Biane, and Kirk went beyond a simple exchange of money for votes and involved an elaborate set of circumstances involving threats, extortion, and intermediaries acting on Burum’s behalf in addition to the provision of the alleged bribes.
Led by deputy attorney general Melissa Mandel, the prosecution referenced the action of Erwin, who was described in the indictment as Burum’s “agent,” “mule” and “underling,” to propound the theory that his action in having prepared with public relations consultant Patrick O’Reilly, prior to the 2006 election, never-delivered mailers and handbills which dwelled on derogatory information relating to Postmus and Biane, constituted blackmail and extortion that paved the way for the bribes that were delivered to Postmus and Biane after the vote conferring the $102 million settlement on the Colonies Partners. The combination of the bribes, extortion, blackmail and the use of a third party, i.e., Erwin, in this regard, Mandel suggested, constituted a facilitation of the crime that went beyond mere bribery. Burum, she said, utilized his “enormous political power and financial resources to coerce the public officials into accepting his bribes.”
In its review of the matter, the California Supreme Court, composed of Chief Justice Tani Gorre Cantil-Sakauye, and justices Joyce Kennard, Marvin Baxter, Kathryn Mickle Werdegar, and Goodwin Liu, Ming Chin and Carol Corrigan, found other precedent-setting political corruption cases, those of People v. Gonzales and Solis and Calhoun v. Superior Court, to be more relevant than the Davis, Clapp and Wolden cases to the circumstances involved in the Colonies Lawsuit Settlement Public Corruption Prosecution than was presumed by McCarville and the Fourth District Court of Appeal.
“We conclude that the Court of Appeal erred,” Justice Baxter wrote in an opinion with which all of his colleagues concurred. “Although neither the offer nor payment of a bribe in itself can establish that the offeror aided and abetted the separate crime of receiving the same bribe, the status of being the offeror or payor of a bribe does not disqualify that person, as a matter of law, from complicity in the offense of receiving the bribe. Whether the offeror is guilty of aiding and abetting the receipt of the bribe depends on whether there is evidence that, in addition to the offer or payment of the bribe, the offeror ‘with (1) knowledge of the unlawful purpose of the perpetrator; and (2) the intent or purpose of committing, encouraging, or facilitating the commission of the offense, (3) by act or advice aids, promotes, encourages or instigates, the commission of the crime.’ (People v. Gonzales and Solis (2011) 52 Cal.4th 254, 295-296.) Similarly, being the offeror or payor of a bribe does not disqualify that person, as a matter of law, from culpability for participating in a conspiracy to accept that same bribe.”
The ruling further states, “Because the Court of Appeal sustained the demurrer based on its incorrect understanding of the law, we reverse that part of the judgment of the Court of Appeal and remand for further proceedings.”
Deeper within the 21-page opinion, Baxter wrote, “The Court of Appeal held that neither Burum (the offeror of the bribes) nor Erwin (Burum’s agent) could be charged with aiding or abetting the receipt of the bribes. Its conclusion rested on the theory that the offeror of a bribe cannot ‘as a matter of law’ aid and abet another person in receiving the bribe. The Court of Appeal was mistaken. Whether the offeror of a bribe may be charged with aiding and abetting another in the crime of receiving the bribe depends on whether the offeror’s conduct, beyond merely offering or paying a bribe, satisfies the elements of aiding and abetting the receipt of the bribe.”
Baxter shed further light on the court’s reasoning.
“The Court of Appeal’s analysis with respect to the target crimes of bribery in the conspiracy charge was very brief and rested on its erroneous conclusion that defendants, as a matter of law, could not be charged with aiding and abetting the recipients of the bribes. Thus, in the Court of Appeal’s view, Burum’s demurrer should have been sustained as to the target crimes of bribery in the conspiracy charge ‘because the crimes defendant Burum allegedly conspired to commit are ones the law states he cannot commit.’ Similarly, because Erwin could not be charged with aiding and abetting Biane in receiving or accepting bribes, he could not be charged with conspiring to commit those crimes. The sole authority cited was Wolden, which declared that the giver and the receiver of a bribe cannot be ‘guilty of conspiracy, because the two crimes require different motives or purposes.’ This part of Wolden, though, suffers from the same infirmity as the argument rejected in the preceding part that the offeror of a bribe can never aid and abet the receipt of a bribe. Although the giver and receiver of a bribe may have different intents, it is not required, as a matter of law, that they must have different intents. After all, it is well established that an individual may entertain multiple criminal objectives simultaneously.”
Specifically, Baxter wrote, the case of Calhoun v. Superior Court establishes a bribery scheme can entail a conspiracy if it involves enough factors and individuals.
“Indeed, Calhoun v. Superior Court (1955) 46 Cal.2d 18 (Calhoun) sustained a charge of conspiracy in closely analogous circumstances,” the opinion states. “Calhoun, acting on behalf of various wholesale and retail liquor distributors, arranged to use trade association money to donate to the political campaign of a candidate for the Board of Equalization, which issued licenses to sell alcoholic beverages. Although such contributions appeared to be prohibited by Government Code section 5002.6, Calhoun was alleged instead to have conspired with the candidate and others to solicit and receive political contributions from those who were regulated by the Board of Equalization in violation of Elections Code section 5002.5. Calhoun, like defendants here, argued that donors and recipients of contributions could not conspire to commit the same substantive offense as a matter of law, relying on the opinion of this court in denying a petition for hearing in People v. Keyes. Over the objections of a dissenting justice that ‘there can be no conspiracy between the donor and the donee’ and that a conspiracy requires ‘there be a common unlawful motive,’ a majority of this court nonetheless permitted the prosecution to go forward. We rested our decision on the particular facts of the case—i.e., evidence presented to the grand jury of ‘an elaborate conspiracy to utilize contributions from both retail and wholesale liquor licenses to finance [the candidate]’s political campaigns.’ In light of that evidence, we reasoned that a trier of fact could have concluded that Calhoun had ‘a much more intimate participation in [the official]’s campaign than that of one who acted solely as a donor.’
“Here, as in Calhoun, the indictment alleges that Burum and Erwin participated in a conspiracy that was more elaborate than the mere agreement that a particular bribe be accepted, but involved and depended on the conduct of numerous parties to ensure that at least three supervisors be influenced to approve the $102 million litigation settlement,” Baxter wrote. “The Court of Appeal thus erred in ruling that Burum and Erwin, as a matter of law, could not conspire to commit the target bribery offenses. We therefore reverse the order sustaining the demurrer as to these target crimes in count 1 and remand to the Court of Appeal to consider, in the first instance, defendants’ remaining grounds for demurrer.”
Thus, it is now not only possible but probable that Burum will be headed to trial on charges of conspiracy, the aiding and abetting of bribery, and misappropriation of funds.The appellate court’s dismissals of aiding and abetting of a conflict of interest against both Burum and Erwin were upheld by the Supreme Court. Likewise, the conspiracy count and the charges of engaging in a conflict of interest and aiding and abetting Biane in his reception of a bribe that had earlier been dismissed against Erwin, who also faces 15 additional charges, were reinstated.
While the prosecution was savoring the reinstatement of the charges, it yet faces the burden of proving the case in a courtroom. It must also return to the Fourth District Court of Appeal to establish that the allegations in the indictment indeed match the presumption that aiding and abetting of the various crimes alleged actually took place.
Though the California Supreme Court rejected the Fourth District’s reasoning that the alleged offerer of a bribe cannot be charged simultaneously with aiding and abetting in the reception of the same bribe categorically as a matter of law, it sent the matter back to the Fourth District to have that panel determine if the circumstances laid out in the indictment indeed indicate that aiding and abetting took place. If such a determination is made, the aiding and abetting charges will stand. If not, they could again be dismissed.
“We express no opinion as to the validity of other defenses asserted by defendants in their demurrers,” the Supreme Court decision states. “We hold only that, at the demurrer stage, the bribery counts and the related portions of the conspiracy count are not barred as a matter of law merely because the indictment alleges that defendant Burum was the offeror of the bribes or that defendant Erwin acted as Burum’s agent.”
With the pre-trial jousting over the legal sufficiency and appropriate form of the charges now closed, Larson said he is anxious to move to trial, where the focus on the facts of the case will redound to his client’s vindication.
“Unfortunately the Supreme Court was legally required to accept the government’s unfounded and fabricated allegations as true, but we look forward to the case being remanded back to the Superior Court where we can finally present the facts and where we will prevail,” Larson said. “Today’s decision marks the beginning of the end for this politically-motivated prosecution.”
(December 24) The county of San Bernardino has entered into a three-year pilot program with a Northern California-based private company for the operation of the recreation facilities at Lake Gregory Regional Park near Crestline.
For several years the county has been losing money at the park. The deal brokered with California Parks, which will do business in San Bernardino County as Urban Parks Concessionaires, will provide 15 new recreational programs at the park and lay the ground for Urban Parks Concessionaires’ potential long-term or permanent management of the amenity.
According to Keith Lee, the director of the county’s regional parks department, “[T]his 3-year agreement (effective January 1, 2014) with Urban Parks Concessionaires (operator) will provide for outsourcing the daily management and operations of Lake Gregory Regional Park. During this agreement period, the operator will complete a feasibility study to be used as the basis of a business plan for a longer term agreement. The operator will be responsible to staff and operate the park at its expense, and in return will collect and retain all fees and revenues generated by programs/services offered at the park. The operator will also be paid management fees by the department for the first two years, with the department receiving a share of the revenues beginning in the third year.”
Lee told the board of supervisors, “In January 2012, the department released a request for proposal (RFP) for the maintenance and operations of Lake Gregory Regional Park. A pre-bid conference was conducted and eight responsive parties from the local area and Southern California attended. Only two of those parties submitted proposals for final consideration (Rim of the World Recreation and Park District, and Urban Park Concessionaires). An evaluation committee for proposal review was comprised of staff from San Bernardino County Regional Parks administration, [county] public works department, [county] economic development agency, Los Angeles County Parks, Riverside County Parks, Lake Gregory Improvement Committee, and the Crestline Chamber of Commerce. The committee determined that the Urban Park Concessionaires proposal would best meet the county needs. Urban Parks Concessionaires is a corporate division of The California Parks Company. In business since 1975, the company has been partners with local, state and national agencies, providing service in the hospitality management and in operating a variety of recreation-oriented facilities at 22 locations. The corporate headquarters are in Red Bluff, CA with satellite offices in Pleasanton, Hemet, and in Nevada. Key business services they will be able to provide to Lake Gregory include management of the park, retail (including food and beverage), special event and wedding services, recreation, inspection for invasive species and fee collection. The county will initially pay Urban Parks Concessionaires a management fee of $300,000 for the first year and $250,000 for the second year of park operation, with the provision that the county receive revenue in the amount of 10 percent of gross income or $100,000 (whichever is greater) for the third year, and an exclusive option for Urban Parks Concessionaires to enter into a new long-term concession lease prior to December 31, 2016.”
In approving the arrangement, the board of supervisors made a finding that the contract with Urban Park Concessionaires would advance the county’s efforts to “operate in a fiscally-responsible and business-like manner.” Lee said “The recommendation to outsource the park is primarily based on significant actual operating losses experienced over the past fiscal years: a net loss of $798,435 during 2010-11, and a net loss of $632,734 during 2011-12. Executing this park management agreement, will likely result in continued but declining operational losses during the upcoming fiscal years. A net loss of $405,000 is projected for 2014-15, and net loss of $172,000 is projected for 2015-16. A net gain of $36,000 is projected for 2016-17, based on deteminable cost estimates, and revenue growth projections provided by the operator.”
(December 26) Steadily and methodically, the city of Upland appears headed toward bankruptcy, as management in the City of Gracious Living and its newly commissioned panel of advisers appear unable to resolve differences among them with regard to less dramatic options to address the municipality’s budget crisis.
While Upland City Manager Stephen Dunn had hopes of persuading the city council to okay asking city residents to approve a sales tax to generate revenue, support for the taxing alternative is not even tepid among the members of the city’s recently-formed budget advisory task force. Going back for more than a decade, city residents have rejected every taxing proposal previous city councils in Upland placed before the voters.
Dunn appears to be unwilling or perhaps unable to make substantive cuts from this point forward with regard to staff and its accompanying payroll and benefit liability. And a host of other cost-cutting or revenue producing measures Dunn has proposed appear to be insufficient to move the city into the black.
In October, Dunn said his city was on the verge of bankruptcy and after having engaged in a series of fiscal gymnastics to balance the current 2013-14 budget, the city will require at least $3.5 million in additional revenue annually for the next five years to continue to provide city residents and businesses with the same level of service the city is currently providing.
As of October, Dunn said, the city’s general fund is hard-stretched to cover Upland’s bare operating expenses. Funding for street repairs, equipment and vehicle maintenance, post-employment benefits, equipment replacement, economic development and solutions to the city’s growing homeless problem has been entirely depleted.
Its fiscal condition is a blow to Upland’s prestige, which is the second-most affluent of San Bernardino County’s 24 cities, measured by median household income.
The general fund accounts for most of the city’s services. It funds 73 activities related to the basic function of municipal government. Dunn said.
In October, Dunn said that the only alternative to drastic service cutbacks consisted of revenue enhancement, most specifically a tax that would need to be approved by a majority of the city’s voters. To emphasize his point and support his case, Dunn referenced a 2012 auditor’s opinion from the certified public accounting firm Mayer Hoffman and McCann and Standard and Poor’s intended downgrading of the city’s credit rating. Mayer Hoffman and McCann said there are serious questions with regard to the city’s solvency to the point that in a short while “it will be unable to continue as a going concern.” According to Standard and Poor’s, the city, which has already been downgraded from an AA credit rating to an A+, is in danger of seeing its credit rating eroding even further. A municipality’s credit rating directly impacts the interest rate it must pay when borrowing money.
To balance the city’s current $39 million budget, Dunn said Upland’s entire municipal operation is borrowing heavily from rapidly evaporating reserves, while relying on income from two of the city’s enterprise funds which remain in the black, its water and sewer service funds.
The upshot of Dunn’s presentation was to convince the council to consent to placing a tax measure before city voters next year, either on the June primary ballot or during the November general election. The council, however, shied from embracing on its own authority the taxing solution and instead created a budget balancing task force committee, consisting of two members appointed by each council member. The stated intent of the ten-member committee is to examine the full range of means by which the city is to come to terms with its fiscal crisis and then provide recommendations.
Only reluctantly did Dunn accept the formation of the committee and there have already been indications that some of the committee members are strongly in favor in moving in a direction Dunn did not want to go, namely wholesale layoff of staff.
The disagreement over which path the city should take out of the financial abyss is a fundamental one.
One contingent is calling for the city to embark on cost cutting efforts including streamlining and making more efficient its processes and functions and eliminating services and redundant or nonproductive personnel. Another school of thought advocates the city generating revenue to sustain the current level of service, its current payroll and preparing for future retirement obligation costs.
Those seeking firings, layoffs and streamlining maintain City Hall is bloated and manned by a number of employees who have been disloyal to the community and its taxpayers. This is an outgrowth of the expansion of city staff during the first decade of the millennium, as well as concessions made to the city’s employees’ bargaining units during the tenure of former mayor John Pomierski, who was heavily supported by all of the city’s employee unions. Under Pomierski and his hand-picked city manager, Robb Quincey, the city increased salary and benefit packages for employees markedly. Subsequently, Pomierski was indicted by a federal grand jury for his involvement in a political corruption scheme that involved his taking bribes in exchange for using his influence as an elected official to forge backroom deals and arrange favorable outcomes for individuals and businesses with projects or applications being processed at City Hall. Pomierski pleaded guilty and is now serving a sentence in a federal penitentiary. Quincey has been indicted and charged with three felony corruption charges, including unlawful misappropriation of public money, gaining personal benefit from an official contract, and giving false testimony under oath. He has pleaded not guilty and is maintaining his innocence.
This complex of circumstances has led to open expression by some Upland residents that the runaway labor and pension costs that are plaguing Upland are vestiges of the ethos of public trust violations that occurred under Pomierski and Quincey. The implication is that employee contract terms favorable to Upland’s city employees were given to bind those employees to the mayor as part of an understanding and arrangement which allowed Pomierski’s depredations to take place. In plain terms, many believe the generous salary and benefit packages city employees are now getting were provided to those workers because they were willing to look the other way while Pomierski and his cronies enriched themselves. For that reason there is a reluctance on the part of a sizeable contingent of Upland’s residents to impose on themselves any municipal tax that will be used to pay for the perpetuation of generous pensions for retired city employees.
A manifestation of this attitude came in the form of two recommendations by budget task force committee member Robert Nelson, a certified public accountant appointed by councilman Glen Bozar, who suggested that the city impose a hiring freeze and that it freeze wage increases.
Dunn opposed both moves, stating that “The appearance of going to the employees to correct the city’s fiscal position will affect morale, cause better employees to leave, and make it difficult to recruit quality candidates” and “A further reduction in the city workforce will slow response times to our citizens.”
Dunn has also rejected several other recommendations made so far by the task force, including: ending acceptance of stray animals from surrounding communities into Upland’s animal shelter; combining the police and fire department’s dispatch services; selling the city’s cell towers, which currently generate annual revenue of roughly $200,000, for $2.775 million; increasing the rate the city charges to lease its cell towers; selling the fire department’s ladder truck, which is valued at roughly $600,000, for the approximately $50,000 the market will bear; selling Old St. Mark’s Church and the surrounding property it occupies on 18th Street for between $804,000 and $1.263 million; selling Upland’s interest in the Whispering Lakes Golf course for approximately $1 million; asking voters to approve a lighting and landscape maintenance district to generate as much as $2.5 million per year; asking the city’s voters to approve a special parcel tax for public safety, the library or street maintenance; creating new fees for existing city services now rendered for free, generating as much as $380,000 annually; imposing labor concessions on employees; eliminating the city’s quarterly newsletter to provide a savings of $3,000 or simply turning it into a web-based publication; outsourcing the fire department; closing a fire station; eliminating the fire department’s paramedic program; outsourcing the police department; regionalizing the police department by merging with the Ontario or Montclair departments; eliminating the city’s recreation division; eliminating the city library; reducing library hours; and eliminating the city council members’ benefits.
Dunn did, however, recommend considering outsourcing the management of the library; regionalizing fire service through a merger with the Montclair Fire Department; “browning out“ a fire station during times of lesser risk; outsourcing development services; outsourcing fleet maintenance; outsourcing street maintenance; outsourcing engineering services; eliminating the position of the facilities maintenance superintendent; seeking, during labor negotiations, concessions from the city’s employee unions; reworking the city’s contract with Burrtec for trash service; privatizing the management and operation of the city’s water and sewer assets; asking voters to up business license fees; asking voters to approve a half cent sales tax; selling the city-owned parking lot at the southwest corner of C Street and 3rd Avenue; raising water rates; and negotiating the conversion of pension plans with the city’s employee unions.
With little or no prospect that the options Dunn is recommending will make up the $3.5 million in additional annual revenue or operational cost reductions he is seeking, the city appears to be inexorably moving toward exploring, if not outright embracing, a municipal bankruptcy option.
Committee member find daunting the consideration that the state’s public employees’ retirement system will require Upland in the upcoming 2014-15 fiscal year to increase by $1.5 million the $6.5 million it is already currently paying annually into its employees’ pension fund. Actuarial tables show that virtually any increase in revenue the city is likely to experience in the future will not go to increasing or even sustaining services but to covering increases in pension payments. .
The Sentinel has learned that at least four of the budget task force members are entertaining the concept of a city bankruptcy filing. Three others did not appear to flinch when the idea was broached.
One committee member stated that such a filing seemed inevitable, given city management’s inability to rein in current personnel and future retirement costs, which account for nearly 80 percent of the city budget. Another member said a bankruptcy filing would prove “cleansing,” allowing the city to dispense with impediments it has accumulated over the past decade-and-a-half, including commitments made during the Pomierski regime to city labor unions which were the heaviest donors, collectively, to the political campaigns of the city’s council members.
Current municipal bankruptcies, including those in Detroit and San Bernardino, have explored heretofore uncharted fiscal territory, including reducing pension payments to retired employees.
(December 25) YERMO—The long-troubled Yermo Water Company is in the process of being purchased in its entirely by the Apple Valley Ranchos Water Company.
On December 5, Apple Valley Ranchos and Yermo Water, which has been operated by the Yermo Community Services District since November 2012, jointly filed an advice letter to the Public Utilities Commission preparatory to that takeover.
According to the letter, Apple Valley Ranchos intends to “purchase all of the public utility assets owned by Yermo and used by Yermo to provide public utility water service in San Bernardino County, California” and seeks “commission authorization for a transfer of ownership of an inadequately operated and maintained Class D water utility.”
In August 2012 the California Public Utilities Commission filed to take control of the severely undercapitalized and dilapidating water company. Three months later, the Superior Court entrusted operation of the Yermo Water Company to the Yermo Community Services District and appointed California Public Utilities Commission Attorney John Richardson to act as receiver. The Yermo Community Services District has made $40,000 in emergency renovations to the system to keep it functioning.
Last month, Richardson chose Apple Valley Ranchos Water to be the buyer of the company and he petitioned the Public Utilities Commission for a water rate increase.
The Yermo Water Company, formerly owned by Donald Walker, fell into severe disrepair early last decade, a situation which was exacerbated by Walker’s departure to Florida, making it difficult for his company’s customers to contact him.
As the absentee owner, Walker did not have a licensed operator available to operate the system. During the summer of 2006, the primary water tank serving the Yermo community’s water system developed a leak and customers were without water for a week in the small community near Barstow, where temperatures exceeded 100 degrees every day. The California Department of Health and the California Public Utilities Commission initiated an investigation into the matter in 2007.
A decision to pursue the appointment of a receiver was issued in May of 2009. At that time, however, a community-based prospective buyer had surfaced and the receivership was suspended while it appeared that a sale of the system was possible.
After more than two years of negotiations, Walker refused to inform the prospective buyer how much he owed in back taxes and fines to the California Department of Health. As a result, the sale fell through. The receivership arrangement that took place in November 2012 was contested by Walker’s family. His wife, Charlene, filed an opposition to the appointment of a receiver, raising a number of claims that were ultimately denied by the Superior Court on March 6, 2013.
In July, Apple Valley Ranchos bid $300,000 on the purchase of the Yermo Water Company. On the company’s website, Bob Smith, president of the Yermo Community Services District. informed customers of Richardson’s decision to accept Apple Valley Ranchos’ offer, telling them they should have or would soon receive a letter spelling out the particulars, including the proposed rate increase.
(December 23) A first step toward increasing the number of judges in San Bernardino County was taken last week when the California Judicial Council ratified upping the number of new judicial officers in both Riverside and San Bernardino counties by nine judges each.
Far-flung San Bernardino County, the largest such political subdivision in the Lower 48 States at 20,105 square miles, has been particularly hard hit by cutbacks in the state court system, suffering the closures of the Chino courthouse on its southwest extreme, the closure of the Needles courthouse on its northeast end and the Twin Peaks and Big Bear courthouses in its central mountain communities. In addition, operations at the Barstow courthouse have been scaled back to a single courtroom that is open three days a week. There have been consequent case delays and crowded calendars and courtrooms at all the county’s other courthouses.
With its population having now eclipsed 2.1 million, San Bernardino is the second-most judicially understaffed of California’s 58 counties.
An uptick in the number of judges would offset some of that problem, although the nine approved by the Judicial Council would have San Bernardino County, which now has 84 Superior Court judges and commissioners, well short of the number, pegged at 156, deemed appropriate for a county of its size and population. Moreover, even if the nine new judges were to materialize, the county itself would probably need to cover some of the cost of providing the additional courthouse staffing to allow those judges to be functional. Over the last six years, court staff in the county has been severely downscaled.
While the Judicial Council made the recommendation, it does not have budgetary appropriation authority to actually put those recommendations into actuality. The state legislature would have to free up the funding for the judge expansion. And though it is arguably the most needy of the state’s counties, San Bernardino County is but one of dozens lagging with regard to adequate criminal and civil court resources.
Providing a new judge is an expensive proposition, entailing costs of over a million dollars per year. The cost of a judgeship entails the $181,292 in salary each is paid by the state, plus clerks, secretaries and bailiffs, representing a total package, once established of at least $950,000 per year. The start-up cost for the first year is considerably higher, around $1.65 million.
In addition, several counties, including San Bernardino County, supplement judges’ pay with stipends. In San Bernardino County, that add-on runs to $20,000 per year. That practice has come under severe criticism, including charges that it compromises the integrity of the judges, who often hear cases in which the county is a plaintiff or a defendant.
The legislature, which several years ago committed to a program of expanding judges throughout the state but reneged on that about one third of the way through the process when funding dried up, will need to approve the financing of the Judicial Council’s request, which it titled its “2014 Legislative Priority.”
(December 24) Two Chino landowners are undertaking a petition drive to have the city rezone eight parcels on 29.6 acres south of Francis Avenue between Benson and Vernon avenues from their current low density residential use to a much more intensive residential land use designation that would allow for up to eight homes per acre.
Ron “Yogi” Brewer of 11915 Vernon Avenue and Matt Evans of 11867 Vernon Avenue are asking the city’s planning division to change the current single family residential (RD1) land use designation, which calls for one unit per acre, to single-family (RD8) allowance, which provides for up to eight units per acre.
Chino, which historically was an agricultural community, has transformed itself into a suburban municipality, but it yet contains a few hundred acres where the distinction between residential and equestrian as well as residential and commercial agricultural uses is blurred. The properties in question have zoning that currently allows horses to be kept there.
Brewer and Evans’ stated rationale in asking for the zone change is that the equestrian uses associated with the current zoning designations on the property have fallen out of favor with many of the nearby non-agricultural residential neighborhoods.
Maintaining that the property has become unsuitable for livestock or horses, Brewer and Evans are seeking the requisite signatures of 10 percent of Chino’s registered voters – in excess of 3,200 – to place a measure on next year’s ballot calling for higher density single family homes on the acreage than is permitted there now. Such a change, they claim, will eliminate unpleasant animal odors, flies and unanchored soil that results in dust.
While Brewer and Evans have stated that the rezoning they seek would guarantee high quality homes are constructed and that they are not asking the city to allow them to construct apartments, some opposition to their agenda has formed, including that of former mayor and current Chino councilwoman Eunice Ulloa.
Some of those in opposition to the zone change claim Brewer and Evans are actually trying to manipulate the city’s zoning code to engineer a quadrupling in the value of the property.
By clicking on the following portal, you can access a copy of this week’s paper.
(December 19) Over the objections of a contingent of Upland residents, the Montclair and Upland city councils on December 16 embarked on what has been touted as the wave of the future for local governmental jurisdictions when they separately approved the consolidation of their respective city’s fire administrations.
“We are setting the model,” Montclair Councilman Bill Ruh proudly proclaimed.
Across the city limits in Upland, a handful of residents and business interests and one dissenting city council member expressed concern that the merger was one that benefited its smaller neighbor far more than it did the City of Gracious Living, which under the terms of the agreement would be essentially subsidizing a portion of Montclair’s public safety services.
Upland, the second most affluent of San Bernardino County’s cities as measured by median household income, pays its firefighters higher wages and provides slightly better benefits than Montclair firemen receive.
A previously contemplated accompanying dissolution of the service boundaries between the two agencies will be postponed until July 1, Montclair City Manager Edward Starr said.
The cities will split the compensation for Upland Fire Chief Rick Mayhew and a fire marshal, who will likewise devote his work week between the neighboring cities.73,732-population Upland, which heretofore employed 36 fulltime firefighters staged out of four fire stations will cover 67 percent of the cost of employing Mayhew and the fire marshal. 36,664-poulation Montclair, which now fields 24 firefighters operating out of two fire stations, will pick up 33 percent of those salaries.
Also subject to the merger will be battalion commanders sufficient to cover each station in both cities, augmented by a central administrative staff consisting of an executive assistant, a clerk and secretary.
Not subject to the merger will be two deputy fire chiefs, one for each city.
For the time being, each department will maintain its own identity and retain responsibility for its own firefighters below the command level. The two-year pilot program is being undertaken at this time, with the stated intention of merging the departments entirely down the road. According to Starr, the Upland firefighters will remain Upland city employees and the Montclair firemen will remain as Montclair city employees. In Montclair, the merger was particularly well-received.
As a result of the state of California’s shuttering of municipal redevelopment agencies throughout the state, toward the end of the 2010-11 fiscal year, Montclair laid off 10 employees as part of its effort to make up for its loss of redevelopment money. Throughout much of 2010-11, one of the Montclair Fire Department’s paramedic units was parked and the city’s paramedics functioned from the department’s remaining engines, which stayed in service. Over the last year-and-a-half, what was a 27-firefighter department has lost three positions to attrition, and has not filled those vacancies, making up for the manpower shortage with overtime. In September 2012, Starr, in a cost-cutting move that saved the city a third of a million dollars a year in wages and benefits, elevated police chief Keith Jones to the position of director of public safety and gave fire chief Troy Ament his two-week severance notice. In June of this year, police captain Michael deMoet was appointed to the position of director of public safety, following Jones’ retirement. de Moet will continue to function in the role of Montclair fire chief until the merger becomes effective, likely next month.
Starr projected that Montclair will realize $476,170 in operating cost savings as a result of the merger. The agreement will not result in any further layoffs of firefighters, Starr said, but the department will from this point get by without filling any of its vacant slots. Starr said the merger will also assist his city’s fire department in reducing overtime costs.
Unlike Montclair, which has been engaging in a drawdown of its service, the Upland Fire Department has been intensifying its level of service, including maintaining, over the past four years, an air ambulance, consisting of a paramedic team stationed aboard a helicopter based at Cable Airport. That enhanced level of service may in part explicate the discrepancy between the $476,179 in savings Montclair is to yield by the merger in comparison to the $156,000 in savings Upland is projected to see.
While there was marked enthusiasm for the limited merger of the two departments in Upland, where the city will likely see, according to city manager Stephen Dunn and Mayhew, $156,000 in savings, the approval of the consolidation, or at least its timing, was not unanimous as it was in Montclair.
The merger was opposed by one city councilman, the chairman of the council advisory committee and a prominent city businessman. City councilman Glen Bozar cited salary increases to management staff and resultant future pension benefit costs as a major factor in his opposition.
“There is no true savings in this,” Bozar said. “This is savings on paper only. This is not reducing our current operating expenses. Not enough scrutiny was given to this 42-page document before the council gave the mayor authority to sign it, locking ourselves into an agreement with our neighboring city we cannot walk away from. Montclair previously made substantial layoffs in its fire department. How did those vacancies there come to be? They did not fill those because of budgetary problems.“
Bozar continued, “This agreement is going to expand the administration of the fire department. Our fire chief and three of our guys are going to get very generous salary increases out of this. Where are we going to come up with the money to give all these raises? No one on the council was informed of what the chief’s salary will be or where this is going to land in terms of the increases in our public employee retirement system costs for the fire chief and at least two others. This does nothing with regard to our ongoing issues with the budget. This does nothing to control costs. Figures available from the state controller’s office show that as a city we have 12 people on our payroll who are making more than the governor of California. That was as of 2012. This does not alleviate that and now we are going to be on the hook for additional public employee retirement benefits.“
Tom Mitchell, the chairman of the Upland City Council Advisory Commission, told the Sentinel, “One of the things I had difficulty on was the creation of the two assistant chiefs positions and the creation of a third position. I was given a response to indicate there would actually be elimination of two existing command positions so that matter was resolved. Another problem, I thought, was the long term nature of this and were we entering into a two-year commitment we would not be able to get out of if problems developed. It was stated that either city can terminate this with six months notice, so that was resolved. The one issue that for me remains unresolved is what we are taking on by the promotions of our battalion chiefs who will be getting a $20,000 per year pay increase. This could only make worse the situation with regard to our pension requirements. Our responsibility to the state pension fund already is an unfunded liability that we have not resolved. Under the current retirement formula, firefighters can retire at 55 and be eligible for a pension. There is a multiplier of three percent times the number of years worked, so at 55, a battalion chief who has been with the city for thirty years can retire and be eligible for 90 percent of his pay. We are already under the gun and unable to keep up or barely keep up with our pension fund payments. An increase of $20,000 per year for each of these battalion chiefs means $18,000 a year more when they retire. I don’t think we can afford that.
“I just wanted to make sure that the city council looked at this all the way around before moving forward with it,” Mitchell said.
Albert Pattison, a resident, businessman and major property owner in Upland, expressed concern that the council’s action might be counterproductive and premature.
Pattison said the city had not publicly released a cost analysis of the consolidation, saying he wanted the public and the council to see a side-by-side accounting of the number of fire department command positions currently and what those employees receive in salary and benefits and the city’s total costs in employing fire department commanders after the merger. Noting that the city’s budget management task force is currently considering the city’s revenue enhancing and cost cutting options, Pattison said the council’s commitment to the command level staffing numbers contained in the merger agreement with Montclair did not allow the task force to bring forth proposals related to eliminating battalion chiefs within what might be considered to be a top-heavy department. We did not give the committee, which is composed of top-tier business people and residents of our city, an opportunity to weigh in on this.”
“What it boils down to,” Pattison said, “is they have given us razzle-dazzle, not facts. There has been no disclosure to the public on the detail needed to analyze this thoroughly. They have not divulged what is actually in the contract. I have not seen the contract and neither has anyone else. They have not given this process enough time. They rushed it through before the specially-appointed budget committee had time to consider it. There has been a totally inadequate discussion of how this will impact the financial stability of the city. Montclair is going to realize savings of $470,000 on this and Upland is going to supposedly see a $156,000 reduction. But Upland is putting two-thirds of the horsepower into this and Montclair is providing one third. I’m not sure there is a cost-benefit equity in this deal. This was not put on the budget task force’s agenda and now that the council has ratified the agreement, it is another element that will contribute to the confusion and retard the city’s ability to deal with its financial challenges.”
(December 14) Furthering its reputation as the most upscale and exclusive of San Bernardino County’s 24 incorporated cities, Chino Hills last week consented to the creation of yet another gated community within its 44.7-square mile confines.
Located in the extreme southwest corner of San Bernardino County and nestled against Riverside County to the south, Orange County to its southwest and Los Angeles County to its northwest, the 74,799 population city boasts the highest median income and highest household median income among all cities in the county.
The gate is to be located at the entrance to the neighborhood on Summer Canyon Road at Canyon Hills Road, north of Carbon Canyon Road.
This week, Irvine-based Forester Canyon Hills had its plan to set off the 76 homes it has developed on Summer Canyon Road, Spring Oak Way Rock Vista Lane Viewcrest Road Hawk Canyon Road, Feather Hollow Court, Flint Hollow Place, Canyon Glen Road, and Rock Ridge Way as a gated community which will be accessible only to the residents of the neighborhood and public safety personnel.
According to findings first made by the planning commission in October and confirmed by the city council this week, the vacation of those roads as public thoroughfares is consistent with the Chino Hills General Plan and exempt from environmental review as a minor alteration to land under the California Environmental Quality Act.
Vacating the streets for public roadway purposes, according to a city document “is a benefit to the public because the city will not be responsible for the maintenance and liability costs associated with such roads.”
As such maintenance of the streets will now be the responsibility of a private homeowners association.
According to the city, “The gate will make it a well defined neighborhood. The surrounding land and homeowners met design review and access standards.”
To ensure emergency response to the area is not interrupted the fire department will be provided with a key system consisting of switch overide capability. The city also said the proponents of the gated community met minimum setback requirements on structures and provided a 40-foot radius turnaround on the roadway to ensure unrestricted access from the gate area. Putting in the gate, the city said, “won’t inhibit the general public from access to parks and other public facilities.”