SEC Intensifying, Widening Probe Into Victorville’s Finances

The Securities and Exchange Commission is intensifying its now 18-month long inquiry into accusations of fraud and misuse of bond money by the city of Victorville and its former redevelopment agency.
In August 2010, the SEC launched an investigation of Victorville’s various bond offerings totaling more than $475 million. In complying with subpoenas, city officials have provided over 70,000 pages of documentation relating to representations to bond holders and how the bond money was actually spent.
On February 9, 2012 the SEC requested even more documentation from Victorville, widening its inquiry into the issuance of more than $700 million in bonds.
It is known that proceeds from bonds issued for redevelopment purposes as well as the civilian makeover of the former George Air Force Base into the Southern California Logistics Airport were diverted to other purposes. Moreover, Victorville has engaged in a host of questionable financial practices exacerbated by accounting irregularities, leading to other investigations by the FBI, the county grand jury and the district attorney’s office.
An audit by the accounting firm of Mayer Hoffman McCann released in March of 2011 indicated “substantial doubt about the city’s ability to continue as a going concern.”  Mayer Hoffman McCann questioned whether Victorville can remain solvent, and uncovered tens of millions of dollars in internal loans that were never approved, three funds that were $180 million in the hole and dwindling cash reserves. Mayer Hoffman McCann said that as of March 2011 the city’s utility fund was $78 million upside down and that cash in the water district had dropped from $15 million in 2009 to $8 million as of June 30, 2010 despite a $20 million loan made to the district from the Southern California Logistics Airport Authority.
In 2004, the city earnestly set about to construct the Foxborough power station on east Nisquali Road. City officials confidently predicted that for $22 million to be appropriated out of the redevelopment agency budget they could build a 14-megawatt capacity electrical generating plant that would bypass the state power grid.
The Foxborough project failed to meet its April 2006 target opening date and in October 2006, construction on the project, the price tag for which had escalated to over $54 million, was abruptly halted.
After the city restarted work on the project there were further construction delays and cost escalations as changes in state law went into effect that mandated that at least 20 percent of all energy produced in California by 2010 come from renewable sources. In an effort to comply with that standard, the city jettisoned earlier plans for gas-fired combustion turbines, the pricey components for which were already purchased.
The city then found itself in the position of having to buy even more costly generators capable of running on biodiesel, while looking for purchasers of the never utilized gas turbines. That obsolete equipment had to be sold at a fire sale price because it was considered “used.”
The hemorrhaging of red ink on the project  increased each year thereafter, such that it had reached an annual operating  deficit of  $8 million by fiscal 2007-08.  In 2007, the city began borrowing from its general fund to shore up the project.
With good money being thrown after bad, the city council, as quietly as it could get away with, issued $90 million in bonds to cover the entire cost of Foxborough.
In April 2008, all of the bond money had been eaten up by the Foxborough power plant project and another $5 million beyond that was consumed, bringing the total cost on the facility to $95 million even before the facility’s permanent turbines had begun to generate electricity. Further insult was wrought when city officials, attempting to salvage something from the debacle, declared their intention to connect the plant to the state power grid, in absolute contravention to the original intent for the plant, which was to bypass the grid, thereby avoiding the surcharge the state levies on electricity carried over the system, to provide low-cost energy to attract industry and jobs to the city’s industrial parks.
Eight years after the project was undertaken, the city has failed to see that project through to fruition and the city council abandoned it altogether last year, after having sunk $126 million into the project.
The city was simultaneously pursuing the development of another, much larger power plant, dubbed Victorville 2. The city was assisted in developing that plant by Newport Beach-based Inland Energy, which had successfully developed the 830-megawatt High Desert Power Plant with Baltimore-based Constellation Energy Group a decade ago. The High Desert Power Plant is now referred to as Victorville 1.  Inland Energy had also served as a consultant with regard to the development of the Foxborough plant, receiving more than $5 million for that work.
In November 2007 the Victorville city council authorized a $173 million purchase of natural gas-fired turbines from General Electric for the 563-megawatt Victorville 2 plant.
The city, which owed $126 million to General Electric for equipment for the Victorville 2 power project, fell into arrears on its payments to General Electric and in May of 2010, simply surrendered a $50 million deposit it had made with the company for components. The Victorville 2 project was originally scheduled to include a 513-megawatt natural gas-fired generating plant on 133 acres coupled with an adjohining 250-acre solar power field capable of producing 50 megawatts of electricity. The solar component of the project has since been entirely abandoned and the remainder of Victorville 2 shelved, although in recent months some discussion has taken place between the city and Massachusetts-based QGEN about that company taking on the completion of the project.
More than $80 million of the $300 million in outstanding bonds floated specifically for airport operations actually funded city of Victorville operations or projects off Southern California Logistics Airport property, including $1.8 million utilized to acquire land for a city library. According to Mayer Hoffman McCann, at least $21.8 million was not spent in accordance with the bond covenants. Other airport money was used to further work on the Victorville 2 power plant. The city also loaned $20 million in 2007 airport bond proceeds to the water district to help build a wastewater treatment plant. Those expenditures were made without informing or getting the consent of the bonds’ insurer, Radian.
The Southern California Logistics Airport Authority (SCLAA) has accumulated debt of  $102 million, twice the burden  it had in 2009-10.
One issue repeatedly raised by Mayer Hoffman McCann is that staff has not properly documented and sought city council approval for its numerous interfund loans. The city had nearly $90 million in outstanding interfund loans as of last June. But only $30 million in loans had been formally approved by the council, according to the audit report.
For example, the report states staff did not properly document $20 million loaned between the city’s development impact fee funds, representing the city’s road developer impact fee account as having more than $20 million cash when essentially all of that money was spent through the public buildings developer impact fee account to construct City Hall and Green Tree Clubhouse.
And when SCLAA ended 2009-10 with an $11 million cash overdraft, the audit report states Victorville brought the cash balance to zero by borrowing money “for a term greater than one year” from its solid waste, rail authority and storm drain and street lighting funds. The city’s redevelopment authority, which was decommissioned by state action last year, also loaned the airport more than $11 million to keep the fund afloat.
The depth and breadth of the grand jury’s probe of Victorville is substantial. At the end of the 2009-10 grand jury term in June 2010, six of the grand jury’s members were requested to remain in place to serve on the 2010-11 grand jury for the purpose of completing that investigation. In the spring of 2011, the grand jury questioned then-city manager Jim Cox; former city deputy city manager and now city manager Doug Robertson; economic development director Keith Metzler; city attorney Andre de Bortnowsky and deputy city attorney Joan Stevens Smyth. The 2011-12 Grand Jury has continued the inquest into Victorville’s finances.
The FBI has been investigating Victorville since 2010. In October 2011,  word leaked out that a special task force devoted to Victorville operations involving FBI agents and investigators from the district attorney’s office had formed and that a number of grand jury members who had served in the 2009-10 and 2010-11 terms had been sworn in as special task force members.
City officials have denied any untoward activity and explained away a portion of the multimillion losses sustained in the running of the utility division as a consequence of unforeseen state environmental regulations that went into effect after the city had committed to the project and purchased the gas turbines, entailing costly design changes.  The city claims that many of the expenditures of proceeds from bond money issued for improvements at the airport which provided infrastructure outside the airport, such as the wastewater treatment facility, will serve the airport property.
Robertson said he and city staff are now working to comply with the SEC’s subpoenas

Another Safety Academy Faux Pas

Even as its board members undertook to redress serious shortcomings and challenges that are threatening to bring the Public Safety Academy to ruin, the headlong rush to institute reforms at the school resulted in yet another wave of adverse publicity last week.
In this case, the controversy arose out of the charter school board’s failure to conduct a fully  open public venue in choosing a new administrator.
Last week, the board of the Public Safety Academy quietly tapped one of its own members, Peggi Hazlett, to serve as its executive director.  Hazlett, who was a special assistant to San Bernardino Mayor Pat Morris and a special assistant to Morris’s mayoral predecessor Judith Valles, abruptly resigned from her position with the city of San Bernardino to take on the position with the charter school. The announcement of her hiring, which is effective March 1, touted Hazlett as the charter school’s “new CEO.” But in the brouhaha that ensued, even one of Hazlett’s supporter’s stated that she was not qualified to be chief executive officer.  Moreover, one member of the board publicly claimed to have been blindsided by Hazlett’s elevation. And as word of the matter spread, there were suggestions that there was a conflict of interest inherent in a board member being appointed by the board to a paying position with the charter school.  That fed recurrent charges that the Public Safety Academy, like some other charter schools in California, is more focused on enriching its operators than educating students.

Peggi Hazlett

The California Education Code provides for the formation of charter schools under the aegis of a sponsoring local school district. Charter schools function outside the normal parameters of normal schools and can offer a curriculum and educational smorgasbord unavailable in traditional public schools while meeting the requirements of both special needs students and accelerated scholars.
The Public Safety Academy fell short of both educational and accounting goals over the several years of its operation, then plunged into chaos last year, resulting in lawsuits that now may end up costing its sponsoring district hundreds of thousands or perhaps even millions of dollars.
What was to become the Public Safety Academy was founded as an unaccredited educational seminar in 2000 by Michael Dickinson, a one-time arson investigator, to prepare its attendees for careers in law enforcement and firefighting. In 2005, the school was given accreditation when Dickinson convinced the San Bernardino City Unified School District to charter the school as the Public Safety Academy. The academy appeared to have found a niche, with students intent on pursuing a career in fire science or law enforcement, as well as parents wishing to steer their children in that direction.  A number of local luminaries in those fields participated in the school as instructors, sponsors, mentors, and board members.
But the academy, which has its campus at the former Norton Air Force Base, encountered difficulties along the way. Four years ago a financial review revealed the school had not kept accurate payroll and accounting records, and had spent $164,000 that was not budgeted for. There were also questions about $20,000 worth of expenditures for laptops that were either never delivered, misappropriated or stolen.  In January of last year, a report commissioned by the district found the academy’s accounting practices deficient and cataloged arrearages with regard to accounts payable.
Last spring, Michael Dickinson’s wife who served as a principal at one of the school’s campuses, Susan Dickinson, fell under the charter school board’s focus after a report surfaced that she had crossed the line in prepping her students for questions contained in the state’s Standardized Testing and Reporting exam. According to an inquiry into the matter, Susan Dickinson reviewed some of the material contained in the test with students at her school before the test was administered and recommended that other instructors at the academy do likewise.
The charter school’s  principal, Kathy Toy, had recommended that the board of trustees terminate Susan Dickinson. Before that vote took place, Michael Dickinson sacked the board of trustees.
On June 20, 2011 the Public Safety Academy board, led by Hazlett, filed suit against Public Safety Academy Inc., an adjunct to the academy which was set up and controlled by Michael Dickinson, who received $121,000 per year in salary for his services. That suit sought to restore the authority of the board that Michael Dickinson had terminated. In July, the court ruled that the board had legal authority to run the charter academy, and the contracts of Michael Dickinson, as the chief executive officer, and Dickinson’s hand-picked chief financial officer, Mike Davis, who was paid $120,000 per year, were terminated.
Subsequently, the district was sued by the parents of one of its students, a 16-year-old girl. In that suit, it is alleged that the girl, who was then 15 years old, had repeated sexual encounters with San Bernardino County sheriff’s deputy Nathan Gastineau, who was the girl’s mentor in her Police Explorer Scout activity coordinated at the academy. According to that suit, another student in October 2010 reported to officials at the Public Safety Academy an inappropriate relationship existed between the girl and Gastineau. A teacher told the principal at the school, who did not contact authorities, the lawsuit alleges. Depending on the outcome of the case, the San Bernardino City Unified School District, which chartered the Public Safety Academy, could be on the hook for millions of dollars.
In recent months, the Public Safety Academy has scrambled to maintain its existence. In that way, the board for the charter school has been looking for a dynamic leader to function as CEO. At its February 8 meeting, the board, during the absence of one of its members, San Bernardino Fire Chief Michael Conrad, took what was deemed by the members of the board present as an emergency action that appointed one of their own – Hazlett – as the top administrator of the charter school. The appointment was not previously agendized. In making the appointment, the board said the appointment of someone qualified to oversee the charter academy was paramount.  Hazlett, who in addition to serving as assistant to Morris and Valles over the past decade was an environmental projects assistant with the city of San Bernardino prior to that and was also the chief financial officer, administrator and instructor at the Dikaios Christian Academy in San Bernardino from July 1994 to July 1996, was deemed by the board to be qualified to serve as charter academy CEO.  Hazlett has some college coursework in public administration at San Bernardino Valley College, but no college degree.
Upon learning of her appointment after the fact, Conrad went public with statements to the effect that he disapproved of the process by which Hazlett had been elevated from the non-paying board of directors to the paid position of chief executive, in which Michael Dickinson was paid $121,000 per year. He said he had heard no previous discussion of Hazlett’s appointment to the post whatsoever.
Upon getting the paying position with the charter academy, Hazlett resigned from her post as Morris’s special assistant.
Under fire for the surprise appointment and Hazlett’s thin academic credentials, board members seemed to lose their footing. Richard Lawhead, who is a lieutenant with the San Bernardino Police Department and the board president, while defending Hazlett as right for the job, acknowledged that she likely lacked the qualifications to serve as the CEO of an academic institution.
On February 20, the board came together to smooth out the rough edges and do some damage control and public relations work. Hazlett, it was publicly disclosed, will be given the title of executive director rather than chief executive officer. Her area of responsibility will be to oversee the academy’s daily operations, finances and business affairs on an interim basis.
She will remain in that position at least until the end of June.  There will be further consideration of who will fill the position on a permanent basis. Hazlett indicated she will compete against any others who apply for the job.
While Conrad on February 20 complained about a lack of transparency in the events leading up to Hazlett’s appointment and indicated he believed the board should have conducted a more open, public and extensive search before making the appointment, he said he was now prepared to have the charter academy move forward with Hazlett in the executive director role. Conrad said he felt Hazlett was qualified to hold the position on a temporary or interim basis, but that he wanted to see a competitive process conducted to find a CEO in which candidate qualifications are clearly specified.
Hazlett will replace Toy, who has been functioning as principal and academy director for more than six months.
Hazlett is and will remain a board member until March 1, at which time she will resign to take on the paying position. The board has agreed to appoint Elizabeth Cruz, who has a child attending the academy, to Hazlett’s vacant position on the board.

Ex-Colton PD Chief’s Wrongful Termination Suit Headed To Trial

Both the city of Colton and its former police chief, Ken Rulon, are in the final stages of preparation as Rulon’s wrongful termination suit over his April 2007 firing heads to trial February 27.

Ken Rulon

Rulon, who was provided with a $132,000 base salary and more than $60,000 in benefits,  is seeking $10 million for wrongful termination, defamation, damage to his reputation and harm to his current and future earning potential because of the city’s actions. He maintains that he was fired because he had acted as a whistleblower by sending a report pertaining to an embezzlement of public money by a former city council member and dereliction on the part of other city officials to the district attorney’s office.
City officials contend  the oftentimes abrasive police chief’s dictatorial management style was an impediment to the smooth function of the police department and the city was acting within the scope of its authority when it sacked him.
At the basis of the firing and resultant lawsuit is the action of former city councilman Ramon Hernandez and a series of charges made against his city issued credit card. Those cards are issued to certain senior city officials in Colton, including the mayor and city council members, to cover the cost of doing official business, such as traveling to or attending conferences, conventions, seminars or intergovernmental functions.
On December 22, 2004, a $98.91 charge was logged on Hernandez’s city credit card for an overnight stay at the Amerihost Inn in Fontana, less than ten miles from Hernandez’s home. Hernandez reimbursed the city for the bill. In May, June and July 2005, Hernandez made a spate of charges against his city issued credit card totaling $2,928 at a variety of hotels and motels in the Inland Valley area. In late May 2005, Hernandez told then-city manager Daryl Parrish and then-mayor Deirdre Bennett that he believed the card had been stolen by his nephew. Hernandez pledged to recover the card and see that the city was reimbursed for the charges. No police report was taken. Nor was the credit card cancelled.  Beginning on June 11, 2005, unauthorized calls on Hernandez’s city issued cell phone began, mostly to phone sex lines, consisting of adults-only chat lines based in Iowa, Northern California and Riverside. Hernandez claimed that his cell phone had been “cloned.” For a time the unauthorized calls from his number ceased but between January and May of 2006 the calls resumed, entailing charges of $675. Also between April 20 and June 3, 2006, Hernandez ran up another $1,854 in charges against his city-issued credit card for local hotel rooms.

Ramon Hernandez

The full council was not informed of the unauthorized activity on Hernandez’s credit card. Rather, according to Bennett, she was initially informed about the matter by Parrish in May 2005, who assured her the matter would be handled discreetly and expeditiously. She said Parrish provided her with an assurance at that time that the unauthorized billings would not occur again. When she learned early in 2006 that the unauthorized charges against Hernandez’s credit card were continuing, she said she asked Parrish for a full accounting of the matter and the charges to that date against Hernandez’s city credit and phone accounts. She said Parrish again assured her that the matter would be resolved and counseled against bringing the police department into the matter. Parrish advised her against withholding payment on the credit and phone bills to avoid damaging the city’s credit rating and she accordingly signed off on the expenses under her authority as mayor without the remainder of the council, with the exception of then-councilman John Mitchell, being informed. Mitchell, who was also Colton’s mayor pro tem, on one occasion signed off on the city’s payment of the credit card bills, as did Parrish.  Bennett said Parrish told her reimbursement of the bills from Hernandez would be forthcoming.
Over the next several months, however, Hernandez made no payment to the city and on June 7 the city’s finance department cancelled his credit card.
On June 20, Rulon learned of the unauthorized charges against Hernandez’s credit card and initiated an investigation of the matter. Later that day, just before that evening’s city council meeting commenced, Mitchell used his personal credit card to reimburse the city for the $5,457 outstanding against Hernandez’s city-issued credit card. Hernandez would later claim he repaid Mitchell after the meeting concluded. A week later, on June 27, Rulon questioned Hernandez about the credit card billings. Rulon phoned the public integrity unit of the San Bernardino County district attorney’s office to provide a tentative synopsis of his findings, and forwarded his report of the alleged embezzlement and the delay in city administrators’ handling of the issue to the head of the public integrity unit, Frank Vanella, sometime thereafter.
On August 18, 2006, district attorney’s investigators obtained warrants to search Hernandez’s City Hall office and home, where they seized two computers, a BlackBerry and documents. On August 24, 2006 Hernandez was arrested at his home and booked into Central Detention Center in San Bernardino on 24 felony counts under California Penal Code Section 424 related to the misappropriation of public funds stemming from the improper use of his city credit card and cell phone.
In the weeks thereafter, the public integrity unit was reported to be looking into whether other Colton city officials had acted illegally in assisting Hernandez or delaying or obstructing an investigation into his action.
In October 2006, Parrish without city council authorization hired an outside investigator to look into accusations made against Rulon in anonymous letters delivered to City Hall. The letters alleged Rulon had misused his authority and was creating a hostile work environment within the police department. One letter reported Rulon bought an ATV and a motorcycle from Quaid Harley-Davidson in Loma Linda while in his police uniform and on duty; had imposed citation and arrest quotas on Colton police officers that were charted on a bulletin board on a wall at the police department headquarters and that he had not promoted deserving Latino officers, creating morale problems that prompted some officers to leave the department for positions elsewhere. Rulon was also accused of sexually harassing female employees.

Daryl Parrish

In March 2007, while the investigation commissioned by Parrish was yet to conclude, the Colton Police Officers’ Association cast an 85-6 vote of no-confidence against Rulon, questioning his ability to lead the department. On March 6, 2007 Parrish put Rulon on paid administrative leave. A month later, Rulon was terminated.
In his lawsuit, Rulon is represented by attorneys Bradley Gage and Virginia Keeny. They maintain that the city had no grounds to fire the police chief and that he was shown the door because he had informed the district attorney’s office of the matter involving Hernandez and the apparent effort of Parrish and others to cover the embezzlement up.
They maintain that Rulon undertook to investigate the embezzlement and inform the district attorney against the wishes of other city officials. Rulon prepared a statement relating to the case but before it was released, according to Keeny, Parrish commandeered that statement, tore it up and issued another self serving version of events that credited City Hall rather than the police department with undertaking an aggressive accounting of Hernandez’s actions.
Rulon maintains that City Hall, and Parrish in particular, discouraged and resisted the matter being taken up by prosecutors. Rulon is counting on Vanella testifying on his behalf to the effect that it was Rulon who brought the matter to the district attorney’s office’s attention.  Keeny further believes she can demonstrate that Parrish defamed Rulon when he stated to a reporter that Rulon was a “psychopathic megalomaniac,” was otherwise mentally unstable and that he was incapable of maintaining authority over the officers in his department.
In this way, lawyers for both the city and Rulon are likely to reference an event that occurred after Rulon was terminated from Colton. In July 2010, then-interim Montebello city administrator  Randy Narramore hired Rulon to serve as Montebello’s police chief to permanently replace previous Montebello police chief Dan Weast, who resigned under pressure in January 2010 after 13 officers with that department filed a lawsuit against Weast in 2009, accusing him of retaliation and cronyism. Narramore, who was chief of police in Huntington Park from 1995 until 2006, had supervised Rulon for eight years. Rulon was on the Huntington Park police force from 1986 until he left to become police chief in Colton in 2003. Narramore, who went on to a career in municipal administration after he retired as a law enforcement officer, served as Montebello’s interim city administrator from April 2007 to January 2008 and was brought back as Montebello’s interim city administrator in December 2009. A month later, following Weast’s departure, the Montebello city council saw fit to allow him to serve in the dual capacity of city administrator and police chief. But Narramore’s move to hire Rulon six months later proved disastrous. Rulon lasted only two days as police chief in Montebello before a firestorm of controversy erupted, based in large measure upon his forced exodus from Colton and the vote of no confidence by the police union there. Rulon was sent packing from Montebello 48 hours after he arrived, despite Narramore’s claim that Rulon was chosen from a field of 47 candidates by Bob Murray and Associates, a search firm hired to recruit for the position. Narramore then fell victim to his selection of Rulon and was forced to resign as interim city administrator for having engaged in cronyism for hiring his former underling.
While Colton’s lawyers are likely to point to the debacle in Montebello as evidence that other municipal officials see Rulon’s leadership credentials as questionable, Keeny is intent on portraying Rulon’s forced departure from there before he had an opportunity to demonstrate his proficiency as a police chief as an outgrowth of the damage that was done to Rulon’s reputation and professional standing in Colton. Rulon has not been successful in finding other work in law enforcement and now supports himself with work as a licensed private investigator.
Keeny maintains material in the possession of the San Bernardino County district attorney’s office will establish that Rulon submitted evidence to prosecutors indicating Parrish was attempting to bury details pertaining to Hernandez’s misappropriations. Ultimately, the case came to a conclusion in January 2008, when Hernandez pleaded guilty to 24 charges of misuse of public funds. Because Rulan reported the matter to the DA’s office, Keeny maintains, Parrish retaliated against him.
In the city’s defense, attorney John Higginbotham is prepared to show that Rulon’s contract clearly and unequivocally stated that he could be fired without cause at any time for any reason and that he served at the sole discretion of the city manager. Higginbotham is prepared to demonstrate the Colton Police Officers Association had expressed a clear and overwhelming lack of faith in Rulon’s ability to lead the department.
City officials made motions to have the case dismissed, but in October 2010 San Bernardino Superior Court Judge Frank Gafkowski ruled that Rulon’s claims of retaliation, defamation of character and intentional infliction of emotional distress should be heard by a jury.

29 Palms Rejects Batch Plant Near Residences

TWENTYNINE PALMS—A divided city council this month rejected Robertson’s Ready Mix’s request for the annexation of 150 acres into the city and a zone change on 37.5 of those acres.
Robertson’s Ready Mix wants to construct a batch plant on a portion of the 150 acres the company is in the process of acquiring at the northeast corner of Utah Trail and Valle Vista Road. The company had requested that the property, which is currently unincorporated county land, be annexed by Twentynine Palms. In processing Robertson’s request, the Local Agency Formation Commission (LAFCO) requested that the city change its current designated zoning in the area, which lies in Twentynine Palms’ sphere of influence, from rural residential to industrial.
Robertson’s had initially sought to have all 150 acres pre-zoned as industrial, but limited that request to the 37.5 acres needed to accommodate the batch plant, after coming before the planning commission in January with regard to the project proposal. The planning commission, after hearing protests about the plant and the proposed zone change, recommended that the project and zone change request be downscaled.
The council voted on February 14 to respond to Robertson’s request relayed though LAFCO by voting to pre-zone the entire property as rural residential, leaving the county’s current land designation in place. Currently, the land is zoned for residential use with a density of one house per five acres.
According to Robertson’s spokeswoman, Christine Goeyvaerts, the operation of the batch plant will not intrude on surrounding properties and the company will sprinkle water on the property to anchor the dirt and prevent dust from being stirred up. Goeyvaerts said the company was not trying to do an end run on Twentynine Palms by obtaining an operating permit through the county and was instead seeking to annex the property into the city first, so that local planning authority could be brought to bear on the project. She said there were numerous advantages to having the city annex the property.
Goeyvaerts said that her company had discussions with the California Department of Toxic Substances Control with regard to the batch plant operation and that Robertson’s would comply with the Department of Toxic Substance Control’s guidelines for the use of materials and chemicals at the plant and meet standards imposed by the Air Quality Management District.
“Annexing the property into the city of Twentynine Palms will allow us to be part of the community,” Goeyvaerts said. “We plan to be in the community for a long time.”
Local residents, however, were skittish over the close proximity of the proposed industrial operation to residential uses.
David Blake, a homeowner who lives roughly a half mile from the proposed batch plant on a homestead established by his father in 1948, said the plant would be “too close to the residential area. They’re going to choke the life out of us there. This [plant] is what we’re going to have to be looking at for the rest of our lives.”
Lloyd Johnson protested that he was not given adequate notice by Robertson’s Ready Mix nor by the county of a zone change request or the proposal for a concrete batch plant on the property. He questioned whether the batch plant would remain contained on the 37.5 acres and suggested the plant would be expanded in the future. “Why do they want to purchase so much more property than is necessary for the considered use?” Johnson asked.
Councilmen Joel Klink and Jay Corbin said it would be more desirable for Robertson’s to locate its batch plant in the city’s currently designated industrial area, which is well insulated from residences. Klink said putting the batch plant near the corner of Utah Trail and Valle Vista Road was “spot zoning. I just don’t feel it’s the right position out there at this time.”
Corbin said the proposal was inconsistent with the city’s general plan, which calls for industrial uses to be separated from residential land uses. “I don’t know how we can approve your project and say we’re complying with the general plan The residents who spoke here tonight bought land in a residential area. They had no reasonable expectation we would bring industrial land or an industrial park into their neighborhood.”
City manager Richard Warne told the council that even though it might recommend to the county that the current residential zoning on the property be maintained, if the city chose not to annex the property the ultimate land use authority would remain with the county and the county could approve the batch plant.
On a 3-2 vote, with mayor John Cole and Councilman Danny Mintz dissenting, the council denied the general plan amendment request.

Mosque Approval Under Appeal

Residents of the unincorporated county area between Montclair and Chino on the north and south and Ontario and the county line/Pomona City Limits on the east and west have appealed the county planning commission’s approval of a mosque in their neighborhood to the county board of supervisors.
On December 8, the San Bernardino County Planning Commission granted a conditional use permit to build the Al Nur Mosque on a 1.54-acre parcel at 4797 W. Phillips Boulevard, which is approximately 330 feet east of Yorba Avenue. The 7,512 square foot religious center would have a maximum occupancy of 262 people.
While some neighbors oppose the plan, certain members of the congregation at the Church of Jesus Christ of Latter-day Saints located at 4321 Philadelphia Street have gone on record as supporting the mosque, citing the principal of “Muslim and Mormon cooperation.”
Area resident Jim Weedell said he believes the site, which lies in the midst of residential and residential/agricultural uses, is not suitable for a mosque. “This should be put in a place where it will work,” he said. “The lot is too small and the road there is not wide enough.” Weedell said that the mosque will be out of place because “No one in the neighborhood is Muslim.”
Other residents say they are concerned that the land will not accommodate a large influx of visitors and that this will overwhelm the neighborhood during religious services that normally take place between noon and 3 p.m. on Fridays. The land there does not have a sewer system and homes in the area utilize cesspools and septic systems.
The project proponents will install a 2,000-gallon septic tank, which they maintain will handle a capacity crowd of worshippers.
Project supporters say their opponents are gripped with “Islamaphobia.”
Rashid Ahmed, chairman of the Al-Nur Islamic Center, spoke passionately about the need for the mosque.
Heidi Duron is the county land use specialist who vetted the project.
The board of supervisors will hear the appeal at the February 28 board meeting.

Class Action Suit Filed Against Redflex Over Red Light Cameras

Attorney Robert Conaway earlier this month filed a class-action lawsuit against Victorville and its red-light camera program, alleging due process rights violations. The suit seeks the recovery of fines paid and millions of dollars in damages.
Conaway, who is based in Barstow, filed the lawsuit in Victorville Superior Court February 14 on behalf of lead client Michael Curran and others who received red-light tickets issued as a consequence of the  Redflex Traffic Systems camera devices mounted in Victorville.
According to the suit, in order for a peace officer to issue a citation for a misdemeanor or infraction, the offense must occur in that officer’s presence. Removing that requirement, as does the arrangement in Victorville, violates the California Penal Code, according to Conaway. Declarations for the red-light camera citations from the Redflex system issued in Victorville are certified under “information and belief,” which the lawsuit maintains is akin to hearsay, not a police officer’s personal knowledge.
The officer who issued Curran the citation, deputy Barbara Hill, did not contemporaneously witness the alleged red light violation, rendering the ticket Curran received invalid, according to Conaway. In addition, according to the lawsuit, the proof of service was signed by a Redflex computer operator and was bulk mailed, further rendering the ticket invalid.
Utilizing a computer controlled camera to initiate and carry out the citation process, Conaway asserts, deprives defendants of the opportunity to confront their accuser in court, a guarantee granted all citizens under the Bill of Rights. Beyond the Constitutional issue, Conaway contends Australia-based  Redflex violated the California Business and Professions Code Sec. 17200 by engaging in unfair business practices that unjustly enriched the company. Moreover, according to Conaway, Redflex should be held accountable under the product liability doctrine because of the flaws in the design and operation of its system.
The suit seeks $9 million in damages and more in punitive damages for the roughly 5,000 motorists impacted by the system.
Redflex, which has a corporate office for the United States in Phoenix, Arizona, maintains that its processes are legal and constitutional and contribute to public safety. In a corporate statement, Redflex said “There’s no good excuse for running red lights.”
In March 2011, the Victorville city council agreed to look into the possibility of terminating its contract with Redflex but by July had concluded that penalties written into the contract for early termination were too expensive and that it would be best for the city to keep the cameras in place until the 2014 expiration of the contract with the Australian company.
Other cities in San Bernardino County have likewise expressed a desire to do away with the camera ticketing systems or have done so.
The city of San Bernardino last year considered shutting down its system but did not do so because of the expense in terminating it and instead its city council voted 5-2 in September to allow the red-light cameras operated by a different Arizona-based concern, American Traffic Solutions, to remain in place until 2014.
The Grand Terrace city council voted in July to discontinue its contract  with Redflex when  it expires in August after the program ended up costing the city $72,204.
The city of Loma Linda bailed on its contract with Redflex in December 2010.
Upland nearly three years ago ended its red light camera program, terminating its contract with Redflex.
The city of Highland has bucked that trend, and last April its city council in a 4-1 vote extended its contract with Redflex until later this year.

Needles City Council Unwilling To Take Out Loan For Hospital

NEEDLES–The Needles City Council last week rejected the hospital board of trustees’ request to have the city guarantee a $1 million loan for Colorado River Medical Center.
The hospital board of trustees, at the behest of former interim chief executive officer Jon Freeberg, voted on January 25 to ask the city to make the loan to tide the hospital over until the medical center’s sale to the non-profit Needles Hospital Inc. is completed.
The city council in January voted to sell the Colorado River Medical Center and the 5.71 acres it sits upon to Needles Hospital Inc. for $3,587,002. For that amount, Needles Hospital Inc. will purchase most assets and liabilities of the hospital, including accounts receivable, operating inventory in place, outstanding bills and unemployment obligations. Unassumed debts will be deducted from the purchase price but the city is to keep any cash in the hospital’s coffers at the time of sale.
On January 27, the city, represented by Mayor Ed Paget, and the board of hospital trustees, represented by chairman Jeff Williams, and Needles Hospital, Inc, represented by Rebecca Valentine,  signed a purchase agreement, opening escrow. Needles Hospital Inc. has until April 26 to show proof of funding for the purchase of the hospital and until May 26 to close escrow.
Interim hospital chief executive officer Jon Freeberg’ wanted the city to seek the loan through United Health Care to guarantee that the hospital remains open until Needles Hospital Inc. can take over operations and so that the hospital can come into compliance with federal requirements related to record keeping, billing and patient management at the hospital.
The city took on ownership of the Colorado River Medical Center in April 2008 after Brentwood, Tennessee-based Lifepoint Hospitals, a for-profit corporation, embarked on an effort to move the institution’s equipment and personnel to another hospital it owned in Arizona, roughly 12 miles from Needles.
Because of long-running inadequate billing practices, including failures to invoice Medicare and Medi-Cal as well as insurance companies and patients in a timely fashion, the hospital has lost money, representing a financial liability to the city. The city created a board of trustees to oversee the hospital, and that panel, together with the city council, came to a consensus that spinning the facility off to an independent operator is the best solution for ensuring that the community has adequate medical care without soaking the taxpayers.
In June 2010, Needles voters passed Measure Q, which was  intended to keep the hospital’s doors open and absolve the city of the financial burden of subsidizing the facility. Measure Q mandated that a non-profit entity be selected to run the hospital.
Freeberg was pressing for the loan to be taken out at this point because, he said, by obtaining the loan and acquiring computerized record keeping, billing and patient management systems, the hospital could qualify for reimbursement of up to $750,000 for that equipment and software. He said the hospital must be compliant with federal standards in record keeping and billing by 2014. The council members, however, were reluctant to encumber the city any further with regard to the hospital’s operations. Councilman Jim Lopez pointed out that the hospital will no longer be owned by the city in 2014 and that the city had agreed to sell the Colorado River Medical Center to Needles Hospital Inc. to wash its hands of the financial liability the hospital represents.
Upon councilman Tony Frazier’s motion, the council at its February 14 meeting voted unanimously to not seek or sign for the loan.

Upland’s Lawyer Fees Now Exceed Amount Of Settlement Offer

The city of Upland has now expended more in legal fees fighting a lawsuit brought against it by the county of San Bernardino over the Colonies Development than it would have paid if it had accepted a settlement offer on that suit previously made by the county.
Available city documents show Upland has paid its law firm, Richards Watson & Gershon, at least $2.2 million for legal work relating to the suit the county of San Bernardino brought against Upland. More recent billings by the firm, the precise amount of which have not yet been made publicly available, likely push that total to more than $2.4 million. County officials more than three years ago indicated they would have been willing to settle the case for $2 million.
At the basis of the lawsuit is the Colonies at San Antonio residential and Colonies Crossroads commercial developments in northeast Upland undertaken by the Colonies Partners, which the city gave final approval for in 2002. In 2002, the Colonies Partners sued the county after the county refused to pay for improvements necessitated by the extension of the 210 Freeway and the county’s construction of a flood control appurtenance for the city of Upland, known as the 20th Street storm drain. The issues were complicated by Caltrans’ construction of the 210 Freeway across roughly 40 acres of the 460 acres of the Colonies Partners’ property, for which the Colonies Partners were paid $17 million in severance damages.
The county and its flood control district filed a lawsuit in 2004 against the city, the county’s transportation agency, known as San Bernardino Associated Governments (SANBAG) and Caltrans, the state department of highways, seeking partial reimbursement for a possible future settlement.
In November 2006, a 3-2 vote of the county board of supervisors conferred a $102 million payment on the Colonies Partners as a settlement of the lawsuit. The settlement was supported by supervisor Gary Ovitt and then-supervisors Bill Postmus and Paul Biane. The county at that point moved ahead with the litigation against Upland, SANBAG and Caltrans, maintaining they shared responsibility for the freeway plan and the re-routing of storm water runoff onto the Colonies property that had created the circumstances underlying the original lawsuit.
The Sentinel has learned that nearly four years ago the county and its flood control district offered to drop all claims against the city for $2 million.
It is unclear how thoroughly that offer was shared with the Upland City Council. Current mayor Ray Musser, who was then a city council member, said he was never told of the $2 million settlement overture. At that time, then-mayor John Pomierski often gave directives to city staff without the full consent of the city council. City attorney Bill Curley was unavailable for comment.
Upland Councilman Ken Willis previously told the Sentinel that based upon the briefings he and the council had received from Curley, who is an employee of Richards, Watson & Gershon, he did not believe the county had a realistic case against Upland and the county had no legal basis to have Upland share in the cost of the $102 million settlement with the Colonies Partners.
The county’s lawsuit against Upland, SANBAG and Caltrans was removed to San Diego County Superior Court and the defendants made a motion in 2009 to have the case dismissed. But on April 3, 2009 San Diego County Superior Court Judge Jay M. Bloom ruled that the county and flood control district’s complaint “adequately alleges facts to support the causes of action” and the plaintiffs could proceed with the effort to obtain at least partial reimbursement of the $102 million.
Subsequently, the state attorney general’s office and the district attorney’s office brought charges against Postmus, Biane and Ovitt’s chief of staff at the time of the settlement, Mark Kirk, along with one of the managing principals of the Colonies Partners, Jeff Burum, alleging the $102 settlement was tainted by extortion, bribery and conspiracy.
Last year, Pomierski, who was mayor when the Colonies projects came to fruition, was indicted by a federal grand jury and charged with political corruption, including extorting individuals with business before the city of Upland. He has resigned from office.
The Sentinel has learned that around the time the county made the offer to settle the portion of the lawsuit against Upland for $2 million, Burum offered to split the cost with the city and put up $1 million of that settlement amount.
After the criminal charges were filed against Postmus, Biane, Kirk and Burum, the city made another motion to have the county’s case delayed pending the outcome of the criminal cases. Bloom denied that motion.
An earlier legal strategy contemplated by Richards, Watson & Gershon which was based upon asserting Upland should not be held to account for a settlement that was forged through  Postmus and Biane’s entanglement in a bribery and extortion scheme has been compromised by the federal government’s allegations that Pomierski was involved in similar activity.
While lawyers with Richards, Watson & Gershon maintain that the county has not yet propounded proof of Upland’s liability, the case has yet to be fully litigated. Taking the matter to trial is likely to cost the city of Upland another $2 million. In a claim filed against the city of Upland last November, former city manager Robb Quincey asserted that Richard, Watson & Gershon’s billing of the city was out of control.
Quincey said he had hired a third-party claims investigator, NovaPro, to audit  Richard, Watson & Gershon’s legal fees on litigation matters it was handling for the city in September 2010.  “The NovaPro’s audit disclosed that on one litigation matter brought by the San Bernardino County Flood Control District against the City of Upland, Richards, Watson & Gershon racked up charges of $105,830 for September only,” Quincey’s claim states. “On this matter alone, just for this month, Richards, Watson & Gershon billed for the time of seven partners and employees who charged up to $348 per hour; the total hours billed were 367.3 at $288 per hour.”

Deadline On Desert Water EIR Feedback Extended

The review period for the draft environmental impact report on the  Cadiz Valley Water Conservation, Recovery, and Storage Project has been extended until March 14.
The Cadiz Valley Water Conservation, Recovery, and Storage Project is a plan by Cadiz, Inc., which is also known as the Cadiz Land Company, to pump an average of 50,000 acre-feet of water per year out of the aquifer in San Bernardino County’s eastern Mojave Desert and convey it in a pipeline to Riverside, Orange and Los Angeles counties to replenish the water supply there.
The Santa Margarita Water District in Orange County was designated as the lead agency on the project with a tentative budget of $536.25 million that is to entail the sinking of 34 wells into the Cadiz Valley’s desert floor, together with the construction of a 44-mile pipeline along a railroad right-of-way until it meets up with the aqueduct that carries Colorado River water to the Los Angeles and Orange County metropolitan areas.
The Cadiz Land Company has proposed that the Santa Margarita Water District will receive the lion’s share of the water to be extracted from the desert aquifer. In addition, Cadiz, Inc. has entered into agreements with Three Valleys Water District, which provides water to the Pomona Valley, Walnut Valley, and Eastern San Gabriel Valley; the Golden State Water Company, which serves several communities in Southern California, including Claremont;   Suburban Water Systems, which serves Covina, West Covina and La Mirada; and the Jurupa Community Services District, which serves Mira Loma in Riverside County.
The Cadiz Valley is located just south of the Marble Mountains and northeast of the Sheep Hole Mountains near the National Trails Highway. Cadiz is home to a former railroad stop along the Santa Fe line, 17 miles east of Amboy and 70 miles from Needles.
A firestorm of protest erupted earlier this month as East Mojave residents and landowners, as well as environmentalists learned that the comment period with regard to the environmental impact report was set to lapse on February 13 and that the county of San Bernardino was not serving as the lead agency on the project and was instead allowing the Santa Margarita Water District, which is located some 217 miles from the Cadiz Valley, to conduct the public hearings for the project and carry out its environmental certification under the California Environmental Quality Act.
While the Cadiz Land Company and the Santa Margarita Water Agency maintain that the proposed project will be a beneficial one that will only extract water that would otherwise be lost to evaporation, opponents maintain the environmental impact report (EIR), which is being undertaken by Environmental Science Associates, is flawed and that the project will deprive the Cadiz Valley of a precious resource for generations while wreaking ecological havoc not only on the Cadiz Valley, but on adjoining desert areas and their water tables which are interconnected to the Cadiz Valley aquifer.
The Santa Margarita Water District published a draft environmental impact report  on the project on December 5, 2011, at which point 70 days for comment were provided. Many residents and landowners within the Cadiz Valley have said they had not received notification of the report.  The district received dozens of letters demanding that fuller notice be provided and that the comment period on the environmental impact report be extended. In response, the  Santa Margarita Water District (SMWD) last week issued a terse notice to the California Office of Planning and Research, which stated, “Although the initial comment period exceeded the minimal time requirements  set forth under the California Environmental Quality Act, SMWD has received several requests to further extend the comment period. In response to these requests and in recognition of the importance of providing ample review of the project, SMWD is extending the comment period an additional 30 days, bringing the total public review period to 100 days. The comment period on the draft EIR will now close on March 14, 2012.”
Copies of the draft EIR and appendices are available at the Santa Margarita Water District Website,; the Santa Margarita Water District Office, at 26111 Antonio Parkway, Rancho Santa Margarita, CA 92688; the Twentynine Palms Library, at 6078 Adobe Road, Twentynine Palms, CA 92277; the Rancho Santa Margarita Public Library, located at 30902 La Promesa Drive, Rancho Santa Margarita, CA 92688; the Joshua Tree Library, located at 6465 Park Blvd, Joshua Tree, CA 92252; and at the San Bernardino County Library, located at 104 W. 4th Street, San Bernardino, CA 92415.
Those wishing to comment upon the environmental impact report may do so by providing those comments in writing, together with a return address and contact name, on or before March 14 to Environmental Science Associates c/o Tom Barnes, 626 Wilshire Boulevard, Ste. 1100, Los Angeles, CA 90017, Telephone: 213-599-4300, FAX:  213-599-4301; or by email to:
Meanwhile, a coalition of desert residents and environmentalists are pushing the California Office of Planning and Research to use its authority to extend the comment period 60 days beyond the March 14 deadline and substitute San Bernardino County as the lead agency on the project.

LAWA Commits To Intensifed Marketing Of Ontario Airport

Los Angeles World Airports, the division of the city of Los Angeles which runs Los Angeles International, Ontario International and Van Nuys airports, indicated this week it will step up its marketing of Ontario Airport.
The city of Ontario, which entered into a cooperative airport operating agreement with the city of Los Angeles for Ontario Airport in 1967 and outright deeded the airport property to Los Angeles in 1985, in recent years has been pressing Los Angeles to relinquish control and ownership of the aerodrome back to Ontario. After Ontario Airport attracted a record 7.2 million passengers in 2007, its use has dropped off precipitously. Ontario officials blame Los Angeles World Airports for that drastic downturn, alleging that LAWA has been promoting Los Angeles International Airport at the expense of Ontario International. Ontario city manager Chris Hughes has said that the drop-off in passenger traffic at Ontario International has resulted in a serious dent in the local economy. “The region has lost half a billion dollars since 2007 and lost 9,000 jobs.  Los Angeles World Airports has done nothing to stop the bleeding and improve passenger traffic at Ontario,” Hughes said.
Ontario officials maintain that Los Angeles World Airports officials have purposefully reduced their marketing campaign for Ontario Airport and have simultaneously escalated the per-enplaned passenger fees charged to the airlines at Ontario International to over $14, making it for the airlines the most expensive airport in the nation to fly from. Moreover, they claim, LAWA is employing far more support personnel at Ontario Airport than is necessary, making it more expensive still.  Ontario officials maintain that if they regain control of the airport, they will change operational procedure and priorities and engage in a promotional campaign that will revive use of the airport.
In response, Los Angeles World Airports chief executive Gina Marie Lindsey this week publicly announced that LAWA is set to embark on “aggressive management techniques to market Ontario International Airport, and we will bring those ideas forward within 60 days.”
Lindsay said LAWA is in the process of assembling a new marketing team, including outside consultants, who will take “a fresh approach in marketing the airport.”

Gina Marie Lindsey

LAWA officials attribute the loss of passengers at Ontario Airport to the recession, the slow economic recovery of the Inland Empire, as well as changes in the airline industry that focus on building service at large hub airports at the expense of medium hub airports such as Ontario Airport. Los Angeles officials report that since taking over ownership and operation of Ontario Airport in 1967, LAWA has expanded the 485 acres Ontario Airport was situated on in 1967 to approximately 1,700 acres today, and has invested over half a billion dollars in improvements.
In recent weeks, the cities of Riverside, Jurupa Valley, Corona, Moreno Valley, Canyon Lake, Apple Valley, Fontana, Rancho Cucamonga, Walnut, Industry, Laguna Niguel, Diamond Bar, Victorville, Claremont, Chino Hills, Temecula and Lake Elsinore have endorsed the concept of Los Angeles returning control and ownership of Ontario Airport to Ontario.
At its January 23 meeting, the Los Angeles World Airports Board of Directors endorsed a resolution to delay the transfer or sale or Ontario Airport for at least two years. On January 24, however, Los Angeles councilmen Dennis Zine and Bill Rosendahl called for a study of how to return LA/Ontario International Airport to Ontario and asked for a report on the airport’s fair market value and the possibility of a sale. Their motion was not voted upon by the full council but instead referred to the council’s Trade, Commerce and Tourism Committee.
Estimates of the value of the airport range from $560 million to over $1 billion. Some Los Angeles officials have indicated that the city would be willing to let go of the airport for as little as $450 million.
Ontario city officials insist that the approximately $550 million which Los Angeles officials claim to have invested in Ontario Airport did not consist of taxpayer money but rather operating revenue generated at the airport along with federal grant money. Ontario has privately offered to pay Los Angeles $50 million in cash, assume $75 million in bonded indebtedness at the airport and provide up to $125 million to Los Angeles from future revenue to be generated at the airport in the way of passenger facility charges, pending the airport achieving certain passenger traffic levels.