Upland City Manager Waived Residents’ Rights To Vote On Assessments

By Mark Gutglueck
Upland City Manager Martin Thouvenell last December unilaterally and without authorization by either the Upland City Council or the city’s voters waived the right of Upland residents to a vote on the taxes that would be imposed on them as a result of the closure of the city’s fire department and the annexation of all properties within the city limits into a county fire service assessment district.
Documentation obtained by the Sentinel shows that on December 5, 2016, in his capacity as Upland city manager, Thouvenell submitted documents to the San Bernardino County Local Agency Formation Commission relating to the city’s application to shutter its 111-year-old municipal fire department in favor of having the county fire agency assume firefighting, fire safety, fire prevention, emergency response and emergency medical service in the City of Gracious Living. In order for that takeover to take place, the county imposed requirements that a sufficient portion of the ad valorem property tax heretofore received by the city which is used to pay for the provision of city services be rerouted to the county to defray the projected cost of the county fire agency taking on the role until now filled by the Upland Fire Department. At that point an assessment arrangement was proposed by which the city’s property owners would chip in an amount, above and beyond the property tax they already pay, to meet a significant portion of the county fire division’s costs of operating in Upland. The Local Agency Formation Commission cataloged this as an assessment. What has not been widely discussed is that the city intends to use the savings it will yield by the elimination of the city’s municipal fire fighting service, the reduction in the cost of providing that service based upon the county fire department’s lower operation costs and the influx of some $3,346,440 [21,918 parcels X $152.68] in heretofore unavailable taxes in the form of assessment revenue toward other municipal operating costs, what many Upland residents see as a shell game that entails what is essentially an increase in taxes they and their fellow citizens did not have the opportunity to vote upon.
Thouvenell, in signing the assessment district formation application with the Local Agency Formation Commission represented himself as the “proponent,” and listed himself as the agent of the city to receive all of the related notices and other communications. In connection with the application he signed a document which states:
“As the proponent, I acknowledge that annexation to the San Bernardino County Fire Protection District may result in the imposition of taxes, fees, and assessments existing within the city or district on the effective date of the change of organization. I hereby waive any rights I may have under Articles XIII C and XIII D of the state constitution (Proposition 218) to a hearing, assessment ballot processing or an election on those existing taxes, fees and assessments.”
In this way, Thouvenell, on behalf of the taxpayers of Upland, signed away the rights the residents of Upland are accorded under the California Constitution in those articles and he directly and indirectly assumed all liability for violations of the Constitution, even as, in his capacity as city manager, he is indemnified by the residents of the city under the terms of his contract. In other words, by his action in signing the waiver, Thouvenell preempted, or sought to preempt, forever the ability of Upland’s residents to assert those Constitutional rights.
California Constitution Article XIII D§1(b)(5) says “No fee or charge may be imposed for general government services including but not limited to fire services where the service is available to the public at large in substantially the same manner as it is to property owners.” The burden of proof is on the agency on this issue, according to the California Constitution.
And XIII D §6(c) says no property related fee or charge may be imposed except by majority vote of the property owners subject to the fee or charge, or by 2/3 of the electorate. Further, Article XIII C, §2c(2)(d) says: “No local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a 2/3 vote.”
Pursuant to the Upland application, the San Bernardino County Local Agency Formation Commission’s staff made a recommendation that San Antonio Heights, an unincorporated county area adjacent to Upland which is currently provided with fire protection service by the county fire department within what is referred to as the Valley Service Zone, be consigned along with Upland into another fire service zone, FP-5, which was originally formed as a service zone for the communities of Silverlakes and Helendale, which are located in the Mojave Desert, 64 miles driving distance or 49 miles as the crow flies from Upland. As a consequence, all property owners in both Upland and San Antonio Heights, which heretofore have received fire protection service as a consequence of their municipal or county unincorporated district status in which property taxes defrayed the cost of basic services, will now be assessed $152.68 year. To seal this deal, the San Bernardino County Local Agency Formation Commission scheduled a “protest vote” confirmation of the annexation and the assessment district formation – a mere formality – consisting of the San Bernardino County Local Agency Formation Commission’s invitation of property owners and voters within each of the jurisdictions to lodge letters of protest against the annexation. Each protest letter received was to be counted as a single vote against the annexation. Any resident or voter not lodging a letter of protest was to be presumed to have voted to accept the annexation. Nothing approaching sufficient opposition appeared to be manifesting in Upland or in San Antonio Heights to achieve the 25 percent protest threshold, which would have triggered a traditional vote at Upland and San Antonio precincts on the annexation and the inclusion of the two communities into the assessment district, let alone the majority vote against the annexation which would have nixed it outright. The protest period began on May 12 and was previously set to conclude on June 14. Because the San Bernardino County Local Agency Formation Commission staff failed in the comprehensiveness of its noticing of the protest process to invite all of the property owners in Upland and San Antonio to lodge letters of protest, an attorney, Joseph D. Farrell, threatened the San Bernardino County Local Agency Formation Commission with legal action. The San Bernardino County Local Agency Formation Commission capitulated and extended until July 14 the protest period for Upland and San Antonio Heights. Despite an energetic and seemingly well-coordinated effort by a core group of Upland and San Antonio residents to incite residents/parcel owners there to lodge letters of protest, it is anticipated that the annexation will go through.
This has not gone over well in either Upland or San Antonio Heights, where growing numbers of residents, miffed at having had what they believe to be their right to vote on approving or disapproving newly created taxes they are to pay, are queuing up to join with some of their fellow residents who are coordinating with attorneys to legally contest what is being foisted on them.
An issue in the anticipated legal action is Thouvenell’s signing of the waiver.
At the November 28, 2016 Upland City Council meeting, an item on the agenda, Item 14 B, related to annexing the city into a San Bernardino County Fire Protection District for fire service delivery. During the consideration of 14 B, a motion by Mayor Ray Musser seconded by Councilman Gino Filippi to adopt a resolution in support of annexation into the San Bernardino County Fire Protection District 5 was approved by a unanimous vote of the council. Another motion by Councilman Filippi to authorize the city manager to negotiate the terms and conditions of the annexation with the county and the fire district and return to the city council for approval was seconded by Councilwoman Carol Timm, and was approved unanimously.
On December 5, Thouvenell, acting in his capacity as the city manager, signed documents initiating the annexation application which were then processed by the San Bernardino County Local Agency Formation Commission which. Among those documents was the “certification” which waived the rights of the city’s residents to vote on any taxes to be imposed on them as a consequence of the annexation. There was no meeting of the Upland City Council between November 28 and December 5, 2015 at which Thouvenell would have had the opportunity to return to the city council for the approval of the terms he had negotiated with the county and the fire district relative to the annexation. The next council meeting after November 28 took place on December 12, during which there was no reference to the annexation.
It thus appears Thouvenell acted unilaterally and without proper council authorization when he signed the waiver, having not complied with the November 28 vote of the council to have him negotiate the terms of the annexation and return to the city council for their approval. There are variant theories as to whether the city has the right to waive the entirety of the city’s voters’ rights to voting upon the imposition of new taxes. Some say the city does not have that right at all. Others say that while it is questionable as to whether the council has that right, the city manager, who is not an elected official, certainly doesn’t have that right.
Thouvenell spurned the Sentinel’s request for an explanation of his rationale in signing the waiver and whether he now believes he may have acted too hastily in signing it on December 5. Nor did Thouvenell indicate whether he now thinks it might have been better to bring the waiver back to the city council to let it make the decision on whether to grant the waiver, and he did not comment on whether he should have deferred the signing of the waiver to the mayor.
Indeed, the city’s leaders appear to have worked themselves into a very delicate legal position, so much so that the city’s publicist, Steve Lambert, who had previously been utilized to draft statements for the city council to overcome the growing discomfiture of Upland residents over the annexation, has been forbidden to work any further on the issue out of concern that the words he might craft for the council will create difficulty for the city when the legal actions are filed. The Sentinel has learned that there are at least four law firms looking at the options residents have both individually and collectively to contest the annexation in court. Accordingly, city officials generally, including the city manager and the city council, are now withholding comment on the festering issue altogether. Early this week, a memo from city attorney Jim Markman relating to the legal pitfalls the annexation represents went out to city council members. Language from the memo went public and the Sentinel queried Markman about the issues at play.
Markman responded, “The council’s clear intent and Marty’s charter was to seek annexation to the fire district which required the application of the district tax to provide the services. This is spelled out particularly in the service plan and is understood by the public and has been objected to energetically by members of the public. The application of the tax is a policy decision made by the council. The city waiver does not deprive any opponent of the annexation from objecting based on policy or legal issues available to that opponent. A city cannot waive the rights of individual taxpayers. An affirmation of the city council’s intent that the district tax revenues be available to provide fire service under the area service plan is consistent with the council actions and direction to Marty. Further, the city is not a taxpayer and, accordingly, is not in the position to make a Proposition 218 protest. That is why I believe that the waiver itself has no substance or meaning in the context of this annexation.”
Markman suggested that Thouvenell’s signing of the waiver was a mere formality in the application that has no binding impact on the city’s voters and should not elicit alarm.
“In order to process the application, LAFCO [the Local Agency Formation Commission] required the city (through Marty) to execute the application in the form presented, which included the standard, but in this case, meaningless Prop 218 waiver,” Markman said. “The application form is general in nature and has numerous sections inapplicable to the subject annexation request. Please note the number of sections to which the city replied with the phrase ‘not applicable’ or ‘N/A.’ The form waiver would be very meaningful in the context of a private landowner (e.g., a developer) applying to annex to the district and, after being annexed, having the opportunity to avoid a tax by asserting a Proposition 218 deficiency. In other words, LAFCO meaningfully uses the Proposition 218 waiver to prevent such a private landowner from seeking to eradicate the tax base identified in the plan of service after annexation is approved. Otherwise, such a private landowner could annex to a public entity and thereafter seek to avoid payment for services. That is the context in which such a waiver would have substance.”
The “notion… that Marty was not authorized to sign LAFCO’s standard application form which includes the Proposition 218 waiver,” Markman asserted “is incorrect. Marty was instructed to process the annexation which transparently identifies the application of the district tax as necessary to implement the plan of service. It is not my function to address the council policy decision to include the district tax as an integral component of the annexation. Nor is there any merit in criticizing Marty for implementing that council policy, which is exactly what he has done.”
Grace Lehman, a San Antonio Heights resident said, “If this is an important thing to the City of Upland, then they need to make their case to the people of Upland and let them decide whether they want to have their taxes raised $150.00 plus 3 percent per year. Upland needs to leave San Antonio Heights out of it. We don’t want to be annexed by, to, or with Upland in any way. We’ve made that point before. We see it as just a way of them inching their way to get San Antonio Heights on their property tax rolls. Then they will want to take our water rights too.”
Joseph D. Farrell, who is representing several property owners in their resistance to the imposition of the assessment district, told the Sentinel, “California voters have repeatedly, in a series of voter initiatives going back to Proposition 13 in 1978, stated a preference that tax increases be approved by voters in an election. The LAFCO process circumvents that oft stated desire.”
Farrell said, “No one is against either the San Bernardino County Fire Department, or its members. The opposition is not about fire protection; it’s about taxation.”
Farrell said that Upland, the county and the Local Agency Formation Commission were engaging in taxation without representation.
“Upland can do what it wants, limited by what its citizens are willing to tolerate from their elected officials,” Farrell said. “LAFCO decided unilaterally to include San Antonio Heights in the FP-5 proposal. No one asked us. No one came and proposed a change. Members of San Bernardino County LAFCO, none of who can be voted upon by residents of the Heights, are ramming this down residents’ throats without even telling us how it might benefit us. That’s wrong.”
Farrell said the county and its officials were not exercising proper oversight in holding the excesses of the City of Upland and the Local Agency Formation Commission in check.
“Our Supervisor, Ms. [Janice] Rutherford, has run away from Heights residents and forced me to challenge LAFCO’s improper notice despite knowing full well LAFCO failed to comply with the law,” Farrell said.
The city council, which was empowered through an elective process, should have more respect for the system that has put them in place, Farrell asserted.
“All residents want is the ability to vote,” Farrell said. “I don’t understand why that is so foreign to our elected officials.”
Cory Briggs, another attorney representing local residents seeking to unwind the imposition of the assessment district, said, “If LAFCO requires all those waivers and concessions from an applicant, but the Upland city manager did not have the authority to give and make them, how could he have had the necessary legal authority to start the process in the first place? I anticipate that legal question and the other important ones being answered in court if there are not enough protests to defeat this money grab.”
Marjorie Mikels, an Upland resident and attorney looking into the matter, said, “The issue is not whether Marty Thouvenell had the right, duty or obligation to sign the waiver. The waiver is an admission of fact. It proves the city’s fraud on the property owners. It is an admission that both LAFCO and the city through its ‘proponent’ acting for the council, knew an election was required under Proposition 218 (which was incorporated into Article XIII C & D) and that they were going to circumvent that requirement by nomenclature – i.e., by calling what they are doing an annexation. There is no territory of Upland contiguous to FP-5 and no part of Upland is being annexed into Helendale. They are calling it an annexation, but annexations are only to cities or districts, and FP-5 is not a city or a district – it is merely a tax zone. Tax zones are specifically excluded from annexations.”
Mikels, continued, “So, it is a fraud, one that is being perpetrated to make us believe we are being annexed and will be subject to FP-5’s already-voted on taxes, and are therefore not entitled to vote, just to protest if we want to. The protest forms are not votes. The protest forms are like signing a petition. One can get an initiative on the ballot with only 10 percent of the signatures of people who voted in the last gubernatorial election. But this protest requires 25 percent of registered voters, whether they voted or not. This is LAFCO and its executive director, Kathleen Rollings-McDonald, using an unauthorized procedure, the protest procedures designed for actual annexations. Annexations are when some contiguous unincorporated land is joining a city, for more efficient delivery of services. Our land is not being joined with or linked up to Helendale FP-5, and Helendale won’t be delivering us any services. Our boundaries aren’t changing – just our taxes. This is a fraud and Mr. Thouvenell’s waiver is Exhibit A.”

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