By Mark Gutglueck
Over the last three-and-half years a majority of the Adelanto City Council has pushed to rapidly transition the city of 34,500 to a cannabis-based economy. In the same time frame a core group of cautious city staff members have believed it prudent for the city to be more methodical than their political masters wanted in applying land use and code regulations on the projects coming into the city that involve the growing, processing, refining, packaging, distributing and selling of marijuana and its derivatives. The conflict between those two approaches has led to the mass exodus of city employees who were either fired or elected to leave out of an objection to the way the city was enthusiastically embracing the once-illicit substance. As a result, the City of Adelanto is seemingly buried beneath an avalanche of ongoing and pending lawsuits that are threatening to cost the city more in legal bills and settlements than the city might realistically stand to realize by capturing tax revenue from the local cannabis market.
At present, no fewer than 14 current and former city employees have either filed suit against the city or are in the advanced stage of preparing to do so. At least three further lawsuits are anticipated to follow, most likely before the spring of 2019 is upon the city.
It is an open question as to whether the intense push to have Adelanto get in on the ground floor of the societal shift toward cannabis tolerance and harness it to rejuvenate the city’s sputtering economy was indeed a sincere and well meaning one undertaken to benefit the community or whether the politicians driving the change are doing so out of venal intent and are truly bent on a profiting themselves and their associates.
In June 2013, the Adelanto City Council, as it was then composed, declared the city to be in a state of fiscal emergency, a move preparatory to the declaration of bankruptcy. Discussion of disincorporating Adelanto as a municipal entity ensued. The city made no actual filing for bankruptcy protection, managing to limp along, but real questions persisted about its ability to continuing as a growing concern.
In the November 2014 municipal election, Adelanto voters made a complete sweep of the three incumbents up for reelection, voting out in one fell swoop Mayor Cari Thomas along with councilmen Charles Valvo and Steve Baisden. They were replaced by Rich Kerr, John Woodard and Charlie Glasper, respectively. Very early on in Mayor Kerr’s administration, a coalition that included the mayor, Woodard and incumbent councilman Jermaine Wright formed, and the trio resolved, at first quietly and then gradually with greater publicity, to explore the possibilities existing in California law as a consequence of the 1996’s Proposition 215 Compassionate Use of Marijuana Act to stimulate Adelanto’s economy. Proposition 215 legalized the use of marijuana for medical purposes based upon a licensed physician writing a patient a prescription. Recognizing that the vast majority of California’s cities had enacted ordinances and maintained policies banning both the sale and cultivation of marijuana, prohibiting indoor and outdoor farms and nurseries, as well as keeping clinics or dispensaries from operating in their cities, the council majority believed Adelanto could fill a potentially lucrative void by going in a different direction. Only Councilman Ed Camargo would remain as a steadfast opponent of the marijuanification of Adelanto. Initially, to obtain the support of Glasper, who had concerns about making marijuana available to city residents, Kerr, Woodard and Wright agreed to limit marijuana-related activity in the city to agricultural operations, continuing to outlaw clinics and dispensaries. Kerr, as the mayor and point man on promoting Adelanto as the marijuana capital of California, made clear that the city was ready to welcome and facilitate any and all serious applications to grow marijuana out of enclosed warehouse-based greenhouses, as long as they were located in the city’s industrial park.
Early on, Jim Hart, who had been Adelanto’s city manager for over a decade, expressed reservations with regard to the strategy Kerr, Woodard and Wright were promoting and which Glasper was contemplating. Kerr, whose 2014 campaign for mayor had been managed by Adelanto Planning Commissioner Jessie Flores, began pushing Hart to hire Flores as the city’s director of economic development, a move Hart resisted in large measure because Flores had no experience or training in the capacity for which Kerr was advocating him. Expressing misgivings about the entirety of the situation, Hart took an early exit as city manager, barely three months after Kerr, Woodard and Glasper had assumed office. The city council quickly substituted into Hart’s place City Engineer and Public Works Director Thomas Thornton. But some 18 weeks after he was elevated to the interim assistant city manager’s position, Thornton, who was unwilling to move as quickly and aggressively into making Adelanto into a marijuana Mecca as Kerr, Woodard and Wright were demanding, tendered his resignation, in so doing abrogating the sixth-month contract he signed two months previously, in May, which would have kept him in place as city manager at least until November 2015.
At that point, the council turned to City Clerk Cindy Herrera, the city’s senior staff member. Herrera had been hired in 1987 as an executive secretary, and was promoted to assistant city clerk in 1994. She became city clerk in 1999, and possessed an unrivaled institutional memory with regard to the city as well as an understanding of municipal processes. The council offered her the top city job based on the calculation that she would require no learning curve to set about running the city in the way the ruling coalition on the council wished.
Herrera had a cordial familiarity with Kerr’s wife, Misty, that bordered on a friendship. In 2014 as city clerk, Herrera had received a salary of $79,121.86 together with $35,783.32 in add-ons and $12,824 in benefits for a total compensation package of $127,729.18. In her role as city manager, her salary was nearly doubled to $149,117.80 and she was provided with $37,301.81 in add-ons and benefits of $15,091.68 for a total compensation package of $201,511.29. This, Kerr, Woodard and Wright believed, would buy her loyalty and keep her signed on to their agenda.
With Kerr’s domination of City Hall complete, he was able to convince his council colleagues to retain Flores, not as a municipal employee, but rather as a consultant/contract economic development director through his newly created company, Municipal Economic Development Services, Inc., at the bargain basement price of $36,000 per year. Flores’ assignment was to attract potential entrepreneurs and businesses to set up shop in Adelanto. Under this arrangement, Flores was at liberty to go to work with and/or serve as a consultant to the business entities he was working to bring into the city.
Meanwhile, Herrera dug into her new assignment, doing her level best to execute the will of the council, carrying out within the parameters of her authority and duty the imperative to move the city toward becoming a cannabis-friendly environment for growers of medical marijuana.
In November 2015, the council passed an ordinance that added marijuana cultivation within enclosed structures meeting certain criteria to the list of permitted uses within the city’s industrial park per the city’s code and its zoning map. But with that move, there was another casualty among the city’s top staffers as Todd Litfin, the city attorney, resigned. Litfin, who was city attorney when Hart was in place and remained after Hart was ousted, was called upon to draw up all of the legal documents in support of the move to legalize the cultivation of marijuana. Litfin, however, balked, unwilling to do the council’s bidding and draft ordinances legalizing massive scale marijuana operations. Refusing to be the city attorney of record when those ordinances and their attendant zoning codes were passed, he abruptly resigned. Julia Sylva was quickly retained to finalize the cannabis cultivation permitting ordinance that prompted Litfin’s exit.
With the turn of 2015 to 2016 and the advent of the statewide push to legalize marijuana for recreational use which culminated in the placing of Proposition 64, the Adult Use of Marijuana Act, on the November 2016 ballot, Kerr, Woodard and Wright were emboldened further, even before Proposition 64 passed. Recognizing they did not need Glasper’s support to proceed, since they had a 3-to-2 majority on the council without him, they broached the concept of opening the city not simply to medical marijuana cultivation but farms where marijuana would be grown for use as an intoxicant. Moreover, they resolved to explore allowing retail establishments into the city, including dispensaries selling medical marijuana and, with the anticipated passage of Proposition 64, pot shops that would be akin to liquor stores. They widened the scope of the liberalized approach they were taking with regard to the commercialization of marijuana and its availability within the city limits, seeking to strike first and have Adelanto corner the market in terms of convincing cannabis entrepreneurs to locate in the city.
Herrera accommodated the council majority, which was signaling to would-be marijuana concern operators, both directly and through Flores, that the city was willing to facilitate their business plans. This included dropping the restriction on confining the cannabis-related operations to within the city’s industrial park, as was originally stipulated, and whole swaths of the city were rezoned to permit marijuana cultivation operations, cannabis product manufacturing and retail sales of the drug. In March 2016, satisfied that Herrera was sufficiently on board with what they were doing, the council majority, with the support of councilmen Camargo and Glasper, promoted Herrera to full-fledged city manager, dropping the qualifier “interim” from her official title.
There were indications, however, that not all was as salubrious as the council majority wanted it to be. Sylva, who had gamely sought to facilitate the city’s foray into the largely uncharted territory of making legitimized marijuana production a key element of a community’s economic foundation, burned out rapidly, leaving in April 2016 as a prodigious number of applicants flooded into City Hall, resulting in the city granting permits to no fewer than 25 cannabis growing operations in five months. Sylva was replaced as city attorney by Curtis Wright, of the law firm Silver & Wright LLP. With Curtis Wright in place, the council majority doubled down, effectively escalating the ante and transitioning Adelanto from a jurisdiction allowing cannabis-related businesses limited only to agricultural operations to one that embraced all level of marijuana-related commercial enterprises, including medical marijuana dispensaries and the coming advent of recreational marijuana emporiums.
There is evidence to indicate that Councilman Jermaine Wright, who was no blood relation to Curtis Wright, who was witnessing the absolute frenzy among would-be marijuana millionaires who were filing into City Hall to apply for marijuana-related business permits, crossed the line at that point. Many of those marijuana-related business applicants were bringing with them into City Hall briefcases full of cash. Wright at some point believed he might himself get in on the bonanza, despite his status as an elected city official prohibited by law from having a direct financial interest in anything coming before the city council. Indeed, there are strong indicators that Wright grew somewhat envious and resentful of Flores, whose consulting contract with the city allowed him to essentially play both sides of the street. Flores was free to picking up his $3,000 per month consulting fee for dialoguing with investors or businessman considering putting money into or undertaking projects within the city. It was then perfectly acceptable for Flores to go to work for or accept fees from those same investors or business entities he was networking with on behalf of the city. Moreover, the council was in the position of having ultimate authority over rezoning, the power to transform property that was of modest value when it was eligible for residential, commercial or industrial use into land that was worth upwards of four, five, six, seven, eight or nine times its previous value by being declared legally suitable for hosting a highly lucrative marijuana-related business.
This created some very questionable circumstances. There were multiple examples of what appeared to be inside information leaking out of City Hall. Land that was subsequently rezoned for cannabis-related operations was purchased by entities which were purposed to put it to that precise use before those zone changes were made. In at least one instance, a property that was later converted into a marijuana retail operation, was sold in the fall of 2016, less than two months in advance of that zone change being granted. Councilman Woodard, who owns his own real estate company and was involved in making the zone change, was the broker on that sale. In other cases, city employees in the planning and code enforcement divisions were interfered with by members of council, who pressed those employees to desist in their inspections of those cannabis-related business and cease their enforcement activities with regard to code requirements that in some cases were not met. In other cases, employees were being told to look the other way when operations at some of those businesses had initiated before the permits for those operations had been finalized.
Relatively late under Herrera’s watch as city manager, on December 12, 2016, a city staff meeting was held, attended by Mayor Kerr and Councilman Glasper. Several key staff members were present at the meeting, including contract City Engineer Wilson So, Assistant City Engineer Aaron Mower, Senior Planner Mark De Manincor, and Conservation Specialist Belen Cordero, along with Herrera and Flores. The upshot of the exchange was the mayor’s insistence that a multitude of projects, virtually all of them cannabis-related, be fast tracked and the development fees, infrastructure fees and permit fees for them be waived, together with his suggestion that the city apply for grants to make up for any loss in revenue those waivers entailed. When staff sought to explain to the mayor that this was not realistic or in keeping with rudimentary planning standards, he became irate. When Wilson So, in particular, attempted to artfully, diplomatically and respectfully tell the mayor that suspending the fees while attempting to defray staff costs for processing the incoming project applications through grants, which in any event would cost at least $40,000 to apply for with no guarantee of success, could have disastrous financial consequences, a clearly provoked Kerr grew profane, threw his own cell phone across the room, thundering that those present needed to change their attitudes, or else. He then stormed out of the meeting. Two days later, De Manincor, Cordero, Mower and So were axed in a 4-to-1 vote of the city council, effective January 1, 2017. Also fired were a planning assistant, finance consultant and information technology division employee.
There were recurrent reports that members of the city council were on the take, receiving bribes from cannabis-related project applicants. With a significant portion of her planning and engineering division fired from underneath her, Herrera found herself overmatched in trying to keep up with the feverish pace of facilitating cannabis-related businesses applications a majority of her political masters had demanded. It availed Herrera nothing to protest that the gutting of that element of the city staff instrumental in processing the applications had been taken away from her, as the attitude evinced by Kerr, Woodard and Wright was that the loss of those staff members was not a hindrance to what they were seeking to do but rather of assistance, since the idea was to have the city’s regulatory division stand down anyway.
With the council majority beginning to feel that Herrera was not nimble enough in accommodating its directives, the four walls of City Hall were seemingly closing in on her. Adding to her travails was that in January 2017 complaints about Flores and irregularities in his function as the city’s contract economic development director were inundating City Hall. A group of Adelanto citizens retained the Los Angeles-based Sutton Law Firm, which through attorney Bradley Hertz made three public records requests with the city for records pertaining to Flores’ employment, invoices, payments made, reimbursements and emails.
In the same time frame, Kerr had a mishap while riding his motorcycle, and the injuries he sustained left him temporarily incapacitated. With Kerr on the mend but no longer present on a daily basis at City Hall and Wright in some measure hoping that he might in some way tap into a portion of the marijuana-related project investment money that was flowing into Adelanto if Flores might somehow be gotten out of the way, Herrera calculated that it might be safe for her to act with regard to the reports relating to Flores. She suspended Flores’ contract, pending an investigation into the charges leveled at him by Hertz and others. Within two weeks, Kerr was more or less recovered from the injuries he had sustained in his motorcycle mishap. Herrera’s gamble in crossing Kerr and Woodard in suspending Flores had come up snake eyes. Within days of Kerr’s return, she was out as city manager. Before the council moved to fire her, she resigned and returned to her position as city clerk. Flores remained on suspension for only a few more days. With Herrera no longer in the city manager’s post, the investigation into Flores dissolved in upon itself.
The city council brought in Mike Milhiser, who had retired after a 28-year career as city manager in Montclair, Ontario and Upland, to take over the reins of the city in the aftermath of Herrera’s banishing back to the city clerk’s office.
In May 2017, the council reaffirmed Flores in his position as contract economic developer and more than doubled his pay to $75 per hour, by which he was able to pick up $6,000 per month for part time work, doubling his salary from the city and allowing him to collect as much as he could negotiate from outside companies, including ones obtaining permits to set up operations in the city. At that point, what was recognized by many was that federal agents – in the form of those with the Drug Enforcement Agency, the Securities and Exchange Commission and the FBI – were trolling Adelanto, looking into reports of graft including whether Flores was conveying payoffs from city business permit applicants to city officials, if insider information being conveyed to investors, as well as the operation of what federal officials considered to be illicit drug production and distribution enterprises. Blithely, however, the council majority moved forward with the agenda of enabling as many marijuana-related businesses as possible to set up operations in the city, often without meeting the requirements in the city’s regulations and ordinances.
In July 2017, Curtis Wright, perhaps spooked by the presence of federal law enforcement officials in the city, made his exit from Adelanto. The city replaced him with Ruben Duran of the law firm Best Best & Krieger.
As a retiree pulling a pension from the California Public Employees Retirement System, Milhiser was legally permitted to work as a contract municipal employee for no more than six months in any 12 month period. Accordingly, the Adelanto City Council in August 2017 upon Milhiser’s departure elevated Gabriel Elliott, who at that point was the city’s director of development, to serve as city manager.
Less than three months into Elliott’s tenure as city manager, City Hall and all of Adelanto was rocked with the FBI’s arrest of Councilman Jermaine Wright on November 8. That arrest was based on an arrest warrant prepared by the U.S. Attorney’s Office in which it was alleged that Wright had taken a $10,000 bribe from an undercover FBI agent who had made an application with the city to establish a marijuana distribution company in return for shielding the agent’s putative company from city regulations and code enforcement efforts and that Wright had also solicited another undercover FBI agent to take part in an arson plot to destroy Wright’s restaurant so he could collect on a fire insurance policy he had on his business.
In the aftermath of what befell Wright, both Kerr and Woodard remained intent on proceeding with approving all of the cannabis-related business proposals pending at City Hall and facilitating the operations of those already approved. Elliott, however, was proving resistant to their demands in this regard. Moreover, the ruling coalition had lost the third crucial steady vote it had in the personage of Wright, and Glasper, who had evinced lukewarm support of the game plan to spur the local economy and create a taxing windfall for the city by permitting cannabis-based operations, was so shaken by Wright’s arrest that he was not willing to supply the third vote the coalition now needed to stay the course. By December, Kerr was beside himself with rage toward Elliott for thwarting his agenda. He began casting about for some means of removing him as city manager. He prevailed upon two female employees and an intern to lodge sexual harassment complaints against the city manager. A few days later, with the city gearing up to carry out an investigation into those charges, the council voted to put Elliott on paid administrative leave. Simultaneously, another intern alleged she had been sexually harassed by Kerr. The city moved to bring Milhiser back to serve as the interim city manager during Elliott’s absence. By late February, those investigations carried out by investigators recommended by then-City Attorney Ruben Duran were returned with conclusions that the charges could not be sustained. While Kerr pronounced that he had been vindicated by the findings, neither he nor Woodard were willing to vote to end Elliott’s suspension. By that point, Wright, who had remained in federal custody from the time of his arrest, had been removed from his council position on the basis of his having missed all of the council’s regularly scheduled meetings for a period of 60 days. The council deadlocked 2-to-2 on the vote to restore Elliott, who remained on leave collecting his full salary.
In May, Milhiser was again obliged to step down as interim city manager because of the limitation on the number of hours he can work on an annual basis, and with the discussion of the disincorporation of the city once again rife, the city council voted to appoint Brad Letner, a retired U.S. Army lieutenant colonel who as a military officer had carried out a number of administrative and managerial assignments before leaving the service in 2014, as city manager.
Elliott remained in his forced state of limbo. A special election corresponding to the June Primary election was held to replace Jermaine Wright. Joy Jeannette, who had previously been appointed to the planning commission by Woodard and is one of Kerr’s political allies, emerged victorious in that contest. Almost immediately after Jeannette’s swearing in to office, she joined with Kerr and Woodard in firing Elliott. Three weeks later, the newly-formed council majority likewise cashiered Letner and promoted Flores into the city manager’s post. Less than a month later, on August 20, Flores fired Herrera. Immediately thereafter, Duran resigned as city attorney. He has been replaced by Keith Lemieux.
Relatively early on, as city employees were fired as a consequence of their failure to act with alacrity to the council majority’s demands that they facilitate the wholesale permitting of cannabis-related businesses, lawsuits on behalf of those terminated employees were filed.
Among the first of those to strike back with wrongful termination suits were public works superintendent Nan Moore, who had been with the city for 18 years when she was given the axe in July 2015; senior management analyst Mike Borja, who had been with the city for ten years when he was keelhauled at the same time; and conservation specialist/administrator Belen Cordero, who had been with the city for 17 years when she was fired in the December 14, 2016 massacre. Another early victim of the purge of employees was public works maintenance worker Jose Figueroa, who also sued. One-time Senior planner Mark de Manincor, another victim of the December 14 sackings, has likewise filed suit.
Adelanto Community Safety Manager and Chief Code Enforcement Officer Steve Peltier along with four city code enforcement officers, Roman Edward De La Torre, Apolonio Gutierrez, Amber Tisdale, and Gregory Stephen Watkins have lodged written complaints with the city, alleging Kerr and Flores have acted to shield certain cannabis-related businesses from monitoring and enforcement. In essence, this has preventing the code enforcement division’s employees from doing their jobs, the officers say, as they were instructed to refrain from inspecting or citing certain facilities and were told not to enforce specific city codes upon pain of termination. When the code enforcement team pushed ahead in carrying out its function, those employees allege, the business operators they were confronting directed them to speak with Kerr and Flores, in so doing indicating the mayor and former economic development director/current city manager had offered them assurances that they would not be cited for any shortcomings by the city’s code enforcement division. The officers have alleged that Flores assigned one of their colleagues, Derek Stevens, who is the son of Mike Stevens, the city’s official spokesman, to “special assignment” status that allows him to review and then vacate any citations the five had issued. Peltier, De La Torre, Gutierrez, Tisdale and Watkins all indicated that individuals and companies connected to Kerr had their citations vacated. All five appear to be on track to sue the city.
This week, the council by a 4-to-1 vote fired two members of the city’s information technology division, several weeks after learning that the two had cooperated with the FBI by providing statements and facilitating the provision of digital information to agents without having been presented with warrants or subpoenas. They are in contact with legal counsel, the Sentinel is informed.
Two of the four former employees/interns caught up in the dueling sexual harassment charges lodged against Kerr and Elliott in December, Adrianna Ortiz, a contract employee, and Rachel Suraci, Elliott’s one-time secretary, are suing the city.
Both Elliott and Herrera have retained former Adelanto Mayor, Tristan Pelayes, a principal in the Riverside-based law firm of Wagner & Pelayes, to represent them. In August, Elliott, through Pelayes, filed a claim against the city, considered to be a precursor to a lawsuit. In that claim, Elliot alleged Kerr actively prevented code enforcement officers from enforcing regulations on a number of marijuana businesses in the city and that Kerr accepted a $200,000 bribe for the sale of the city’s public works building, which contained the city’s emergency operations center, to an entrepreneur who is intent on converting the property to a marijuana cultivation facility. In that claim, he acknowledged having provided the FBI with information about graft in Adelanto. Herrera, who is also known to have cooperated with the FBI, is expected to lodge a claim of her own, to be followed by a lawsuit, soon.
The city is already hemorrhaging red ink in its effort to stay up with the lawsuits filed against it by former employees, as it has retained investigators and law firms to make answers to the suits and mount defenses. In addition to the five different city attorneys the city has employed since 2014, the city has employed at least six other lawyers or law firms. At present, it is using the firm of Jackson Lewis to handle the bulk of the suits involving former employees. The precise amount of money the city has spent on legal issues in the last three years and ten months is not known with any precision, as the city’s financial books are, according to Adelanto Finance Director Misty Cheng, “in complete disarray.” Best estimates are the city has accrued over $15 million in legal costs since Kerr has been mayor.