McBride Reveals SB Leadership Misled Residents In Crafting Bankruptcy Tax

By Mark Gutglueck
Perhaps inadvertently, San Bernardino County Chief Executive Officer Gary McBride this week casually revealed what was long recognized but which San Bernardino City officials have for four years refused to acknowledge to the point of denial, namely that the controversial annexation of the entire City of San Bernardino into a county fire service assessment zone was undertaken as a means of generating revenue through a tax that was not approved by the city’s voters to be used expressly for structuring the city out of bankruptcy.
This week, the San Bernardino County Board of Supervisors sought to redress a series of irregularities in the fashion in which the county and a number of the county’s municipalities have sought to augment their fire department budgets.
Over the last two-and-a-half to three decades, as the unions representing the region’s firefighters have become ever more aggressive in their political activity, salaries and benefits, particularly pension benefits provided to firefighters have skyrocketed. Firefighters’ unions have upped the dues of their members and then invested that money into massive scale political donations, primarily to incumbent officeholders at the city council and county supervisorial level.
Accompanying that generosity, union officials, along with rank and file firefighters, have pressured local politicians to meet their demands for higher wages and increased benefits during collective bargaining sessions. The lion’s share of politicians have supported upping the salaries and benefits of firefighters on a scale of two to three times the pay rate of what firefighters were paid a generation ago. Those politicians who have not gone along with approving those increases have been targeted by the unions for removal from office. In an overwhelming number of those cases the campaigns conducted against those elected officials, utilizing mailers, newspaper, television and radio ads have driven those seeking to hold the line on firefighter salaries from office. Virtually all entry level firefighters working in San Bernardino County’s municipal, county or district agency departments make, with moderate overtime, near, at or over $100,000 per year. Firefighters at the mid-level of experience, such as engineers and captains, pull down $150,000 or slightly more per year. Those who have moved up into the administrative echelon of the department – battalion chiefs, deputy chiefs and fire chiefs –make in the neighborhood of $200,000 or more annually. Firefighters are eligible to retire at the age of 50. Virtually all firefighters who have retired in the last decade after serving a full career in the fire service are pulling pensions that exceed $100,000 annually. In a majority of fire departments or fire agencies in San Bernardino County, the cost of pensions for retired firefighters approaches, equals or exceeds the amount of the budget paid to current firefighters. In this way, the amount of money traditionally budgeted for the county’s fire departments has proven inadequate to cover costs. Consequently, cities or fire agencies have sought options to either defray the increased costs of maintaining a fire department or getting out from underneath the direct responsibility of operating a fire department. The preferred method for local governments in the county appears to be off-loading responsibility for fire services to the San Bernardino County Fire Protection District.
In August 2012, the City of San Bernardino, having endured two decades of consistently dwindling revenues, expenditures drastically exceeding income, and deteriorating financial numbers that resulted in $80 million in unfunded liabilities and a $49 million annual operating deficit, filed for Chapter Nine bankruptcy protection. San Bernardino would not emerge from bankruptcy until two months less than five years later, in June 2017. In the interim, the city engaged in a number of economies intended to streamline its operation, reduce its expenses and bring its income into an equivalency with what it was spending on operations.
In 2015, then-San Bernardino City Manager Allen Parker, in conjunction with then-Mayor Carey Davis and then-Assistant City Manager Nita McKay, considered and then initiated the liquidation of the city’s 137-year-old municipal fire department as part of a cost-cutting measure that would assist the city in its bankruptcy exit plan. The city sought proposals from different entities, which included the county, the Colton Fire Department, the California Department of Forestry and Fire Protection, and the Centerra Group, a Florida-based private company, among others.
Over the course of its bankruptcy, the City of San Bernardino stiffed some 209 of its creditors and vendors for a combined $350 million. Concerned that at some point San Bernardino would skip out on its financial obligations to them as well, both Colton and the California Department of Forestry and Fire Protection refused to get into what essentially would have been a vendor/customer relationship with San Bernardino, and did not follow through with proposals relating to taking on the responsibility for fire service in the county seat. After the San Bernardino County Fire Department and Centerra submitted proposals, the city retained Citygate Associates to evaluate the respective offers. Citygate delivered to Parker its conclusion that a long term service relationship with the county fire division, given all of the existing regional arrangements and the firefighting assets and facilities owned and employed by the city and the county, was the city’s best option. Parker presented Citygate’s findings to the city council in August 2015.
Like Colton and the California Division of Forestry, county officials were leery of putting themselves in the position of being dependent upon payments from the city, an entity which had consistently demonstrated its willingness to ignore its bills. Accordingly, the county was unwilling to simply contract with the city to provide fire services. Rather, the county arranged to have the entirety of the City of San Bernardino – all 61.95 square miles of it – annexed into a fire protection zone previously established in 2006 to serve the desert communities of Helendale and Silverlakes. This zone was designated Fire Protection Service Zone Five, known by the acronym FP-5.
The inclusion of San Bernardino into Fire Protection Service Zone Five entailed the imposition of a $142 per year assessment, subject to a maximum three percent increase, on the city’s approximately 56,000 parcels, calculated to initially generate some $7.952 million per year in revenue under the auspices of the fire protection district. Simultaneously, the city entered into negotiations with the county to pass through the entirety of the city’s ad valorum, that is, property, tax. As part of the arrangement, the county thereupon returned to the city the $7.952 million collected through the inclusion of the city’s landowners into the FP-5 assessment district. Taken together with the more than $3 million to be realized by dissolving the department and by the rediversion of the $7.952 million in assessments back to the city, San Bernardino achieved “an $11 million contribution to solvency,” according to a report by a city consultant, Management Partners, which was assisting the city in mapping its way out of bankruptcy. Nevertheless, city officials bitterly and vociferously denied the suggestion that imposing on the city’s residents and landowners the $142 per parcel assessment was tantamount to a bankruptcy tax or that it was in any way seeking to tax its way clear of bankruptcy. To meet the State of California’s Constitutional requirement that all taxes imposed on residents be approved by those bearing the tax, the city through the County Local Agency Formation Commission undertook a so-called “protest validation” of the deal. Mail-in ballots were sent to the city’s property owners and registered voters seeking a show of opposition. Under the terms of that process, if during the one-month survey period 50 percent plus one of the registered voters in the city returned ballots registering an objection, the dissolution of the city fire department, the takeover by the county fire division and the imposition of the fire service assessment would not take place. If fewer than fifty percent plus one of the city’s voters but 25 percent or more protested, a traditional election was to be held on the question of decommissioning the fire department. In this way, to the extent that a “vote” relating to the imposition of the assessment could be represented as taking place, any voter or landowner who did not participate in submitting a protest was deemed to have voted in support of the annexation; those who mailed in protests were considered to have voted against it. Less than two percent of the city’s voters lodged protests against the arrangement, and the San Bernardino Fire Department, the oldest and most storied of the county’s fire departments, was discontinued as an entity. The ten still-functioning city fire stations remained open, leaving the two fire stations that had in recent years been closed by the city — Station 223 on Medical Center Drive and Station 230 on Arrowhead Avenue — shuttered. The county department augmented those ten stations with service from two existing county stations on the city’s periphery, in Muscoy and Devore. The county deployed 41 firefighters on duty during all shifts, an increase of three from the 38 firefighters the city had per shift at that time. Virtually all of the firefighters employed by the city found positions with the county, and some of the department’s management echelon personnel found employment with the county as well, though most of those were relocated into assignments outside of San Bernardino.
In relatively short order, what had occurred in San Bernardino touched off a round of similar arrangements to have the municipal or community fire departments in Twentynine Palms, Needles and Upland closed out and their function taken on by the county fire division, all similarly under the auspices of Fire Protection Service Zone Five, each involving the annexation of their respective city limits, or in the case of Twentynine Palms its city limits as well as its sphere of influence, into the service assessment zone. In the case of Twentynine Palms, the entity that had previously overseen the local fire department was the Twentynine Palms Water District. It was the water district board of directors that initiated a service annexation application with the San Bernardino County Local Agency Formation Commission to bring Twentynine Palms into FP-5.
In late 2016, the City of Upland began exploring the closure of its 110-year-old fire department in favor of having the county fire division take on firefighting responsibility in the 15.66-square mile, 75,000 population city. When in early 2017 the Local Agency Formation Commission considered the formalized application to do just that, it chose to fold into the proposal the annexation of the adjacent 2.62-square unincorporated county district of San Antonio Heights. When the protest process was undertaken, San Antonio Heights residents, whose fire protection service was already being provided to them by the county through its West Valley Division, found themselves lumped in with the residents of Upland. A primarily residential district, San Antonio Heights is an upscale community featuring a well-educated and relatively sophisticated population of roughly 3,375. Among its landowners and voters, San Antonio Heights overwhelmingly rejected having its jurisdiction brought into Fire Protection Service Zone Five, with more than 60 percent of those eligible to participate filing protests. San Bernardino County’s Local Agency Formation Commission, however, did not tally the San Antonio Heights protests separately from those of Upland residents and property owners. Considered overall, the protest against the combined Upland and San Antonio Heights annexation into FP-5 did not achieve the 25 percent threshold to trigger a traditional direct vote on the issue, let alone approach the 50 percent plus one vote requirement to nix the annexation, which entailed an assessment of a $148.86 per parcel being imposed on all Upland and San Antonio Heights landowners annually, outright.
A group of San Antonio Heights residents, the San Antonio Heights Homeowners Association, retained attorney Cory Briggs to file suit against the city, the county and the Local Agency Formation Commission in an effort to block the annexation. Briggs filed the suit before the July 12, 2017 deadline for the reception of protests of the annexation, pairing with it a petition for a temporary restraining order to prevent the implementation of the shuttering of the Upland Fire Department and the imposition of the special tax while the lawsuit was being litigated. At a July 10, 2017 hearing, Judge David Cohn denied the request for the restraining order, and thereafter the city, county and the county fire department proceeded full bore with the takeover, and by August 1, 2017, the city began implementing the changeover from the City of Upland’s fire department to the county fire district, including changing the logos on city fire trucks, which passed into the custody of the county, along with the city’s four fire stations. Later that year, the assessments were made and collected pursuant to the county’s annual property tax postings and billings.
Despite Judge Cohn’s early ruling rejecting the restraining order, Briggs’ suit on behalf of the San Antonio Heights Association suit survived three attempts by the county, the city and LAFCO to have it dismissed. The lawsuit proceeded apace with a few odd delays. Briggs characterized the maneuver to join San Antonio Heights together with the City of Upland merely on the strength of a request by the Upland City Council, which did not represent the citizens of San Antonio Heights, and have both annexed into an assessment district originally formed for two desert communities lying 47 miles as the crow flies and 66 miles driving distance from San Antonio Heights as a “Frankenstein Monster Tax” cobbled together to get around the tax code and California Constitution that requires a two-thirds majority on a ballot vote before a special tax can be applied. For their part, the Local Agency Formation Commission, represented by Jeffrey Dunn and Daniel Lee Richards; San Bernardino County and its fire division, represented by Donald Wagner and Laura Crane; and the City of Upland, represented by James Markman and Ginetta Gionvinco, asserted that the case of Sunset Beach vs. Orange County LAFCO provided them with the authority to proceed with the extension of the FP-5 Service Zone tax to include Upland and San Antonio Heights. In the Sunset Beach case, that small community was compelled to pay the assessments previously approved by residents of Huntington Beach, after Sunset Beach was absorbed by, that is annexed into, the City of Huntington Beach, which was contiguous to Sunset Beach on two sides.
In his final decision, Cohn held that the Local Agency Formation Commission does not have the authority to annex properties into service zones. Accordingly, Conn averred, the $148.86 assessment on property owners as a feature of fire zone expansion was imposed improperly.
“While the larger annexation of the city and San Antonio Heights into the district is valid, the narrower annexation into the service zones within the district is not,” wrote Cohn in his statement of decision. “Imposition of the tax on the taxpayers within the geographic area that was invalidly annexed to the district’s zones was therefore improper and must be enjoined.” Cohn added that “approving an annexation that is specifically prohibited by law is surely a prejudicial abuse of the agency’s discretion” and that the City of Upland, LAFCO and the county had blurred the distinction between the legally applicable definitions of district and zone in allowing the annexations to proceed and the imposition of the assessments.
While Judge Cohn’s decision was yet pending, the San Bernardino County Board of Supervisors, faced with what the county fire division’s internal auditor said in June 2018 was a $29 million budget shortfall, opened another can of worms in the FP-5 saga. By a 3-to-2 vote with supervisors Curt Hagman, Josie Gonzales and James Ramos prevailing and supervisors Janice Rutherford and Robert Lovingood dissenting, the supervisors followed then-County Fire Chief Mark Hartwig’s recommendation that the county initiate the annexing of 19,078 square miles of unincorporated land in the county into Fire Protection Service Zone Five, carrying with it the implication that as soon as it was ratified, the more than 368,000 property owners in that territory would be subject to a $157 per year assessment. In a ploy to outmaneuver the San Antonio residents who had filed suit over the 2017 annexation of Upland and San Antonio Heights into FP-5, the county included both Upland and San Antonio Heights in the annexation process involving the totality of the county’s unincorporated property.
A protest process for the annexation was held, during which 11,472 verified protest letters, entailing objections by 3.11 percent of the more than 368,000 property owners impacted and representing 1.97 percent of the assessed land value involved, were received. That fell well below the 25 percent protest threshold needed to bring about a vote and the 50 percent plus one vote requirement to prevent the annexation from occurring.
Prior to the board of supervisors’ October 17, 2018 meeting at which it voted 3-to-2 to expand Fire Prevention Zone Five to cover every part of the county that does not fall within municipal city limits, again by the same 3-to-2 margin with Ramos, Hagman and Gonzales prevailing over Lovingood and Rutherford, County Fire Chief Mark Hartwig made the rounds to dozens of unincorporated communities, pitching the assessment district expansion to residents. The $26.9 million to be produced by the assessments annually would keep the county fire division fully funded and both assure and enhance public safety, Hartwig said. In the process of seeking to justify the expansion of the assessment district, Hartwig raised the ire of tens of thousands of county residents through his suggestion that the “modern trend” was toward augmenting historic modes of funding for government function with another layer of “special” tax to enhance fire protection service. Hartwig’s contention ignored entirely the reality of the extensive escalation of firefighter remuneration over the last generation that was the primary factor involved in fire departments no longer being able to function within their allotted budgets. Moreover, it glossed over the consideration that the money many of the cities previously expended from their general funds to run their fire departments was kept by the cities after the residents within their boundaries were annexed into an assessment district and the money formerly utilized to run the various fire departments was diverted to other uses, as in the case of San Bernardino to deal with its bankruptcy or in the case of Upland to make up for shortfalls in its pension system. Simultaneously, those cities’ residents were forced to henceforth pay for a basic service – fire department operations – that had historically been a municipal feature. The only exception to this was Twentynine Palms, where the water district previously operated the fire department. The cities’ pocketing of that money and the imposition of the newly created assessments was seen as an expansion of those cities’ and the county’s taxing authority. That ran counter to the principle in the California Constitution requiring that any new tax first be approved by a majority of those to bear the burden of paying that tax.
In January it was announced that Hartwig, who had spearheaded the imposition of the assessment district onto 94 percent of the county’s landmass, would be leaving his post as San Bernardino County fire chief to take on the position of fire chief in Santa Barbara County.
Ever since, discontent with the manner in which county officials, including those with the fire department, the board of supervisors, senior county administration and the San Bernardino County Local Agency Formation Commission, have herded county residents, like cattle, into the FP-5 corral, has grown.
A contingent of county taxpayer advocates, known as the Red Brennan Group, which was named after the late local anti-tax crusader Kiernan Brennan, has sought to contest the expansion of Fire Protection Service Zone Five, inveighing against the county’s and the Local Agency Formation Commission’s action in that regard at every turn, both rhetorically and legally.
Internally, the board of supervisors has split on the fire assessment zone issue as well. In 2015, Janice Rutherford, whose Second Supervisorial District includes San Antonio Heights and roughly two-thirds of Upland, essentially supported the City of Upland and LAFCO in the closure of the Upland Fire Department, the assumption of fire service in Upland by the county fire division and the absorption of Upland and San Antonio Heights into Fire Protection Zone Five. The antipathy toward that action by an overwhelming number of San Antonio Heights residents and a significant number of Upland residents proved to be a major campaign issue in the 2018 Second District supervisor’s race in which Rutherford, despite her incumbency, was able to hang onto the supervisor’s post only by a relatively narrow margin with 53.26 percent of the vote. Her near-loss chastened Rutherford considerably, and on several occasions since then she has sought to warn her board colleagues that the use of the protest process stratagem, which does not serve as a direct vote with regard to the imposition of new taxes on those being called on to bear them in that it defines those who do not vote as being in support of the assessment regime, is likely to generate the enmity of those assessed once the assessments go into effect. Robert Lovingood, whose First Supervisorial District consists exclusively of the lion’s share of the county’s desert region and accounts for roughly three quarters of the county’s unincorporated land and is the representative of the largest number of county property owners subject to the FP-5 assessments, is likewise sensitive to the issue of having residents, essentially against their will and without what in any traditional sense is considered a vote, forced into a taxing arrangement. Rutherford and Lovingood ran head on into Hagman and Gonzales, whose Second and Fifth districts are largely urbanized, as well as the Third District’s Ramos. The Third District, which extends into an extensive portion of the county’s unincorporated desert and mountain areas, nevertheless has a population that largely lives in the established and incorporated municipal communities of Big Bear Lake, Grand Terrace, Yucca Valley, Loma Linda, Barstow, Twentynine Palms, Yucaipa, Redlands and eastern San Bernardino. Most, though not all, of the citizens of those towns and cities are not impacted by the FP-5 arrangement. However, when Supervisor Ramos was elected to the California Assembly and replaced by Supervisor Dawn Rowe, there was a shift in FP-5 tectonics. While Ramos’ tendency was to quickly accommodate the fire lobby’s wishes, Supervisor Rowe was somewhat more sensitive to the distress cries of Third District landowners.
By mid-year, it was growing obvious that the board was facing a near revolt of a significant number of county residents and property owners. After contemplating various strategies for dealing with the matter, on June 11, the supervisors, who were without the services of Hartwig to stand between them and the multitude of insurgents, made a gesture toward placating the growing legions of discontented county residents, asked county staff to offer options to replace the assessments, including possible tax measures that could be put before voters by January 2021, as well as to specify an expiration date for the assessments.
This week, on Tuesday September 24, the board of supervisors had on its agenda an item relating to discussing potential alternatives, including tax measures that would be voted upon in the traditional sense, to the $157 per year special tax that was essentially imposed by board fiat upon upwards of 94 percent of the county’s landholders under the extension of the FP-5 regime.
After orienting the board and the public to the issue, San Bernardino County Chief Executive Officer Gary McBride had San Bernardino County Fire Chief Don Trapp, who is serving in an interim capacity while the county is conducting a recruitment drive to replace Hartwig, provide a presentation with regard to FP-5. According to Trapp, Fire Protection Service Zone Five’s projected total revenue, including the $26.9 million to be produced by the expansion of the zone, would total roughly $41.5 million per year at present.
He said that there would be drastic cuts to fire division services countywide if the revenue generated by the assessments is not available to the department. A likely impact, he said, was that at least nine and as many as 17 county fire stations would be closed. Furthermore, he predicted, response times would rise, most notably in a remote area of the desert where a response time increase of nearly an hour would likely result.
Trapp said that an infusion of funding to the county fire department was needed because his department is increasingly seen by dispatchers as a “responder of first choice. Whether for homelessness, substance abuse, mental health, routine access to healthcare, many people are calling 911 today for basic services,” he said. He said the department finds much of its time and efforts monopolized by what turn out to be essentially non-emergency or non life-threatening situations.
Before the board’s discussion took place, droves of county firefighters and their allies, including union officials, alarmed at the prospect that a reversal of the imposition of the Fire Protection Service Zone Five assessments might include a firefighter salary and benefits reduction component, weighed in during the public input session of the hearing. Fastidiously, they made no mention of their generous salary and benefit packages, but did seek to cast the parameters of the discussion as ones relating to public safety, with a central tenet of their collective messages being that many residents would be endangered by fire station closures that would ensue from the erasure of the Fire Protection Service Zone Five expansion.
“Let’s be clear, a vote to eliminate FP-5 is a vote against resident safety,” said San Bernardino County Firefighter Kenneth White, speaking as a member of the union that represents him and all of the county’s other fireman, Professional Firefighters Local 935.
Firefighters said the county should keep Fire Protection Service Zone Five intact from top to bottom, with no exceptions made for any of the county’s unincorporated communities, San Antonio Heights included. No fee exemptions should be granted to any county landowners or residents outside of the 24 incorporated cities and towns in San Bernardino County, they insisted. Those that were seeking fire fee exemptions are freeloaders, the fire union members suggested, and those unwilling to shoulder their fair share of the cost of providing fire services are selfish.
Jim Grigoli, the president of the San Bernardino County Professional Firefighters Local 935, insisted that the expansion of FP-5 “wasn’t spur of the moment” and that it was a sensible effort to ensure “stable financing sources” for the county’s fire safety operations. He said the county’s reliance on spotty general fund money on an annual basis had the county fire division “literally begging for our existence every year.” He said the county should not limit the source of its fire division funding to the county general fund, which has commitments to other programs that will be shortchanged if the fire department is adequately endowed.
“If you’re going to give us general fund money, you’re going to have to take it away from somebody else,” Grigoli said. He called FP-5 “fair and equitable” and claimed that the Fire Protection Service Zone Five expansion had been implemented with just over one percent of those subject to the assessments protesting it. Grigoli lionized the county’s firefighters who are doing an admirable job of keeping the county safe with what is already an inadequate amount of funding.
One firefighter offered his opinion that it would be “reckless and irresponsible” for the board to reverse the FP-5 expansion.
Rick Denison, a Yucca Valley Councilman, said undoing the Fire Protection Zone Five arrangement “would erode the service delivery of public safety.”
Two Adelanto city officials, Mayor Gilbert Reyes and City Manager Jessie Flores, indicating that their cash-strapped city is looking for a way of getting out from under the burden of funding its fire department’s operations. Adelanto’s representatives intimated they were contemplating an application to extend FP-5 to include Adelanto’s city limits. The functional effect of that approach would impose on their residents assessments without giving them the opportunity to opt out of them through a traditional vote. They urged the board of supervisors to keep the expanded Fire Protection Service Zone Five intact and preserve their city’s ability to participate under its aegis through a protest process.
One of the few voices heard advocating against the perpetuation of the FP-5 expansion during the public input section of the hearing was that of Tom Murphy, the spokesman for the Red Brennan Group. Surrounded by a gaggle of hostile firemen who saw him as a threat to their pay rates and benefits, Murphy reminded the board that at its June meeting when it had scheduled an eventual discussion that was taking place that day, the intention was “to review the slate of options and determine which they would place on the ballot prior to January 1, 2021 and [provide] a recommended date when FP-5 would sunset. I did not hear that in the presentation. I feel like in terms of the staff work, you guys weren’t given what was promised and what was asked for.”
Murphy suggested the board as a whole was functioning as advocates for the county’s employees rather than representing the residents of the county who had elected them.
“What this issue is about from the perspective of the people in the unincorporated areas, although obviously fire department funding is integral to the argument, the bottom line issue here is taxation in accordance with the California Constitution,” Murphy said.
Supervisors Josie Gonzales and Curt Hagman emerged during the board discussion as the two elected officials most adamant that the expansion of FP-5 was justified. Both supervisors’ believed that county residents of unincorporated areas needed to pay for fire protection in a manner above and beyond what they have historically paid through their property tax, which previously fully funded the provision of fire protection service. Both suggested that the residents of the county’s remote areas should accept that they needed to pay for the continuation or preservation of fire protection service in the same way that residents in other areas of the county, such as Upland, San Bernardino, Twentynine Palms and Needles had accepted the imposition of the FP-5 tax.
When Supervisor Rutherford made the point that the Local Agency Formation Commission had simply inserted San Antonio Heights into the application for county service takeover by the expansion of Fire Protection Service Zone Five when the Upland City Council made its application on behalf of that city, Gonzales asked, “How was Upland having a city council any different from San Antonio [Heights] having the board of supervisors?”
“It’s an absolutely fair question,” said Rutherford. “It’s something we have to consider.”
“That’s right,” said Gonzales, interrupting her. “It has to be discussed.”
Rutherford continued. “But when it was before LAFCO [the San Bernardino County Local Agency Formation Commission], it was placed there by the Upland City Council,” Rutherford said. “This body [the board of supervisors, which represents San Antonio Heights as an unincorporated county area] didn’t vote to put the Heights in there. LAFCO did that on their own, without me as a representative of the Heights there, and they voted without the community having been given the opportunity to have a say.”
“That is true,” said Gonzales, “but LAFCO in itself is a legitimately recognized agency with powers of authority already granted to them to be able to make this decision.”
“I believe their process was flawed,” said Rutherford. “I don’t believe the people of the Heights…”
“Whose process?” Gonzales said, interrupting Rutherford once more.
“LAFCO,” Rutherford responded to Gonzales. “By throwing the Heights in with the Upland annexation, the residents of the Heights were not given adequate time or notice to come talk to this board or LAFCO about being included. So I think we need to go back and remedy that.”
Gonzales was insistent that all county residents have to “pay for services,” meaning specifically fire protection services, despite the property taxes they were paying in previous years having been adequate to cover those services. Gonzales then referenced the potential that cities in the county that currently have their own fire departments may some day want to ditch their departments in favor of having the county fire department fight fires in their jurisdictions. Her suggestion was that preserving FP-5 as an entity would facilitate that eventuality.
“We are hearing from the cities that are already part of the annexation or proposed additional expansions,” Gonzales said. “They play a critical role whether they don’t need our services now, but may need them later.” She said the continuation of Fire Protection Service Zone Five creates the possibility of “flexibility. That needs to be discussed and included.” She suggested the board should not be second guessing LAFCO or its decision-making process. “That agency has the ability to make decisions,” she said.
For his part, Hagman appeared to have forgotten the poignant issues that had led to the board scheduling what became this week’s discussion and hearing.
“I don’t believe in the discussions we had, whenever that board meeting was, at least in my mind, we weren’t talking about anything but FP-5 expansion at that time,” said Hagman. He then sought to steer his colleagues away from addressing the Fire Protection Service Zone Five expansion issue directly, asking, “If that’s the consensus of this board?” The county should simply brass out whatever protest there is about the expansion of FP-5 and the fashion in which it was carried out, which did not involve a traditional vote on the matter, Hagman opined. “I understand that San Antonio Heights [residents] are not happy with the process,” Hagman said. “Many of the residents of the cities are not happy with the process, but that’s a separate action than what the board did for the expansion.”
County Counsel Michelle Blakemore, the county’s head in-house attorney, said that Judge Cohn’s ruling, which the county has appealed and which has yet to be ruled on by the appellate court, invalidated the collection of the assessments from San Antonio Heights in fiscal years 2017-18 and 2018-19, but that the action the board took last October in loading all of the city’s unincorporated areas and the City of Upland and San Antonio Heights into FP-5 means that going forward San Antonio Heights is legally bound as being within Fire Protection Service Zone Five.
Nevertheless, Blakemore indicated, a mixed set of appellate court decisions for the most part have sided with voters having the right to vote on the formation of community facilities districts that involve the imposition of assessments.
In its discussion, the board considered not taking any action at present, but putting a decision off to some point in the near future when the appellate court has ruled on the county’s appeal of the San Antonio Heights lawsuit and a permanent county fire chief is in place and up to speed on the issues facing the county fire department. It also contemplated making substantial cuts to county fire department operations to bring the cost of operation into compliance with available revenue. It further considered calling off the FP-5 expansion and replacing the $27.9 million that would come its way from the expansion with an infusion of money taken from elsewhere into the general fund or creating some alternate form of taxation.
Both Rutherford and Lovingood were pushing for the board to back off of the Fire Protection Service Zone Five expansion and find some middle ground in which the county went to its residents and voters via a traditional vote, rather than a protest process, informing them of the funding gap and potential for service level reductions ahead of time, to see if the residents will willingly agree to a taxing arrangement to ensure public safety in the areas served by the county fire department.
Hagman was not prepared to do that.
“I’d like to suggest to my colleagues that no matter how ugly the sausage was made on the LAFCO-approved annexation, all the previous stuff, that’s going through litigation,” Hagman said. “What you’re asking for, Janice [Rutherford], that’s in the courts right now, for San Antonio Heights. Let’s at least get that assurity that we’re not messing with that, and we can talk about the FP-5 expansion.”
Gonzales still seemed determined to keep the taxing regime in place. She said the issue should boil down to to “How do we salvage FP-5?”
County Chief Executive Officer McBride said the county could not simply withhold essential services from the county’s residents because they are not willing to take on a greater tax burden. “It’s tough to say that if they don’t want it they’re not going to get it,” McBride said.
Gonzales then sounded resigned to having a vote and living with the results if the passage of the Fire Protection Service Zone Five expansion is not forthcoming. “Either property owners are willing to pay to have expeditious response time, or not,” she said.
At one point the board involved itself in a discussion of whether the county by taking on the responsibility of providing fire protection service to an existing city might end up accruing a portion of the cost of providing that service if the city proved delinquent in making its payments to the county. Supervisor Robert Lovingood asked if “that would require that they [cities] are fiscally sound when they make the application [for annexation into a county fire service assessment district]? Would that require that the entity is fiscally sound when they make the application [for annexation]?”
In his response, McBride let go of information that essentially confirmed that City of San Bernardino officials were purposefully prevaricating four years ago when they were insisting that the arrangement to place San Bernardino into Fire Protection Service Zone Five was not being done as a means of creating a taxing regime and thereby effectuating a convoluted transfer of revenues to redress that city’s bankruptcy. McBride told Lovingood, “No, not if they were asking the board to come into FP-5, because like happened with the City of San Bernardino when they used the generation of FP-5 revenue to not transfer as much of their general fund or their property tax money, so they did a kind of a combination,” McBride said. “That’s what allowed the City of San Bernardino to solve their bankruptcy program, largely. And Adelanto could do a similar thing, if the fire board was willing to go through a process to put them into FP-5 simultaneous with the LAFCO action.”
McBride did not, apparently, understand that his candid response contradicted a slew of statements San Bernardino city officials had made throughout 2015 and into 2016. Similarly, McBride did not seem fully attuned to the consideration that his statement lends itself to the interpretation that such annexations are a means of creating taxing structures that essentially dodge the California Constitution’s requirement that all taxes be approved by a vote of those upon whom the taxes are to be imposed.
It was that issue precisely which Rutherford picked up on.
“The protest process is not sufficient for creating a new tax,” she said. “That’s why we’re looking for a different process to get it on the ballot, so people have an affirmative vote rather than just a protest process, because the protest process isn’t simple. It’s difficult and complicated and requires extra effort from people. That is why an affirmative ballot measure is the way to go,” Rutherford said.
Ultimately, the board didn’t make any changes to the FP-5 assessment regime, but did direct staff to focus future discussions on the  Fire Protection Service Zone Five expansion area, with the exception of the original Helendale /Silverlakes district plus San Antonio Heights, and provide a status update to the board on November 19. Although no precise commitment was made, it appears that the board is leaning toward allowing San Antonio Heights residents to vote on whether the assessment would apply to them.
Following the meeting, the Red Brennan Group issued a statement.
“Unelected county leadership appears to be stonewalling the county supervisors’ expressed intent,” according to the statement. “At the June 11 board of supervisors’ meeting, Supervisor Janice Rutherford clearly expressed the intent of the motion that was ultimately adopted by the board. To quote from the Supervisor ‘…the board directs the CEO and interim fire chief to explore funding mechanisms to pay for fire and emergency services in San Bernardino County to place before the voters prior to January 2021, and to return to the board within 90 days to discuss funding alternatives as well as a date upon which FP-5 will sunset.’”
The Red Brennan Group’s statement continues, “Rather than complying with the elected supervisor’s direction, county staff missed their 90 day deadline by two weeks, and also missed every deliverable included in the board’s approved motion. Instead, the board was subjected to a detailed analysis of what will happen ‘if’ FP-5 funding disappears. Instead of presenting a variety of well-thought out proposals for the board’s consideration, the county chief executive officer offered a tepid review of the different type of tax vehicles available. Ignoring the June 11 marching orders, county leadership instead placed three ‘policy considerations’ speed bumps in the supervisors’ path. ‘What is the scope of the FP-5 roll back? How much revenue do we try to replace?’ and ‘What tax methodology should we use?’ County support staff should have presented potential solutions to those questions rather than punted them back to the supervisors.”
According to the Red Brennan Group’ statement, “The supervisors fell into the trap. Rather than insisting the county immediately deliver on the requirements of the June 11 motion, the supervisors took the side path and ended up in a bureaucratic ‘slough of despond.’ In consequence, county supervisors merely agreed to limit the FP-5 discussion to the expansion areas, including San Antonio Heights, along with providing a 60-day delay for county staff to dig up more data.” The Red Brennan Group’s statement ended with, “County residents, particularly in the unincorporated areas, need to remain engaged with this issue. They must speak to their supervisors and insist the June 11 FP-5 motion is carried out in accordance with the supervisors’ direction.”

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