A power play by recently-elected and newly-installed Upland Mayor Bill Velto was at least temporarily set back this week, as his effort to appoint himself and one of his political backers to the board of a water company that is slightly more than two-thirds owned by the city was delayed.
The unanticipated snag betrayed what some perceived as a fissure in the ruling coalition that Velto has been laboring with some degree of intensity and a less measure of success to assemble since his election. He will need that governing majority to remain intact if he is to push through with his political agenda for the next two years. The contretemps over the appointment provoked a show of temper and egotism Velto in his two years on the council has, with general success, sought to mask. Nevertheless, at one point on Monday night an outburst he engaged in appeared to threaten a rupturing with the senior member of the council to whom he owes, at least in part, his presence on the council which provided him with the platform to achieve the mayoralty in last year’s election.
Made clear by the confrontation was that at present Velto does not possess sufficient council alliances that will allow him to achieve the leverage of dominance he indicated he felt he is entitled to as mayor.
On Monday night, the council was scheduled to make four appointments to the board of the San Antonio Water Company. The City of Upland has a 93 percent shareholder interest in the West End Consolidated Water Company and a 68 percent shareholder interest in the larger San Antonio Water Company. Both those companies, along with wells owned by the city, are the source of the water the city provides to residences and business through its water department. As a consequence of its better than two-thirds ownership of the San Antonio Water Company, known by its acronym SAWCO, the city has essential control of its seven-member board of directors.
Because the San Antonio Heights Water Company supplies domestic water to San Antonio Heights, the unincorporated county community north of Upland and south of the Angeles National Forest, a tradition of reserving two of the seats on the water company board has been established. Given the city’s control of the water company, in making its selection of the company’s board members over the years, the Upland City Council has sought to designate individuals who are amenable to carrying out the city’s will with regard to the Upland community’s overarching water policy as is formulated by the staff within the municipal water department, which is a division within the city’s public works department.
The city in recent decades has had a pattern of appointing a single member of the city council to serve on the San Antonio Water Company board, and that individual has been charged with keeping the city council and top city administrators informed of how the water company is being managed and run. While there was at one time discussion of appointing all four city council members and the mayor to five of the water company’s board positions, that was never carried out because of concern that in rare instances where a conflict existed between the water company and the city, restrictions in California State Law with regard to conflicts of interest could create a situation in which all five of the city’s elected decision-makers and five-sevenths of the water company’s panel entrusted with making its corporate determinations would be unable to vote, paralyzing both entities. Indeed, a policy against placing even as many as two council members on the company board was adhered to because of concerns that in such instances where a conflict existed, the city would be reduced to having a bare quorum – three members – rendering a decision and the water company board would be in a position of seeing the number of its board members participating in hashing out such matters reduced to five. Moreover, because of the potential for such conflicts existing on a constant basis, the city would need to be on a continual lookout for such legal entanglements, and would need to go to the not inconsiderable expense of having the Upland city attorney monitor city council and company board action with an eye to warding off such conflicts. For that reason, there has long been an informal policy of appointing just one current member of the city council to the San Antonio Water Company Board of Directors, though there has been no reluctance on the part of the city to allow former city council members to serve on the company board after their affiliation with the city as elected officials has ended.
Under Upland’s protocol, as with most assignments and appointments made by the city to municipal commissions and its adjunct committees as well as to regional, intergovernmental and joint powers authorities, the mayor is entrusted with making nominations which are then subject to ratification by the full city council. On Monday night, February 8, the council was set to take up Mayor Velto’s nominations of Cable Airport owner and San Antonio Heights resident Bob Cable and former Upland City Councilman Tom Thomas to be retained on the San Antonio Water Company Board, as their current terms are coming to an end, along with the mayor’s nominations of himself and Dan Richards to replace former Upland Councilman Gino Filippi and Jose Sanchez, as their terms on the San Antonio Water Board are also drawing to a close.
Routinely, in Upland, substantial deference is shown to the mayor, such that his nominations, with very few exceptions historically, are honored and confirmed by the city council.
While half of the four nominations Velto made this week were accorded respect and ultimately given unfettered passage, two of them ground to an intractable halt, each tripped up over somewhat differing principles, both of which nevertheless had troubling implications. The mayor’s initial attempt to bull through with all four nominations revealed a lack of sensitivity on his part that demonstrated him as being in a real and substantive fashion out of sync with a majority of the council. It further exposed the degree to which Velto is testing the waters or otherwise attempting to make headway toward the ethos that prevailed in the first decade of the Third Millennium/21st Century under the rule of Mayor John Pomierski, whose political career ended in 2011 with a political corruption indictment that fetched him a two-year term in federal prison.
At the center of the contretemps Monday night was the confluence of the profit motive and the developmental imperative involved in the real estate industry, in which both Velto and his nominee, Dan Richards, are heavily involved to the tune of hundreds of millions or billions of dollars, and the act of governance, city policy and public control over a resource that is crucial to both Upland’s citizenry and the ability to develop real estate: the elixir of life, water. Thus, coming into Monday night’s meeting, Velto was already up against the widespread public perception that he was embarking on a course that would potentially profit himself, Richards and others similarly engaged in real estate development and sales to the detriment of the Upland residents he represents.
Immediately upon taking up the appointment item at the meeting, which was not held in one physical location but rather conducted by means of a teleconference in compliance with Governor Gavin Newsom’s restriction on large public gatherings as a means of limiting the spread of the coronavirus, Velto initiated his presentation by defending his appointment of himself and Richards, and asserting what he was attempting to do was on the up and up.
His first gesture that direction was to inform the council and the public that he would make no money – directly – by serving in the capacity of a San Antonio Water Company board member.
“I’m waiving any stipend or compensation I receive and contributing it to a charity,” he said of the pay provided to the members of the San Antonio Water Department Board of Directors. “I’m not taking any compensation for my role.”
He then couched his appointment of himself and Richards as part of an effort to protect the city and the water company by merging their oversight as much as possible, and lauding Richards as an asset to the community.
“I reached out to community members I thought had some interest in this,” he said. “I wanted to make sure that council members are part of the water company and Mayor Pro Tem [Rudy] Zuniga is there. I felt that myself being there and that Dan Richards, whose companies have invested half of a billion dollars in our city, was a qualified candidate with an extremely beneficial business background.”
To Velto, Richards’ success in the business world recommended him to the position. There are others who have drawn the opposite conclusion.
In his mid-20s in the 1970s, Richards worked as a haberdasher. By the early 1980s, he embarked on a career in real estate and real estate management, having gone to work for Jim Smirl and Smirl’s Vanguard Builders. A resident of Rancho Cucamonga, Richards ran successfully for a position on the Foothill Fire District Board of Directors. With his fellow board member, Steve Wheatley, he formed Stephen Daniels Commercial Brokerage, Inc. in 1983. In this capacity, he became involved in the upkeep, selling, buying and leasing of property. His experience as an elected official with the Foothill Fire District, which oversaw the fire department in Rancho Cucamonga until the district was subsumed by the city in 1989, gave him practical lessons in the function of government, and brought him into close contact with other elected officeholders as well as city officials, including city managers, planning directors, community development directors and public works directors, and an ease-of-presence among political operators and the region’s movers and shakers.
Richards became heavily involved politically, eventually becoming a member of both the San Bernardino County and California Republican Central Committees.
With Jeff Burum, Andrew Wright, Ray Crebs and 19 other investors, Richards created the Colonies Partners. In 1997, the Colonies Partners purchased from the San Antonio Water Company Liquidation Trust 489 acres of surplus water-settling property in what is now northeast Upland for $16 million. The Colonies Partners sold 40 of those acres to the California Department of Transportation for $17 million. Caltrans then used those 40 acres to construct a span of the 210 Freeway.
Thereafter, the Colonies Partners, with Richards and Burum as its managing principals, set about in earnest getting clearance from the City of Upland to develop the remaining acreage acquired from the San Antonio Water Company Liquidation Trust for what were dubbed the Colonies at San Antonio residential and Colonies Crossroads commercial subdivisions.
Using his political connections and know-how, Richards utilized the money available to him and his associates to take political charge of Upland by supporting – indeed sponsoring and promoting – the election of John Pomierski as mayor in 2000. Because Upland had gutted its community development, planning, engineering and public works departments in 1998, Richards and Burum found themselves asking the city to welcome within its municipal limits development projects it was completely unequipped to oversee or regulate. Richards and Burum arranged for the city to hire contract planners and engineers to carry out the city’s accommodation of the development scheme, with the Colonies Partners reimbursing the city for those expenses. This created a circumstance in which the city’s development regulators found themselves in the position of being paid by the development company they were overseeing.
A major issue with regard to the development were the drainage issues that pertained to the project site, ones that were complicated by the simultaneous advent of the 210 Freeway, which created, during rainstorms, sheet flow and water runoff that could inundate the properties involved and those immediately adjacent to them. As the land where the Colonies Partners’ projects were being built was previously used for flood control purposes and was subject to four flood control easements that the San Bernardino County Flood Control District had recorded on the property in 1933, 1934, 1939 and 1962, the Colonies Partners undertook to create floodwater holding facilities on the property to ensure the homes and commercial structures to be built would not be submerged during a deluge.
Because the Colonies Partners’ political support of Pomierski had left him favorably disposed toward the company’s development program and because the city’s land use, planning, community development, engineering and public works officials were being paid indirectly by the Colonies Partners, there came about a lack of clarity with regard to which entity – the city, the Colonies Partners, the County of San Bernardino and its flood control district or the California Department of Transportation – was to be responsible for the flood control infrastructure that would need to be created as a consequence of the development of the Colonies Partners’ residential and commercial subdivisions and the construction of the 210 Freeway. San Bernardino County and its flood control district sued the Colonies Partners over that issue.
At that time, Jon Mikels was San Bernardino County’s Second District supervisor, and his jurisdiction included Upland. Mikels was insistent that any infrastructure built to accommodate the Colonies at San Antonio and Colonies Crossroads developments be defrayed by the developers who would profit from those projects rather than the county and its taxpayers. In 2002, the Colonies Partners, in a strategy directed by Richards, infused then-Rancho Cucamonga City Councilman Paul Biane’s campaign for Second District supervisor with $70,000. Biane defeated Mikels in that election.
When the county flood control district diverted floodwater runoff that originated from the 210 Freeway as well as from land west of the Colonies Partners’ projects into a huge pipeline that had its terminus on the property owned by the Colonies Partners and spilled that water into a 61-acre floodwater basin the Colonies Partners were constructing to hold the stormwater generated on the Colonies at San Antonio and Colonies Crossroads projects, the Colonies Partners countersued the county and its flood control district. After four years of litigation, in November 2006, the board of supervisors voted 3-to-2, with supervisors Bill Postmus, Paul Biane and Gary Ovitt prevailing, to settle the suit with a $102 million payout to the Colonies Partners.
The Colonies Partners in March 2007 made a $100,000 donation to the Committee For Effective Government political action committee that had been set up by James Erwin; in May 2007 a donation of $100,000 to the Alliance for Ethical Government, a political action committee set up by Mark Kirk; a $100,000 contribution in June 2007 to the San Bernardino County Young Republicans political action committee, which was controlled by Paul Biane and his chief of staff Matt Brown; a $50,000 contribution in June 2007 to the Conservatives for a Republican Majority political action committee controlled by Bill Postmus; and a $50,000 contribution in July 2007 to the Inland Empire political action committee controlled by Postmus.
Erwin, the one-time president of the union representing San Bernardino County’s sheriff’s deputies, was one of Postmus’s political associates who in 2007 was hired to serve as assistant assessor when Postmus moved into the office of county assessor in 2007 after being elected to that position in 2006. Between 2004 and 2006, Erwin was working for the Colonies Partners as a consultant to assist the company in settling the litigation it had with the county and its flood control district.
Mark Kirk was Gary Ovitt’s chief of staff.
Biane’s chief of staff, Matt Brown, testified that in 2007, some months after the supervisors had voted to confer the $102 million settlement on the Colonies Partners, he had received a telephone call from Dan Richards offering to make the $100,000 contribution to the San Bernardino County Young Republicans political action committee, and that Richards said he wanted to personally inform Biane about the contribution.
In February 2010 the San Bernardino County District Attorney’s Office in tandem with the California Attorney General’s Office charged Postmus and Erwin with involvement in an extortion and bribery conspiracy relating to the board of supervisors’ November 2006 vote to settle the litigation between the county and the Colonies Partners by conferring the $102 million settlement on the company. In the criminal complaint, Dan Richards and Jeff Burum as the Colonies Partners co-managing principals, Colonies Partners public relations consultant Patrick O’Reilly, Supervisor Biane, and Mark Kirk in his capacity as Supervisor Gary Ovitt’s chief of staff were referenced as unidentified and uncharged co-conspirators. Both Postmus and Erwin pleaded not guilty to those charges.
During the first decade of the 21st Century, the Colonies Partners, led by Richards and Burum, proved to be the most prolific donors to the political funds of San Bernardino County’s elected officials. The money originating with the Colonies Partners and its major and minor principals was provided to those elected officials and candidates both directly to their campaigns as well as indirectly through intermediaries such as political action committees and independent expenditure vehicles. Postmus was provided with over $400,000 by the Colonies Partners and the individuals it counted as its participants and investors. Biane received some $180,000 from Richards’ and Burums’ company. Gary Ovitt and his political team received at least $140,000 from the Colonies Partners and those who composed it.
In March 2011, Upland Mayor Pomierski was indicted by a federal grand jury on bribery charges. Later that month, 13 months after Postmus and Erwin were charged in the bribery and conspiracy case, Postmus entered guilty pleas on all 14 of the felony counts against him relating to corruption on his part while he was in office along with a single drug possession count. An element of his plea agreement was that he would cooperate with prosecutors in their efforts to bring to justice others involved in the conspiracy and criminal wrongdoing he was admitting to.
A month later, in April 2011, Postmus was the star witness before a grand jury. In some measure upon the testimony that Postmus provided, in May 2011 that grand jury issued a 29-count indictment of Burum, Erwin, Biane, and Kirk.
The charges in the indictment superseded the charges filed against Erwin the previous year. Whereas in the February 2010 criminal filing against Postmus and Erwin, prosecutors had listed Richards, Burum, O’Reilly, Biane and Kirk as involved in the criminality that Postmus admitted to, the indictment handed down in May 2011 did not include Richards or O’Reilly.
Immediately after the indictment was unsealed and Burum, Erwin, Kirk and Biane were taken into custody, booked and eventually released on bail, the Colonies Partners and its constituent members, advised by their lawyers, discontinued making political donations, surrendering the company’s position as the most generous underwriter of political campaigns in the county to another developer, Reggie King.
The Colonies Partners spared no expense in assembling for Burum a legal dream team, composed of some of California’s most skilled and competent defense attorneys. Pretrial skirmishing was intense, with defense motions to dismiss the case being heard by Judge Brian McCarville. Judge McCarville granted some of those motions, while leaving other elements of the prosecution’s case intact. Thereupon. there were appeals to the Fourth District Court of Appeal in Riverside by the prosecution to reinstate the charges that had been dismissed, along with appeals by the defense to have charges upheld by McCarville dismissed. After more than a five-and-a-half-year delay during which there were two such rounds of appeals to the Fourth Appellate District and another to the California Supreme Court, the matter went to trial in January 2017 before San Bernardino County Superior Court Judge Michael A. Smith and two separate juries, one panel hearing the case against Burum, Biane and Kirk and the other impaneled to try Erwin.
Handling the prosecution in the main were Supervising Assistant California Attorney General Melissa Mandel and Senior Supervising Deputy District Attorney Lewis Cope.
In May 2017, Postmus was brought in as a key witness for the prosecution, testifying over the course of two weeks. Under direct examination by Cope, Postmus testified that Erwin, who was then working as a consultant to the Colonies Partners, had blackmailed and extorted him into voting in support of the settlement by threatening to expose, while he was at that time serving as the chairman of the board of supervisors and chairman of the San Bernardino County Republican Central Committee, his homosexuality and drug use. He further testified that over the course of the slightly more than seven months after the settlement was made, he, Erwin, Biane and Kirk had been rewarded with $100,000 each in the form of donations made to them by the Colonies Partners through political action committees each of the four had set up for themselves and controlled. However, under cross examination by Jennifer Keller, one of the attorneys representing Burum, Postmus went sideways, and yielded to Keller’s suggestion that he might have been led into implicating himself, Burum and the others in the scheme after he was pressured by aggressive investigators with the district attorney’s office who had exploited his vulnerabilities, in particular his drug-addled and highly suggestible state, to plant false ideas in his mind that he had then recounted to them during further interrogations, before the grand jury and under Cope’s direct examination.
With the Colonies Partners defraying the reported $22 million cost of the defense for all four defendants which involved no fewer than nine attorneys, the trial lasted nearly eight months.
Ultimately, Burum, Biane and Kirk were acquitted of the charges against them and the jury hearing the case against Erwin deadlocked and was unable to return a unanimous verdict. Subsequently, the district attorney’s office dismissed the charges against Erwin.
Postmus, whose sentencing was delayed until after he provided testimony in the case against the others, was ultimately sentenced by Judge Smith to three years in state prison.
After the acquittals and the charges were dismissed against Erwin, the Colonies Partners and its investors/principals have once again begun making political contributions, such that they are now again among the most prolific of political donors in the county.
Last year, after the Colonies Partners had made direct political donations to three of the members of the board of supervisors and indirect political donations to another supervisor, the board of supervisors in November 2020 voted behind closed doors to settle for $65 million another lawsuit the Colonies Partners and Burum had brought against the county over the criminal prosecution and trial Burum had been subjected to. That $65 million wrung from the county was in addition to the $102 million the Colonies Partners had obtained in the 2006 settlement.
On Monday night, Velto told his council colleagues, “I have never done business with Dan Richards. I’ve never done business with the Colonies Group. The company I work for rents space in the Colonies [Crossroads commercial subdivision]. I’ve never done business with the Lewis Companies. I’ve never done business with any developer in this city. My role as mayor is one of integrity and honesty, and I hold this role in very, very high regard, and I know my obligation is to protect the [city’s] investments. I have a fiduciary duty to our residents and that is why I felt that I could maintain that role serving on the board of directors for the water company, of which the City of Upland is a supermajority stock holder.”
Without referencing former Councilman Filippi, whom Richards’ business partner Burum has differences with and whom Velto has accordingly decided not to reappoint to the San Antonio Water Company Board, and Board Member Jose Sanchez whose term is drawing to a close and who is in the process of moving out of state, Velto said he wanted to reappoint both Thomas and Cable.
“That left two positions open,” he said. “That is why I nominated myself as mayor and Dan Richards. I feel that we’re both very qualified as businessmen in the community to provide proper direction and to make sure it’s fiscally prudent and conservative in any investments in the future. I believe that Councilman Zuniga will make an excellent proxy for the city and that’s to continue the path I felt was in the best interest of this city. Everything I’m doing is in the best interest of the City of Upland. There is no control of the water company by any developer in our city.”
First District Councilwoman Shannan Maust, while indicating she had a comfort level with both Thomas and Cable because of their experience on the board and proven track records, said she wanted more information about Richards, remarking that she did not want to “vote blindly. Once on the board, it’s extremely hard to remove a member. It’s a pretty lengthy process.”
Third District Councilman Carlos Garcia indicated he, too, wanted more information, saying the council “did not have much of a chance to discuss this. It is such a specialty field. I don’t know Dan Richards at all.”
Velto’s nominations were revealed on February 4, four days before Monday night’s meeting. On Friday, City Hall was closed, as well as over the weekend. No background material on Richards was provided.
Garcia said he wanted someone with expertise relating to water on the board.
He indicated he was reluctant to push ahead with appointing Richards.
“In a lot of our campaigns we talked about transparency,” Garcia said. “I think opening this up to more applicants, at least for other folks who are very well qualified to submit an application, would fall in line with that transparency.”
Second District Councilwoman Janice Elliott said she had concerns about the appointive “process and conflicts of interest. I don’t like going into this without more information about somebody, particularly because of the fact that Mr. Richards does own so much property in Upland [and] because he is significantly politically influential. That in and of itself has raised additional questions as far as whether or not an appointment of him would make the community more trusting of us as a government. In addition, the difference between a government entity and the water company is the water company does not require form 700s [i.e., statements of economic interest required by the State of California of every elected public official and public employee who makes or influences governmental decisions]. You can tell if they [elected officials who do file statements of economic interest that are publicly available] have a conflict of interest. With Mr. Richards, the water company does not require that. They just use the honor system. If you’ve got a conflict of interest, you’re duty bound to declare it and recuse yourself on that, and I’m just not sure our residents are really comfortable with that. It is really important that we make a good decision.”
When it was suggested that his four nominations be voted on separately, Velto became defensive, in particular with regard to his nomination of Richards.
“I want to be very clear about this,” he said. “There is no political powerhouse with Dan Richards. Number one, he’s a resident of San Antonio Heights. He’s not a political powerhouse. There are other people in this community who are much more political powerhouses, if you might want to use that term.”
That came across as something of a prevarication, given Richards’ status as being a managing partner of the company that has demonstrated itself to be among the top two or three most generous contributors to San Bernardino County politicians historically. Velto was also being parsimonious with information pertaining to the political support Richards has provided him. Richards donated to Velto’s 2020 mayoral campaign $1,000, the maximum amount of money a donor can give to a city candidate under Upland’s campaign donations limitation ordinance. Velto made no mention of Richards’ support of his campaign, nor of the $1,000 provided to him by Richards’ business partner, Jeff Burum, nor the $1,000 provided to him by Burum’s wife, Kellie Burum, nor the $1,000 provided to him by James Previti, who is currently attempting to develop property in Upland owned by the Colonies Partners.
At that point, Councilman Rudy Zuniga, who has emerged as Velto’s firmest ally on the council, sought to reassure the other three members of the council that Richards would have far less pull than what others are crediting him as possessing.
“It’s a board of seven members,” Zuniga said of the San Antonio Water District Board of Directors, “and one person cannot make a change or do something by themselves. It’s a higher number of members than the city council, so, if they have ulterior motives, it’s not very easy for them to do that. I don’t see that any wrongdoing could be done by Dan Richards.”
Garcia reiterated his earlier statement, asking, “In the spirit of transparency, would it be possible to table this and have some opportunities for other applicants to submit applicants and then come back and make a decision? Obviously, if Dan Richards is the most qualified, then by all means [we should appoint him]. I think it would resonate really well with all of our residents if we provided this process.”
Velto, sensing that the council was usurping his role and authority in making the nominations in the appointment process, asserted himself by trying to rally City Manager Rosemary Hoerning to his defense, asking her who made the recommendations with regard to municipal appointments.
“The mayor typically makes the recommendations to the council, and it’s ratified by [the] council,” Hoerning responded.
From there, Velto pushed to make a case that he was being stepped over by his council colleagues.
“So, I want you to just be fair and understanding about that role right there,” he said. Having the council suggest other candidates for the appointment, Velto said, was tantamount to “diminishing [the mayor’s] role.”
Councilwoman Maust, without commenting on the nomination of Richards, took up the issue of having more than a single member of the council on the water department board, pointing out that former City Attorney James Markman had warned of the peril of conflicts between the city and the water company, which, if compounded by multiple council members being on the water board, would result in excess costs to the city of having to pay attorneys to monitor both city and company actions.
“What I’m looking at is a risk management subject in the sense that if we can try to insulate ourselves form a conflict interest, that is what I’d like to do,” Maust said.
Maust told Velto, “My suggestion is if the mayor pro tem [Zuniga] would like to come off the board and you go on as council representation, then we only have one of you still on the board and full representation. But I can’t support having both of you on the board and leaving the three of us to decide for the city and possibly be paying more money because of that monitoring.”
Maust expressed her belief that the field of candidates Velto had given the council to choose from was too limited.
“I think we need to be more diligent in trying to bring in… others, so to speak, into the arena,” Maust said. “I think if we had a better process already instilled, maybe it would have made for better people coming forward. I’m going to motion that Tom Thomas and Bob Cable are appointed to the water board,” she said, pointedly excluding Velto and Richards from her motion.
Zuniga leapt to the defense of the mayor.
“This is a mayor’s appointment,” Zuniga said. “So, I understand the transparency part, but now are we going to ask for each one of us to explain why we’re picking certain people to serve on our committees? This is Bill’s appointment. All mayors have made these appointments, so I don’t feel comfortable taking that away from him or any other future mayor.”
Velto tiraded against those who were objecting to Richards, calling them ‘individuals [who] want to be highly critical of people in our community who have stepped up, not only thorough business, but through charitable organizations and through groups of people who they know who have made substantial contributions to this community. To vilify, to make them out to be a villain of some kind because of their involvement in the community, [to say] they would not do what’s in the best interest of the city is very petty, as far as I’m concerned.”
He then defended the idea of appointing two members of the council to the water company board.
“I disagree with the city attorney saying it’s a conflict of interest,” Velto said. “I call it a protection of interest. I’m speaking from my role only. I want to protect the water company and I believe if we could have all the council members on the water company [board], I would have liked to see something like that. And that’s what I want to look at in the future, which I will have an opportunity to do if we delay this vote.”
He then warmed to the idea of delaying the vote on the appointments, including those of Thomas and Cable, suggesting that the concept of having all of the members of the council or four of the members of the council appointed to the water company board was worth pursuing.
“If the council wanted to delay the appointment of anyone until we get further legal advice as to whether or not we could seat more council members, I would be willing to do that to get more information for the process.”
Councilwoman Elliott said, “We’re not having a conversation as to whether or not the mayor has the right to make the appointment. He does, but it is also in our municipal code that the city council ratifies the decision. So, I’m not going to ratify an appointment without seeing information on that individual, and if two other city council members want to see more information on an appointment, then I think that would be a direction to go.” She then seconded Maust’s motion to appoint Tom Thomas and Bob Cable. That provoked Velto, who said they should consider ratifying all four of his suggested appointments. “We should look at all four,” he said.
It all went to hell from there.
Elliott said she had sufficient information about Thomas and Cable to vote on them.
“Neither of these people are new,” she said. “I have watched them. I don’t need to see anymore background because I know them. She said Thomas in particular had an understanding of water issues.
Velto suggested that expertise with regard to water issues was not an absolute necessity in board members, since they would be supplied with information from the water company’s “trustworthy staff” and would merely vote on recommendations presented to them.
Velto again sought to broaden the discussion to the council considering and ultimately accepting his four recommendations.
Elliott insisted on voting on Maust’s motion.
Zuniga, in attempting to broker a compromise, opened Pandora’s box when he said, “Well, I know you want to see Dan Richards’ qualifications, but are you okay with Bill’s qualifications as a businessman?”
Elliott ducked the question by saying “We’re not on that one right now. We’re on Bob Cable and we’re on Tom Thomas.”
“Well you’re splitting it,” Velto said. “I don’t know if that’s how it’s done.”
“Well, we just did it,” Elliot said. “We’ve got a motion and we’ve got a second.”
That visibly riled Velto, who as the mayor directs the proceedings.
He delayed the vote by asking if there were further comments from the council
Elliot called for the vote and Velto again delayed, asking for comments.
The vote to appoint Thomas and Cable then went forward, with all five approving that duo’s reappointment.
Thereafter, Zuniga immediately made a motion to approve Velto. Garcia seconded it.
That prompted Maust to inquire directly of Zuniga if he was prepared to leave the water company board if a vote went forward and Velto was appointed.
The question seemed to anger Zuniga, which betrayed that he was determined to remain on the water company board. “I’ll have that discussion with Bill,” he said.
Elliott at that point interjected, “I’m not ready to make this decision. With all respect, Mayor Velto, I really don’t know that much about your background.”
Velto’s nostrils flared.
“Do you have a bachelor’s degree?” Elliott asked.
“That’s not the discussion here, Velto said, bridling. “The discussion here is I’m a businessman. I’m a mayor of Upland. The residents of Upland voted for me for mayor. I think they put their trust in my decision-making.”
“Well, I’m not going to vote for you on this board without more information,” Elliott said. “I’d like to know about your education. What’s your educational background?”
“I’ve had some college,” Velto said. “How’s that? I was in the military. I’ve been in business for over 30 years. Actually, from the time I was ten years old I ran my own businesses. I’m a businessman. I make sound fundamental business decisions every single day. I’ve managed a real estate company with 3,500 agents, a multibillion dollar company. I was an executive vice president and general manager of that company. I’m now with Berkshire Hathaway. So, I’m fairly qualified to make business decisions, and that’s what these are. These are business decisions.”
Councilman Garcia inquired as to whether it was advisable for Velto to recuse himself from the discussion of, and vote on, his own appointment.
City Attorney Steven Flower said, “If Mayor Velto has announced that he will be waiving any salary or stipend from any position on the board, that waiver means he wouldn’t have a financial interest in the position. Therefore he wouldn’t have a conflict on this vote.”
Elliot then questioned Velto about whether he wanted a city takeover or buyout of the water company. Velto said he wanted to look into the possibility of bypassing the redundancies in the functions of both the city’s water department and the water company, and to have staff look into the advisability of a consolidation of the two.
With that, Velto was unable to mask his irritation.
“We don’t just sideline something because of personal interest, and it appears you have a personal interest in me not serving on the SAWCO [San Antonio Water Company] board,” Velto said.
When Elliott said she was not personalizing the discussion, Velto thundered, “You are making it personal. You want to know my education.”
Elliott responded, “I want to know your qualifications. Education is part of your qualifications.”
“I’m the mayor of the City of Upland, number one,” Velto retorted. “This is a role that I’m allowed to do, to take on. I’ve been in business for many, many years. These are business decisions based on staff recommendations. I’m not going to go out and test water. I’m not going to go out and measure depths. I’m not going to go out and make sure that the systems are all operational. That’s not the role of the board of directors, just like it is not the role of the city council to manage the city. That’s not what our role is. Our role is to vote for, vote against or make recommendations and that’s all that I do.”
The heat in the exchange between Elliott and Velto was of some moment and even historic significance. In January 2019, Velto was a member of the Upland Planning Commission. His previous efforts to be elected to the city council had been unsuccessful. At that time, the council had been reduced to four, the mayor and three council members. Fifteen residents had applied to fill the vacancy, including Velto. The field was reduced to seven, at which point the selection process had stalled out when no single candidate was able to garner more than two votes. Ultimately, Elliott joined with then-Mayor Debbie Stone and then-Councilman Ricky Felix in supporting Velto. In this way, Elliott played a crucial role in boosting Velto’s political career. The enmity that was brewing between the two over the water company appointments on Monday night was palpable.
Councilman Garcia broke in. “We’re still having an issue,” he said. “I know that Mayor Pro Tem [Zuniga] and the mayor are going to talk about having one person or another on there, so that leaves a little question mark.” Garcia suggested that voting Velto onto the board was “something we could come back to after that discussion… to have one councilperson to represent us there”
“We can postpone this thing, Velto said, resignedly.
“If we’re still up for that, I would like to come back to that,” Garcia said.
Zuniga said, “Mayor, if you want to wait, I will pull my motion.”
Velto said, “I don’t have a problem waiting, This is about making sure we are representing the majority interest of this city. Much like any other committees that I have appointed all of you to, I didn’t sit back and say what were your qualifications to serve on this commission, what was your qualification to serve on that committee. I didn’t do that because your role is to vote for, vote either to approve or deny, the recommendations on every committee or commission we serve on. None of us have extensive backgrounds in all of the committees we’ve been assigned to by me. So, keep that in mind.”
Maust attempted at that point to assure Velto she was not questioning his qualifications.
“When I shared my concern, [it was] not on qualifications,” she said. “It is that I disagree [with] having two council on the SAWCO board because of having to recuse yourself and because it does then take money to have to manage that.”
A clearly perturbed Velto said, “We’re going to delay this.”
Thus, with the Cable and Thomas appointments ratified, the Velto and Richards nominations remain in limbo. Further, the other vote that was scheduled to take place Monday night pertaining to the water company, to appoint Zuniga as the city’s proxy to vote all shares at the annual stockholder’s meeting of the San Antonio Water Company for the slate of directors, did not take place.
“We’re going to delay this to the next council meeting until we get further information from [legal] counsel,” Velto said.
The council is next scheduled to meet on February 22.
Velto Power Play To Elevate Himself & His Sponsor Richards To H2O Board Thwarted
A power play by recently-elected and newly-installed Upland Mayor Bill Velto was at least temporarily set back this week, as his effort to appoint himself and one of his political backers to the board of a water company that is slightly more than two-thirds owned by the city was delayed.