(November 2)  In a ruling that on balance was more favorable to the defense than to prosecutors, the California 4th District Court of Appeal in Riverside on October 31 clarified what issues will be heard when the celebrated Colonies Settlement Political Corruption case goes to trial.
The appeals court, while rejecting a request by prosecutors to reinstate previously dropped bribery charges against the Rancho Cucamonga developer at the center of the case, sided with the prosecution in its request that charges of misappropriation of public funds against the three other defendants in the case that had been dropped be reinstated. In another portion of the appellate ruling favorable to the defense, conflict-of-interest charges against two of the defendants were also dismissed.
The Colonies Settlement Political Corruption case grew out of the November 26, 2006 3-2 vote of the San Bernardino County Board of Supervisors as it was then composed to approve a $102 million settlement of the civil action brought against the county and its flood control division by the Colonies Partners over drainage issues at the Colonies at San Antonio residential and Colonies Crossroads commercial subdivisions in northeast Upland.
Prosecutors allege that earlier in 2006 Jeff Burom, who was with Dan Richards one of the two managing principals of the Colonies Partners, conspired with former sheriff’s deputies’ union president Jim Erwin to blackmail two of the then-members of the board of supervisors, Bill Postmus and Paul Biane, by threatening to reveal in mailers to be sent to voters the former’s homosexuality and drug use and the latter’s insolvency. After the November 2006 vote in which Postmus and Biane joined with their board colleague Gary Ovitt to approve the settlement, prosecutors maintain Burum during the first six months of 2007 delivered four separate $100,000 bribes to Postmus, Biane, Erwin and Ovitt’s chief-of-staff, Mark Kirk, in the form of political donations to political action committees the four had founded or controlled.
Postmus and Erwin were indicted on bribery and extortion counts relating to this alleged scheme in February 2010. After Postmus in March 2011 entered guilty pleas on 14 felony counts contained in that first indictment, he appeared as the star witness before a newly impaneled grand jury that heard a total of 45 witnesses in April 2011. The following month that grand jury handed down a superseding 29-count indictment naming Burum, Erwin, Biane and Kirk, who were charged variously with conspiracy to commit a crime, bribery, conflict of interest, tax fraud, tax evasion, perjury, forgery, and aiding and abetting.
In August 2011, after demurrers were filed on behalf of Burum, Erwin, Kirk and Biane by their lawyers, Judge Brian McCarville granted some but not all of those defense requests to throw out charges based on their lack of clarity or insufficiency, dismissing five of the counts lodged against Burum, two of the counts Biane faced, two of the counts Erwin was charged with and one count pending against Kirk.
The prosecution then appealed McCarville’s ruling to the appellate court to have the charges reinstated. Defense attorneys likewise filed with the appellate court, arguing that all charges that had been tossed should have been dismissed and asserting that McCarville should have sustained more of the demurrers than he actually did.
After nearly a year of consideration, the 4th District Court of Appeal in a 41-page decision written by Justice Art W. McKinster and joined by associate justices Betty Ann Richli and Douglas P. Miller, upheld McCarville’s dismissal of part of a conspiracy charge plus four other counts against Burum, and tossed out a conflict of interest charge against Burum. At the same time, the appellate justices restored some elements of the conspiracy charge along with an aiding and abetting charge against Burum.
In the case of Erwin, the appellate judges dismissed three charges against Erwin that included engaging in a conflict of interest and that he aided and abetted Biane in his reception of a bribe. The court restored one charge against Erwin, that of misappropriating public funds. It upheld McCarville’s denial of a bid to dismiss the conspiracy and two other charges.
For Kirk, the judges denied his request to throw out two charges pertaining to conspiring with Burum and misappropriation of public funds. They also restored a charge that he had improperly lobbied his boss, Ovitt.
Members of the prosecution, including deputy state attorney general Melissa Mandel, declined comment.
Raj Maline, Erwin’s attorney, said that McCarville’s ruling last year taken together with the appellate court’s ruling this week showed that “The prosecutors are having a hard time even coming up with something to allege. That the Court of Appeal knocked out three of the counts against Mr. Erwin shows the prosecution has a problem stating a cause of action in this case.”
Maline said he is not going to appeal the matter any further prior to trial. “We’re eager to get back to the trial court, so we can show the world Mr. Erwin is innocent of these charges. We do not want to delay this any further in the appellate region. We want to get back to the trial court and present our defense. Hopefully that will happen very soon.”
Stephen Larson, the attorney for Jeff Burum, told the Sentinel, “All of the bribery counts have been dismissed against my client. We believe the remainder of the charges are groundless factually as well as a matter of law.”
Larson said he was not sure at this point whether the prosecution will go forward with the case against Burum, but said that if it does, “We will welcome the opportunity to take this case to trial. There are serious legal deficiencies with regard to the two remaining counts against my client. We’ll be asking the trial court to dismiss the two remaining counts.”
Larson added, “We believe this was a politically motivated prosecution from day one. It is entirely improper for any prosecuting agency to allow political motives to affect their prosecutorial discretion. We are looking forward to presenting as complete a picture as possible of what happened and why.”
A petition with a court to dismiss a case prior to trial in California is known as a 995 motion. The Sentinel has learned that two such likely motions will be based on statute of limitations considerations as well as grand juror and prosecutorial misconduct.

(November2)  The two candidates for First District supervisor this week summarized their opposing cases for election, saying why each felt he offers voters a superior choice, touting their own experience and orientation as more appropriate, assailing their rival on his weak points and defending themselves against criticisms each had sustained on the campaign trail.
Rick Roelle, a sheriff’s department lieutenant and town council member in Apple Valley for the last ten years, is facing Robert Lovingood, who since relocating to the High Desert in 1989 has owned and operated an employee placement service. In the June primary, they both outdistanced five other hopefuls who were looking to replace Brad Mitselfelt, the incumbent supervisor who also in June unsuccessfully sought to step up to the federal level by running for Congress.
Roelle boasts the backing of two high powered county public employee unions, the San Bernardino Public Employees Association, which represents some 12,000 county workers and the Safety Employees Benefit Association, which represents county sheriff’s officers and district attorney’s office investigators. The sheriff’s deputies union, known by its acronym SEBA, has infused his campaign with $50,000. The San Bernardino Public Employees Association has given him $50,000.
Lovingood, whose success with his company, ICR Search/Staffing, has left him well fixed, is defraying the cost of some of his campaign, along with modest donations from over 100 backers who see him as a voice that is independent from the public employee unions which many believe to be dominating local governments and preventing needed wage and benefit reform.
Roelle told the Sentinel that he is the best candidate in the race because, “What it comes down to is San Bernardino County needs a change. We need somebody in there with ethics and knowledge of how government operates who is there for the right reasons and not to make money for his friends, who will look after the basic needs of the people he is elected to serve.”
Lovingood said he offers a realistic alternative to Roelle, one who will prevent the public sector from wasting money and burdening the private sector.
“At the end of the day a million dollars is a million dollars, whether it is being spent by government or business,” Lovingood said. “It comes down to who will spend your money more efficiently. In government, money is treated as an endless stream. People are going to learn quickly within the next three to four years that there will not be enough to sustain government and its wasteful programs. People are afraid of government, but it is just like in the Wizard of Oz, in the end it is just a little man behind a curtain with a loudspeaker.”
Roelle said Lovingood is doing fine in the private sector and should remain there. He said Lovingood is inadequate to the task of being supervisor because “He has never been involved in any type of government at all. People can say we want to get away from people who have been in office for years and are continually involved in government but if you are going to be effective and accomplish anything, you have to have a knowledge of how the system works. That is what I offer, experience instead of saying I am a businessman who wants to use government to create jobs. My opponent is saying he is going to create a million jobs. How do you do that with government? You can’t do that with taxpayer money. Government should not be involved in trying to create businesses. The city of Victorville got involved in using taxpayer money to start projects that in the end cost the taxpayers going on $200 million. We should look to the free enterprise system to create jobs.”
Lovingood said his experience in the private sector has prepared him for the duties of being supervisor in a way that Roelle’s functioning as a government employee has not. He said he is not in favor of government creating jobs. He said he just wants government to stop strewing obstacles in the path of businesses that will offer employment opportunities.
“My opponent has never had the accountability of meeting a payroll or the responsibility of knowing that if he doesn’t perform, people are going to lose their jobs and people have to step away and head to the unemployment office,” Lovingood said. “I respect people such as my opponent who work in public safety. They do a job I do not want to do myself but that does not qualify them to be the head of the government and it doesn’t give them an understanding of what  is required to run and administrate a going concern.”
Lovingood said he presents a superior choice as supervisor because he possesses a degree of “understanding” Roelle does not.
“I started here in the High Desert in 1989 and have directly or indirectly influenced bringing in over 30,000 jobs,” he said. “I have contributed by employing people and convincing a number of companies that they should not relocate. I have understanding. Understanding of what employers are faced with. An understanding of what regulation is and what it means. An understanding of the ceilings and restrictions federal, state, county and municipal governments place on a business. Government is not going to create jobs. What we need to do is find a way to remove the government as an obstacle. We have development fees that are killing investment, killing business. We have too high of a price tag for people to develop. I was talking to a developer who wanted to build a housing tract. He had the money to start the project but the government wanted half of a million dollars up front to pay for road improvements. He did not have the money to start his project and construct all of the roads at the same time. This project would have represented economic development and jobs. I say what should have been done is, based on the financials, the government should take 20 percent the first year and 20 percent each year for the next four years thereafter to pay for those roads. We need to get our government out of the way. I have an understanding my opponent does not have. I have a general understanding of how government is in the way. I understand that in government we have a whole host of unsustainable programs and I understand that we have to make some hard decisions of what we have to do away with. I understand that there has to be accountability to go along with that whole process.”
Roelle retorted, “My opponent is somebody who owns an employment agency that provides businesses with temporary employees. That is his only experience. I think my superiority with regard to experience in government is pretty cut and dried.”
Roelle gave his estimation what he considered to be the major challenges facing the county and the First District.
“Basically, the biggest three issues are unemployment, crime and corruption,” he said. “We need to bring investment back into San Bernardino County. For that to occur we have to get rid of the county’s reputation as the most corrupt in the state if not in the nation. We need to reduce crime.  No one will invest in San Bernardino County if we do not make it business friendly, safe and a place where people want to move in and raise families. That is what I would look after if I am elected supervisor. Nothing fancy, just basics.”
Roelle said he has the requisite talents to deal with those problems “I know how crime affects not just individuals but communities as a whole,” he said. “In the time I have been in the High Desert, I have seen it go from one of the nicest communities to live in to bordering on anarchy and lawlessness. As a police officer and my involvement on the town council for two terms I have seen the good, bad and ugly of how the system works.”
Lovington had a different take on what is ailing the county.
“Sacramento has robbed local government point blank,” he said. “The state has taken away our redevelopment authority. We are losing professionals in the 25 to 40 age bracket to other states and other countries. Skilled people are seeing that they can go from a two income to one income family and afford to live in other states and have a high quality of life. There is a professional shortage that is occurring here in the county now and will occur in our nation in just a few years. We are suffering from a lack of professionals in the technical and medical arena. I had a doctor fly in from Kansas and he spent a weekend driving around the High Desert. He did that and said he was not interested in relocating here. Professionals are not interested because of the excessive regulation they encounter here. The atmosphere of overregulation is strangling us in California.”
Lovingood offered a potential solution.
“I don’t want to get ahead of myself, but first, once I am elected, I will work collaboratively with the other supervisors as a united voice and reach outside our community to unify other boards in other counties, convince Democrats to come together with Republicans and say to the governor that the only thing this state is doing effectively is working to eliminate industries and opportunity and innovation for citizens,” he said. “I would work collaboratively in trying to address in one voice what the heart of the problem is, which is excessive red tape and overregulation.”
Lovingood continued, “We need to level the field for the development of our natural resources. People out of our area beyond the board of supervisors are controlling the land use decisions on some of what are the county’s most valuable revenue and tax producing operations, our mines. Mining companies in the First District are some of our most powerful generators of property and sales tax. We need to streamline our land use decision processes. We need to facilitate renewable energy projects. Once the environmental certification is done, they should start turning dirt on those projects in a short period of time. Some have federal funding. Others have private investors. The private investors are confronted with a five-to-ten year window of uncertainty We need to give them that certainty, so they can go into production without hesitancy. If they have $50 million, they can invest it in gold and be pretty certain they will see a decent or even hefty return. If we want investment in our county, we need to give those contemplating putting their money down here that they can get a good return. We need to remove their uncertainty.”
Roelle responded to what is perhaps the major criticism leveled at him at him by both those opposing his candidacy and those who are undecided as to how they are going to vote. Roelle’s major shortcoming, some say, is that he is a dyed-in-the-wool government employee, one backed by the public employee unions, a future recipient of a public employee pension that will total nearly $130,000 per year, and that he is thus disinclined to undertake the public salary and pension reform measures that are the basis of local government’s financial crisis. As Lovingood stated with regard to Roelle’s public union support, “He is a product of the system. His support comes from three public employee groups. When 90 percent of the money you are using to run for office comes from that narrow of a constituency, you are beholden.”
Roelle said, “I have been a policeman for nearly thirty years. Pension reform is happening as we speak. It is being legislated as we speak. Pensions can no longer be spiked. Nothing can stop that reform from going forward. Nothing can stop that. The system will collapse if the reform is not carried out. It is very hypocritical of my opponent to be criticizing the unions that endorsed me when he begged them for the same damn money that they are giving me and now he is begging them to quit giving me that money. I paid into the system for thirty years. Others could go to work for the government and if they want to run it that long they can get a pension, too. I worked for thirty years. I deserve a pension. That is the way the system was. If you work for the government, you get a pension. I am guilty of being a government employee, I guess.”
That upon retiring he will be eligible to draw a pension that provides him with three percent of his highest salary times the number of years he was with the department is irrelevant to the concept of pension reform as it is being instituted now and will have no impact on those reforms being carried forward, he said. “New cops are already getting two percent at 55,” he said. “That was just voted in by the union. Those decisions were already made by law at the state level and the [deputies’ labor] association voted to reduce the pension. How would I get involved in changing that? It is already occurring. From now on, the new cops coming in won’t get three percent at fifty. It is a dead issue. It is not on the table for the board of supervisors to discuss.”
Lovingood similarly sought to face down the most poignant criticism he has sustained during the campaign, which is that he is being supported by current supervisor Brad Mitzelfelt, who was elevated to the supervisor’s post largely on the strength of his ties to now-discredited former supervisor Bill Postmus, who was indicted on political corruption charges and has since pleaded guilty to 14 felony counts. Mitzelfelt was Postmus’ chief of staff and widely perceived to have been aware of or complicit in many of Postmus’s depredations.
Lovington said that in years past he had worked in conjunction with Postmus when he was the duly elected supervisor, and that he has been endorsed by Mitzelfelt in this race. But he said, “There is no quid pro quo. Brad has been supportive. I have not had any contact with Bill for years. If people look at my broad base of support and listen to what I am saying, it should be clear that I am my own person.”
He said coordinating on policy or undertakings with others in office is part of the public process and that he has reached out to those in office for support in achieving his goals.
“I have 110 donors,” he said. “I have the support of the chairman of the board of supervisors, who feels I have something new to offer. I have the support of two of my opponent’s colleagues on the Apple Valley Town Council. That speaks volumes. I have the support of four people on the Victorville City Council and three on the Hesperia City Council. I am willing to work with others.”
Roelle said he will work to improve the circumstances in the First District if he is elected.
“The board of supervisors needs to put an emphasis on quality of life issues rather than staying in office,” he said. “The first government priority has to be the safety of its citizens from domestic or foreign threats. Local government needs to concentrate on ensuring the safety of its citizens and letting the free enterprise system work. Everything will fall into place if we do that.”
Another issue facing the First District, Roelle said, is the “falling home prices. Up to 50 percent of the value of homes has decreased. I think of the High Desert as a blue collar community. We need more emphasis on education to have high technology job opportunities come in here. We need to have an educated and skilled work force. Thirty percent of the people who live in the High Desert have not attended a college class.”
Lovingood said the First District has some advantages it needs to exploit. “Our water rights have been adjudicated,” he said. “We are blessed with a separate air quality management district that is not tied into the regulation of other areas in Southern California. Right now we are exporting a talented work force down the hill we need to keep here and employ here. My goal would be in the next four years to take ten percent of the commuters off the roads. That would take the stress off our infrastructure and it would be better for our families and communities.”

(November 2)  One of the brightest stars in San Bernardino County’s academic constellation was Chino’s Oxford Preparatory Academy. For two years running, Oxford had the highest score of any school in the county on California’s Standard Testing And Reporting exams, in 2011 and 2012. Known by the acronym STAR, the tests provide an academic performance rating or index, known as API, for second through 11th graders in every class, and at every school and district in the state. The tests measure students’ progress toward achieving California’s state-adopted academic content standards in English–language arts, mathematics, science, and history/social science. The results are used for student and school accountability purposes.
Oxford, a charter school that offers kindergarten through eighth grade classes, is sponsored by the Chino Valley Unified School District. It had an Academic Performance Index (API) score of 958 in 2011 and improved to 972 last spring.
But all that has fallen under a cloud, as reports of teacher and administrator orchestrated cheating on the state tests have surfaced against the Oxford Preparatory Academy school in Mission Viejo.
At the Mission Viejo campus, which functions under the aegis of the Capistrano Unified School District, students rung up an impressive 993 academic performance score on the 1,000-point maximum index during the first year the school was open.
Capistrano District officials became suspicious, however, and hired a private investigator, Nicole Miller, and an attorney, Dan Shinoff, to look into the possible inflation of the scores.
The district has drawn the curtain on the matter, which is still under investigation, but the Sentinel has learned that a target in the investigation is Jason Watts, the current chancellor of the Mission Viejo campus who was the principal of the Chino campus at the time of its impressive 2011 academic performance showing. Also under scrutiny is Oxford executive director Sue Roche, who oversees both the Chino and Mission Viejo campuses at a corporate level and has interaction with both instructors, referred to as professors, and students.
Efforts by the Sentinel to reach Roche were unsuccessful.
Allegations that surfaced in the course of Miller’s investigation were that Oxford professors who administered the tests erased incorrect student answers and filled in correct answers before the tests were scored, that the professors pointed to correct answers during testing, that before the tests were taken some of the parents of the school’s poorer performing students were contacted by school officials who asked those parents to have their children excused from taking the STAR test and that Roche engaged in “inappropriate coaching” of students prior to the test.
The Sentinel has learned that some of the students reported that professors had filled in some of the “bubbles” on the answer sheet for the multiple choice questions on the test and some parents indicated they were pressured by school officials to have their children excused from the testing.
The district spurned an offer by Oxford officials to engage with the Miller in carrying out the investigation.
Capistrano district superintendent Joe Farley was unwilling to discuss the investigation or what action the district is contemplating.
Oxford hired its own attorney, Hollis Peterson, to carry out an inquiry into the matter. Peterson on October 24 delivered the results of what she said was “an impartial” investigation into the matter. “No credible evidence was found that testing procedures or test results at the Oxford Preparatory South Orange County Charter School were compromised during administration of the 2012 STAR test,” she stated.
In her report, Peterson said she interviewed Roche and Watts, as well as the Orange County charter campus’s former principal, six former teachers, ten current teachers and eight parents.
Peterson wrote in the report, “There is no credible evidence that the school had a practice of targeting low performing students and then encouraging or pressuring their parents to opt their children out of the STAR testing. Only one parent reported feeling being pressured by a teacher to opt her child out of testing.”
Peterson further reported, “There is no evidence that OPA teachers were walking around during STAR testing and pointing to correct answers on the test.”
And Peterson stated in the report, “There is no evidence that OPA staff members erased incorrect student answers and filled in correct answers on the STAR test.”
In her conclusion to the report, Peterson wrote, “It is this investigator’s opinion that  the numerous and varied teaching strategies, test preparation techniques used at OPA throughout the year, as well as the staff’s heavy focus on teaching standards have yielded atypical results.”
The Capistrano District has not concluded its investigation and did not provide Peterson with access to the witnesses Miller and Shinoff have interviewed.
The Chino Unified School District said it was not yet launching an inquiry into the matter but would await the Capistrano District’s determination before deciding on whether an investigation into the Chino campus of the charter academy’s teaching or test administering activities is in order.

(November 2)   A coalition of environmental groups on November 1 hit San Bernardino County with their  second lawsuit related to the controversial Cadiz Valley Water project.
Los Angeles-based Cadiz, Inc. is the proponent of what it has officially dubbed the  Cadiz Valley Water Conservation, Recovery and Storage Project, which would extract an average of 50,000 acre-feet of water from the East Mojave Desert and convey it via pipeline to Orange and Los Angeles counties for use there.
Instead of applying with San Bernardino County for approval of both the project and its environmental impact report for the water extraction, Cadiz, Inc. succeeded in having Orange County-based Santa Margarita Water District, which lies some 217 miles from the Cadiz Valley, serve as the lead agency for the project application and environmental certification.
Santa Margarita had an interest in the project in that it has agreed to purchase at least 20 percent of the project water. Project opponents  assailed this as an unacceptable conflict of interest. Nevertheless, the Santa Margarita Water Board of Directors approved the project and certified the environmental impact report on July 31.
A month  later,  the Center for Biological Diversity, National Parks Conservation Association, Sierra Club San Gorgonio Chapter and the San Bernardino Valley Audubon Society filed a lawsuit against the Santa Margarita Water District and San Bernardino County, contending the water district should not have usurped the county’s authority to oversee the  environmental review of the project and the county should not have allowed  Santa Margarita do so.
San Bernardino County contemplated but ultimately elected against challenging Orange County-based Santa Margarita’s assumption of lead agency status on the project and entered into a memorandum of understanding with that district and Cadiz, Inc. and its corporate entities over a groundwater monitoring plan to facilitate completion of the project.
On October 1, in keeping with that memorandum of understanding, county supervisors voted 4-1 with supervisor Neil Derry in opposition to approve a groundwater management plan for the project. The groundwater management plan reserved the county’s right to shut the water extraction process off if the water level in the desert aquifer drops below a level deemed inadmissible. Critics, however, said that the monitoring regime would not provide adequate or timely warning of such an exigency.
Even as its previous lawsuit remains pending, the coalition of the Center for Biological Diversity, National Parks Conservation Association, Sierra Club San Gorgonio Chapter and the San Bernardino Valley Audubon Society lodged another suit on November 1 that maintains San Bernardino County failed to provide an environmental review as required by its own groundwater ordinance, which was passed in 2002 to protect the desert’s water supply.
“This shortsighted water grab will benefit those pushing more sprawl in Orange County, but it’ll rob some of California’s rare species of the water they need to survive,” said Adam Lazar, an attorney with the Center for Biological Diversity. “Our desert, the residents of San Bernardino County and Orange County ratepayers all deserve better.”
“We are very disappointed that San Bernardino County has decided to ignore the need for the county to act as lead agency on this project and to complete a full environmental review.  San Bernardino County Sierra Club members expect this minimum level of responsibility on the part of the county,” said Kim Floyd, conservation chair for the San Gorgonio Chapter of the Sierra Club.  “Full compliance with the county’s own groundwater ordinance would seem to be a reasonable expectation but the county has decided that Cadiz, Inc. deserves a ‘free pass’ around the county’s own ordinance.”
“The so-called Cadiz Valley Water Conservation, Recovery, and Storage Project will actually take water away from ordinary citizens and responsible business operations, not just wildlife” said Drew Feldmann, conservation chair of the San Bernardino Valley Audubon Society.
Former government hydrologists from the U.S. Geological Survey have disagreed with the Cadiz consultants on the recharge rate of the aquifer and identified the project as unsustainable over the long term.
The $260 million project would utilize water sufficient for roughly 400,000 people every year and be sold by Cadiz, Inc. to  six water districts in Southern California, all of them outside of San Bernardino County.
The filing on Wednesday is the fifth lawsuit challenging the project. In addition to the suit filed by the same four environmental groups on August 31, the River Branch of the Archaeological Heritage Association filed suit against the county of San Bernardino, Cadiz, Inc., Santa Margarita Water District, the U.S. Department of the Interior, its secretary Ken Salazar, and the Bureau of Land Management, contending both the county and the federal government failed to ensure that federal protocols with regard to the approval of the project were followed, including protection of Native American and historical artifacts on federal land which might be destroyed  or disturbed as a consequence of the project’s pipeline construction.   Delaware-based Tetra Technologies Inc., which operates a brine mining operation on dry lakes in the Cadiz Valley, has also sued San Bernardino County and Santa Margarita Water District, contesting the county’s failure to live up to its land use authority responsibility by allowing the Santa Margarita Water District to serve as lead agency. A group of ratepayers in the Santa Margarita Water District have also filed suit over the project approval, based on concerns that potential defaults and foreclosures on million dollar loans taken out by Cadiz, Inc., could place project liability upon those ratepayers.
Lame duck First District San Bernardino County Supervisor Brad Mitzelfelt, in whose district the project lies, received more than $48,500 in campaign contributions from Cadiz, Inc. before supporting the project and approving the groundwater management plan to facilitate the project. He was defeated in his run for Congress in June, an outcome that was in some part attributed to his support for the project and the exportation of water from the desert.
Project opponents maintain the project would deprive the desert of much needed water for economic development, and environmentalists said the project’s overdrafting of the water will trigger a precipitous decline in the water table that will parch the desert and dry out springs supporting bighorn sheep and other wildlife, and further create dust storms on the valley’s dry lakes.

(October 26)  SAN BERNARDINO—The city of San Bernardino is on the brink of skipping out on pension payments to its retirees.
While pension payments to those who once worked for the city are at this moment still being made, the city, which declared bankruptcy nearly three months ago, is risking draconian action by the California Public Employee Retirement System by not making any of the payments to the state pension system it was contractually committed to make as a participant in the system. No payments have been made since the city’s bankruptcy filing in August.
City officials maintain they are not making the payments because they simply cannot – there is not enough money in city coffers to pay many of its creditors. The city currently is $5.3 million in arrears to the system, known by its acronym CalPERS.
With expenditures and debt outrunning revenue, there is not even a clear consensus among the city’s decision makers about what payments the city should make with its available remaining resources after day-to-day operations are taken care of.
The city council and city management have committed to maintaining the operation of current essential services and making payroll to keep current city staff in place. Other expenses are being put on hold while the city’s creditors are forced to stand in line at bankruptcy court to ensure some portion of payment on that outstanding debt in the future, pursuant to the restructuring of that debt and a federal judge’s orders.
Meanwhile, the California Public Employee Retirement System, which is a vacuum for an increasingly large percentage of city capital, is of the opinion that the contractual arrangement between it and the city is not something that can be attenuated in bankruptcy court. That contract gives CalPERS the authority, or so CalPERS maintains, to assert priority for available remaining city money. Ultimately, if the city’s obligations to CalPERS are not met and met soon, retirement payments to former San Bernardino city workers will cease, CalPERS officials state.
Another major California city that has filed for bankruptcy protection is Stockton. Unlike San Bernardino, however, Stockton is continuing to make its scheduled payments to CalPERS. And while San Bernardino officials are seeking to defer payments to the system, CalPERS officials are inching closer to terminating the plan with San Bernardino, endangering not only the future pensions of current employees but the current pensions of former employees.
According to CalPERS general counsel Peter Mixon, San Bernardino officials are mistaken in their belief that the bankruptcy court has authority over the retirement system, which he said is not subject to bankruptcy protection provisions because it is part of the state government.
“Several public agencies that provide retirement benefits through CalPERS have recently filed for bankruptcy under Chapter 9 of the Bankruptcy Code,” Mixon said. “CalPERS is a creditor of these agencies and of course has an interest in the outcome of these bankruptcy proceedings. CalPERS is, of course, an arm of the State of California. California, like every other State in the Union, has sovereign powers. The United States Constitution created a system of dual sovereignty which divides powers between the federal government and the states. The United States Supreme Court has held on several occasions that certain state laws, which may inhibit the power of a bankruptcy court, are not preempted by the Supremacy Clause.”
Mixon continued, “The drafters of the Bankruptcy Code acknowledged that certain powers have been reserved to the states under the United States Constitution and therefore limit the power of the Bankruptcy Court to interfere with the state’s control over municipalities and state agencies in a bankruptcy case. In enacting section 903 of the Bankruptcy Code, Congress further determined that Chapter 9 of the Bankruptcy Code would not preempt state laws that control the political and governmental powers of municipalities and arms of the state. Congress acted wisely to avoid a constitutional clash by preserving the authority of states over their core aspects of sovereignty in any municipal bankruptcy case. The limitations on the power of the bankruptcy courts extend to the relationship between CalPERS and a participating public agency employer. The relationship between CalPERS and a municipal employer is not a mere commercial contract between a creditor and a debtor. Instead, it is an aspect of the state’s control over a municipality that is protected from interference under constitutional principles and federal bankruptcy law. Accordingly, Chapter 9 of the Bankruptcy Code does not preempt the State of California’s control over the system of benefits provided to its employees and the employees of participating municipalities.
An agreement between a municipality and CalPERS reflects the choice of the municipality to participate in the system. Once a municipality commences its relationship with CalPERS, the municipality is bound by the constitutional and statutory provisions governing the system and the decisions of the CalPERS board of administration  As created by the legislature, the CalPERS pension plan is a trust fund, which consists of the assets that are needed to pay retirement and other benefits that participating public employers have promised to their employees.”
Mixon intimated that if San Bernardino ceases to hold up its end of the bargain it has with CalPERS, CalPERS will be put into a position of having to end its payments to San Bernardino retirees.
“As trustee of the retirement system, CalPERS is a fiduciary and must ensure the integrity of the State of California’s benefits system,” Mixon said. “CalPERS does not have the right to ‘forgive’ or reduce employer contributions which are necessary to sustain the soundness of the system and ensure the payment of promised benefits.
Under the law of the State of California, a participating public employer in bankruptcy may not terminate its relationship with CalPERS through ‘rejection’ of its‘contract’ with CalPERS in the bankruptcy proceeding.”
If San Bernardino withdraws entirely from CalPERS, Mixon said, CalPERS would have the option of ceasing pension payments to San Bernardino’s retirees or in the alternative laying claim to some of the city’s assets and liquidating them in order to continue to make pension payments to San Bernardino city retirees.
“Participating public agency employers do have the right, under California law, to terminate their relationship with CalPERS,” Mixon said. “However, termination of this relationship does not terminate the obligations of the public agency to make contributions to CalPERS to fund benefits accrued prior to termination. Instead, California law provides for a valuation of the assets and liabilities of the employer at the time of termination. Because termination of the relationship essentially closes the pension plan, any unfunded liabilities as of termination must be fully paid by the employer. These amounts are typically much larger than the ongoing obligations owed by the employer prior to termination. Termination by a municipal debtor would create a much larger obligation to CalPERS, which would impair the ability of the debtor to make payments to its unsecured creditors and severely dilute the return to such creditors.  When a participating public agency terminates its relationship with CalPERS, CalPERS is entitled to priority over unsecured creditors under the laws of the State of California. An example of a statute that affords CalPERS a priority is California Government Code Section 20574. This statute provides that CalPERS has a lien on all assets of a municipality to secure all liabilities of the municipality to CalPERS owing upon a termination of the relationship, including any deficit in funding for earned benefits, interest, and attorneys’ fees and other collection costs. As secured creditors are paid before unsecured creditors, this lien creates a priority in favor of CalPERS.”

(October 26)  Having abandoned its federal lawsuit against Cadiz, Inc.’s East Mojave Desert water mining project in favor of seeking administrative relief,   the River Branch of the Archaeological Heritage Association (RiverAHA)  is now seeking a Congressional inquiry and a Security and Exchange Commission (SEC) investigation of the project.
Cadiz, Inc. obtained approval for the plan to extract 50,000-acre feet of water from the desert to sell to users in Los Angeles and Orange counties by having the Orange County-based Santa Margarita Water District, which lies 217 miles from the Cadiz Valley, to serve as the lead agency for the project approval and its environmental certification.  RiverAHA sued Cadiz, Inc. and the U.S. Department of the Interior, its secretary Kenneth Salazar, and the Bureau of Land Management, and the county of San Bernardino over that approval but has since voluntarily dismissed the suit for what RiverAHA founder Ruth Musser-Lopez called strategic reasons. She said there were insufficiencies in the law, such that “Individuals do not have the right to seek judicial action without first going through a lengthy administrative process.”  She and RiverAHA are now seeking a Congressional inquiry into the failure of officials to conduct what she said would be a mandatory federal review of the project’s impacts under the National Historic Preservation Act and the Federal Land Policy and Management Act.  Asserting that Cadiz, Inc. has mischaracterized the availability of water to investors and potential investors with misleading visual displays of snow packs in the east Mojave, that the company downplayed the expense of treating the water, and further wrongfully told investors that the court dismissed her federal claims, she is seeking an SEC investigation.  RiverAHA claims that federal review is necessary for numerous properties eligible for inclusion on the National Register of Historic Places that would be directly impacted by the construction of the Cadiz pipeline on a federal right-of-way issued for railroad purposes.
RiverAHA is requesting the assistance of San Bernardino County Supervisor Neil Derry in obtaining the Congressional inquiry and SEC investigation.   Derry was the sole dissenting vote earlier this month when the county board of supervisors voted to accede to the Santa Margarita Water District’s approval of the project.

(October 26)  A week after the arrest of former Upland city manager Robb Quincey on felony public office corruption and perjury charges, an investigation by FBI agents and district attorney’s office investigators is continuing into several issues at City Hall, including the intrigue surrounding a series of events stemming from Quincey’s involvement in a domestic disturbance incident more than four years ago. The direct and indirect fallout from that untoward July 2008 episode contributed to Quincey’s firing as city manager, the departure of former police chief Steve Adams, the creation of a third captain position in the police department, the promotion of an Upland police lieutenant to captain and the promotion of an Upland police sergeant to lieutenant, as well as suggestions that a law firm that specializes in representing police officers had extorted or blackmailed Quincey into paying it $50,000 in taxpayer money amid an effort to keep the incident hushed up.
Quincey, who had been city manager in Hesperia, was handpicked by then-Upland mayor John Pomierski in March 2005 to succeed Upland’s previous city manager, Mike Milhiser, whom Pomierski together with his then-supporters on the council forced into resigning. Quincey was hired on April 4, 2005 and given a five-year contract with an annual salary of $195,000 and a guaranteed pay raise each January 1 equivalent to the highest percentage afforded any other city executive management employee. Over the five-year span of that contract he was given a series of salary and benefit enhancements such that by January 2011 he was  receiving a base salary and add-ons of $368,529 with benefits of $92,096, for a total annual compensation of $460,625, making him among the highest paid city managers in the state.
Additionally, Quincey was granted extraordinary autonomy and authority as city manager, including what was referred to as a super-bonus, that is, job security in the form of protection from termination on a simple majority 3-2 vote of the council. Rather, to fire Quincey, four votes were required of the council. He was also given the liberty of authorizing payments to city vendors, creditors, or claimants of up to $25,000 per year without first obtaining council authorization.
This last perquisite of his office would contribute to his downfall.
On July 27, 2008 Quincey and his former fiancé, Jennifer Stelzer, became embroiled in a heated argument at Quincey’s Upland home, terminating with Stelzer driving off as Quincey pounded on the hood of her car and kicked her side door panel. Quincey then sent Stelzer three insulting and profanity-laced text messages via their cell phones. The Upland police were summoned and detective Craig Sipple under the supervision of then-sergeant John Moore generated an eight-page police report pertaining to what had transpired. Moore signed off on the report, in which it was recommended that the matter be reviewed by the district attorney’s office for possible prosecution. Quincey contacted Stelzer and persuaded her not to press charges and then sought to have then-police chief Steve Adams intervene in the matter.  Consequently, the eight-page report Sipple originally authored was reduced to six pages and Sipple and Moore’s recommendation that the matter be referred to the district attorney’s office was changed to state that the case was given “Exceptional Clearance. Stelzer does not desire prosecution.” The redrafted six-page version of the report was buried in an inactive police department file that prevented it from being open to public scrutiny. Moore, however, retained a copy of the original eight-page report. When he later applied for one of two open lieutenant posts with the department and was passed over, he retained the services of attorney Dieter Dammeier of the law firm Lackie Dammeier McGill & Ethir  to represent him. Dammeier, in his discussions with Adams and Quincey, maintained his client had been bypassed for promotion because of his involvement in the Quincey domestic disturbance investigation and threatened to make a public issue of the matter and release the report. In response, Quincey and Adams upped the number of captain positions with the department from two to three, promoted a lieutenant into that new spot, thereby creating another lieutenant vacancy, into which Moore was promoted. Dammeier presented the city with a $57,816 bill for his efforts on behalf of Moore. To keep the matter quiet and from coming to the attention of the city council and the public, Quincey used his maximum $25,000 annual discretionary spending authority as city manager to pay Dammeier’s firm in two $25,000 installments, one in the midst of the 2009-10 fiscal year on January 25, 2010, and another shortly after the initiation of the 2010-11 fiscal year on August 23, 2010. Quincey persuaded then-assistant finance director Ruby Carrillo, with whom Quincey was intimately involved, to miscode one of those checks to make it appear that the payment had been made for another police department related matter the city was negotiating with the police union, specifically payment to officers for the time they spent just before their daily assignments donning their uniforms and the time after their shifts ended doffing their uniforms.
In June 2010, FBI and IRS agents served search warrants at Upland City Hall as well as at Pomierski’s home and the homes and offices of Pomierski’s appointee to the Upland Housing Appeals Board, John Hennes, and of Pomierski associates Jason Crebs and Anthony Sanchez. As FBI agents were carrying out that search inside City Hall, Quincey had an impromptu conference with then-city attorney Bill Curley outside City Hall. Quincey related to Curley the circumstance with regard to the domestic disturbance incident involving Stelzer, the Sipple/Moore report relating to it and the action taken by Quincey and Adams to create a third captain position within the police department to open a lieutenant’s slot for Moore. A  panicked Quincey expressed his concern that documents relating to the irregular activity regarding Moore’s promotion might be obtained by the FBI and he inquired of Curley what could be done to head off that eventuality. To Quincey’s chagrin, Curley informed the city manager that he was not at liberty to interfere in any way with the ongoing law enforcement investigation or to assert any kind of privilege over the documents that were at the root of Quincey’s anxiety. Rather, Curley told a now-mortified Quincey, as an officer of the court who had been provided with information relevant to an ongoing criminal investigation, he was duty bound to inform the FBI of what Quincey had just related to him.
Over the next nine months, events would overtake Pomierski, Quincey, Adams, Hennes, Crebs and Sanchez. Shortly after the raid on City Hall, Curley passed along the information he had received from Quincey to the FBI. The FBI then requested from City Hall and the police department a number of documents, memos and emails it had not obtained during the raid. In December 2010, Adams went out on stress leave, never to return to his post as active police chief. In January 2011, the city council put Quincey on paid administrative leave. Later that month, Crebs and Sanchez were indicted by a federal grand jury for their involvement in an extortion and bribery plot involving what was at that point an unidentified city of Upland official. The last week of February 2011, Pomierski resigned as mayor. On March 2, 2011, he and Hennes were indicted by a federal grand jury and charged with involvement in a bribery and extortion conspiracy whereby they were alleged to have shaken down individuals and businesses with project and permit approvals pending at City Hall. In May 2011, Quincey was fired by the city council. In September 2011, Adams officially retired as police chief, ending his ten-month extended stress leave. As of early this month, Pomierski, Hennes, Crebs and Sancez had all pleaded guilty to charges pertaining to the bribery and extortion conspiracy federal prosecutors had alleged against them and had been sentenced to time in federal prison. As part of their pleas, all have agreed to cooperate with the FBI in its ongoing investigation of illegal activity at Upland City Hall.
Eleven months ago, Quincey complicated things for himself when he filed a wrongful termination claim against the city. His civil attorney, Joseph Wohrle, moved to have the matter heard by an arbitrator in closed session rather than in open court. The pursuit of the claim and those hearings provided the city with the opportunity to take Quincey’s deposition, that is, to question him under oath. That deposition was provided to investigators.  Quincey’s case for wrongful termination was heard by arbitrator Sam Cianchetti, who in a decision handed down July 17 upheld the council’s termination of Quincey as justified and rejected in total his pursuit of $7.8 million in damages. Cianchetti dismissed  Quincey’s and Wohrle’s contention that the firing was without cause, that the city council breached the terms of his contract, and that Ray Musser, who succeeded Pomierski as mayor, and councilman Ken Willis defamed him and maliciously and wrongfully characterized his performance in comments they made to the press at that time. Cianchetti further found unfounded the contention that Musser, Willis, Curley, city councilman Gino Filippi and city treasurer Dan Morgan made statements to the press which painted Quincey in a “false light” or  ruined Quincey’s reputation and damaged his future earning potential.
On Friday October 19, Quincey was arrested by investigators from the district attorney’s bureau of investigation and booked at West Valley Detention Center in Rancho Cucamonga on felony charges including unlawful misappropriation of public money, gaining personal benefit from an official contract, and giving false testimony under oath.
The complaint filed with the court by Paul Garcia, an investigator with the district attorney’s office, states that with regard to the first count, “On or about January 12, 2010, the crime of public officer crime, in violation of Penal Code Section  424, a felony, was committed by Robin Dale Quincey, who being a person described in Penal Code Section 424 charged with the receipt, safekeeping, transfer, and distribution of public moneys, did willfully in a manner not incidental and minimal without authority of law, appropriate the same, and a portion thereof, to personal use and the use of another.”
Garcia, in describing the second count, wrote, “On or about January 12, 2010, the crime of conflict of interest, in violation of Government Code Sections 1090 and 1097, a felony, was committed by Robin Dale Quincey, who did, while city manager for city of Upland, California, knowingly and willfully become financially interested in a contract made by him in his official capacity, and by a body and board of which the defendant was a member.“
With regard to the third count, Garcia stated, “On or about June 7, 2012, the crime of perjury under oath, in violation of Penal Code Section 118, a felony, was committed by Robin Dale Quincey, who being a person, having taken an oath that he would testify, declare, depose, and certify truly before a competent tribunal, officer, and person, in a case in which such an oath may by law be administered, to wit, binding arbitration, did contrary to such oath state as true a material matter which he knew to be false, to wit that on January 11, 2010, defendant informed the city council for the city of Upland, California that Quincey ‘was going to be resolving a personnel matter related to John Moore.’”
Thus, according to the complaint, Quincey exceeded his $25,000 payment authority when he provided a second check of that amount to the Lackie Dammeier McGill & Ethir law firm without first getting the permission of the council to do so. He also stands accused of testifying falsely to the effect that he had informed the council of his intent to make that payment. Four of the five members of the city council in January 2010 – Musser, Willis and councilman Brendan Brandt and former councilman Tom Thomas – have all said they were not told of the settlement arrangement with Moore or the payment to the law firm representing him.
Quincey’s attorney, Charles Michael Zweiback, said Quincey “denies all of the allegations relating to the criminal charges filed by the San Bernardino County District Attorney’s Office on October 19, 2012. Mr. Quincey did not misuse public funds and has been the victim of a completely misguided investigation. Mr. Quincey is innocent of all the charges. He looks forward to his day in court when he can present his case and answer these meritless allegations. A full airing of facts will demonstrate that Mr. Quincey acted appropriately at all times in his role as city manager.”
Quincey is scheduled for arraignment on December 20 in West Valley Superior Court in Rancho Cucamonga.
The dragnet in which Quincey was caught was undertaken by the Inland Regional Corruption Task Force, which is composed of agents of the Federal Bureau of Investigation and investigators from the district attorney’s office. That task force is yet pursuing other matters relating to Upland City Hall and the activity of current and former Upland city officials and individuals in contact with those city officials. Among those under scrutiny, the Sentinel is informed, are former police chief Adams, former assistant finance director Ruby Carrillo,  former Upland community development director Jeff Bloom and members of the planning commission who were in place during Pomierski’s tenure as mayor.
Another area of concern for investigators is the involvement of the Lackie Dammeier McGill & Ethir firm with regard to the criminal charges lodged against Quincey. Specifically of interest to both the FBI and the prosecutor’s office’s detectives is under what basis Lackie Dammeier McGill & Ethir made the  $57,816 billing to the city. Lackie Dammeier McGill & Ethir represent the union for  Upland police officers, the Upland Police Officers Association, of which Moore is a member. It is uncommon for an adversary in a legal dispute, either a defendant or plaintiff, to pay the other side’s attorney fees short of an outcome in the case involving those adversaries or a ruling by the court. City officials and investigators have suggested that the circumstance involving Quincey’s use of his expenditure authority to make payment of public funds to the Lackie Dammeier McGill & Ethir firm touched on extortion or blackmail, given that Quincey had an interest in keeping the Moore matter and his oversight of the Stelzer domestic disturbance incident report from coming to light.
Dieter Dammeier, who carried out the negotiations with Quincey and Adams regarding Moore’s eventual promotion to lieutenant, dismissed any suggestion that he or his firm were blackmailing Quincey.
A settlement payment to an opposing attorney, Dammeier said, “is very standard with civil rights retaliation lawsuits. In any litigation the losing defendant would have to pay the fees of the opposite party. In this case, John Moore should not have had to pay the fees because he was the one wronged by Robb Quincey. If we had litigated this to trial the city would have paid fees many times what we collected.”
Dammeier said a defendant’s ability to collect attorney fees in a civil rights action is covered under Section 1988 of the U.S. Code.
As to the suggestion that his law firm was taking advantage of the situation Quincey found himself in by threatening to expose the information contained in the Sipple/Moore report pertaining to Quincey’s verbal altercation with his former girlfriend and the alleged vandalism to her car, Dammeier said, “It was a lawsuit or headed toward one. That is what attorneys do. We are going to sue you unless you fix it. That means we apply pressure to whoever is handing it for the city. It was back and forth between us. There were several phone conversations with regard to what we wanted to settle the case. We went back and forth over it until it ended in a place that was acceptable to John Moore.” Dammeier said that “place” was Moore’s promotion to lieutenant.
Dammeier said he was under the impression that Quincey was consulting with others during the negotiations.
“He said he had to talk to somebody,” Dammeier said. “I’m not sure if it was members of the council or the mayor.”
That the negotiations with regard to Moore did not involve the city attorney was somewhat unusual, Dammeier said, “but I wouldn’t say it was irregular. I have dealt directly with city managers but would not have been surprised if the city attorney  had been involved. In Upland sometimes things are done a little differently.”
Dammeier said the lack of clarity over whether one of the $25,000 payments to his firm was for the “don and doff” issue or pertained to Moore was understandable.
“Where the confusion came up was both cases were going on at the same time,” Dammeier said. “We agreed that the city should pay $50,000. From our perspective it did not matter what account we were being paid from.”
Information that came out during the arbitration process over Quincey’s claim indicated that Carrillo, the assistant finance director, was responsible for miscoding the check. Carrillo and Quincey had a personal relationship, city officials allege. Carrillo left the city of her own volition two months after Quincey was placed on paid administrative leave in early 2011. Carrillo could not be reached for comment.
Jeff Bloom, the city’s former community development director, has been referenced on multiple occasions during the investigation of Pomierski and its follow-up. Bloom oversaw the city’s planning division. Pomierski, Hennes, Crebs and Sanchez told several individuals with projects pending before the city’s planning division or its planning commission that they could expedite the city’s approval process if they were to be hired as consultants by those applicants. Bloom, now the deputy city manager in Rancho Cucamonga overseeing the planning division there, did not return a phone call seeking comment.
FBI agents obtained statements from those involved in the extortion and bribery conspiracy that Pomierski had control over the decisions made by the planning commission and could influence its decisions.
Mark Tundis was one of Pomierski’s appointees to the Upland Planning Commission and the commission’s chairman during much of Pomierski’s tenure as mayor. He said he did not believe Pomierski exercised the control over the city’s planning process attributed to him.
“I don’t believe that happened,” Tundis said. “It  didn’t happen on the planning commission when I was on the planning commission. I did my job, which was to  look at what came before the planning commission and make the best decision for the city.”
He said Pomierski had never pressured him or the commission to make a decision one way or the other with regard to any particular project.
As to Pomierski’s interaction with community development and planning staff, Tundis said, “I have no information about that one way or the other. I don’t know what was going on in the planning division, to be honest with you.”
Tundis said he saw “no evidence” that Pomierski improperly influenced the city’s planning processes.

(October26)  By John Wurm
The San Bernardino County Community College District, which operates San Bernardino Valley and Crafton colleges and serves 13,000 full time students, faces dire fiscal and educational predicaments.  The prospects are dim, both short term and long term.  Like many governmental entities in California and San Bernardino County, the district is shortchanging those it is tasked with serving and has gone on a reckless spending spree.
Short term, the district has cut 20% of its enrollment over four years.  This year alone, it has cut 1,000 students.  In this year’s operating budget, the expenses approved by the district’s board exceed the revenue by $2,000,000.  Part of the problem is that the district is giving $1,000,000 to its TV station and $3,200,000 in raises to employees.  The district gave $1 million to its TV station even though the budget for the TV station is already at $4,000,000.  Why would the district throw so much money into its TV station while it is cutting 1,000 students?
Long term, the fiscal outlook is even worse.  The district has $1,250,000,000 in bond debt.  The payments average $34,600,000 each year for the next 36 years.  The bonds aren’t paid off until 2048.  The district has used capital appreciation bonds, which spread the payments over decades, much longer than a home loan. For instance, capital appreciation onds issued by the district raised $78,000,000 for building construction, but will cost $586,000,000 to repay.  The borrowing cost is about 7.5 times the amount of the principal amount.  By comparison, the repayment cost for a typical home loan is no more than 2.5 times the loan amount.
These types of bonds have been criticized by the Los Angeles County auditor, who states that the repayment cost should be no more than 4 times the principal amount.  Just recently, it was reported that the state treasurer, Bill Lockyer, condemned districts using capital appreciation bonds, stating the district boards that approved such bonds should be “voted out.”  This November, the voters of the district will have that chance as four incumbents are competing with 6 challengers for the four open board positions.
Despite already facing a crushing bond debt, the district still plans to issue another $240,000,000 in bonds.  These bonds are repaid by property tax dollars, $37.30 for every $100,000 in value of taxpayer’s homes and businesses.
The district’s academic practices have also been criticized by the community college state chancellor.  The district still offers “fun” classes like ceramics and walking that can be taken up to four semesters, or for two years.  The core mission of any community college is to get students ready for a four year college or provide occupational training so a student can get a good job.  Two years of walking does neither.  The district ignored the state chancellor’s directive.
The district’s professors and teachers are classified as “instructors”.  The district’s instructors average $79,900 for nine months work. Not too bad.  But the “instructors” at Cal State San Bernardino average $57,100.  Why does a junior college pay its instructors 38% more than the instructors at a four year college?
How does a small community college district get $1.25 billion in debt and lose 20% of its enrollment?  The answer, I believe, is a lack of leadership from the board. The district’s budget is over $260,000,000 annually.  Regular board meetings are only once a month.  That isn’t enough meetings to manage such a large budget.  The seven members act as a rubber stamp, ceremonial body.  For instance, in 2011 there were 199 spending votes, which the board approved.  Each vote was unanimous, with 1,393 votes to spend tax dollars – none opposed.  The board members are generally from the educational establishment, come from government and/or have been on the board for a long time.
The district encompasses San Bernardino, Colton, Rialto, Loma Linda, Grand Terrace, Redlands, Yucaipa, Highland and unincorporated areas such as  Lake Arrowhead, Crestline, Running Springs, Devore, Mentone and Big Bear.  There are 800,000 residents.  The population is about the same size as a Congressional district.
In addition to not holding enough board meetings to manage such a large budget, the board is structured so that the members are not held accountable for their actions.  The board is elected “at large,” meaning that the district’s voters have little chance to learn about basically anonymous  board members.   Breaking the district into seven voting districts, instead of a single “at large” district, would bring more accountability.  Also, a massive “at large” voting district is susceptible to a civil rights lawsuit because ethnic minorities can be underrepresented.  The district has been presented with a plan to create seven voting districts but has not moved forward with it.
This November 6, the voters have an opportunity to stop the decline of the district.  There’s no reason to allow the current board to load down the district and the taxpayers with another $240,000,000 in bonds when they are spending the money they have on classes like “walking” and pay their junior college instructors 38% more than the instructors at a four year college.
As a candidate for the board, I say “Enough is enough.”  I’m running for the board to stop the debt spiral and wasteful spending.  If I’m elected, I pledge not to cut students while giving money to the TV station and raises to employees.  If I’m elected, I’m going to ask the district’s finance staff to come up with a plan to restore the 1,000 students the district cut this year.  I’m a small business owner who knows what it takes to balance a budget.  I pledge to be a good steward of your tax dollars.  We can’t afford for San Bernardino Valley and Crafton colleges to fail.

John G. Wurm is an attorney from Lake Arrowhead and a candidate for the San Bernardino County Community College District Board of Trustees.

(October26)   TWENTYNINE PALMS — The city of Twentynine Palms appears to have made significant headway in convincing California  officials to allow it to continue to utilize bond money it issued last year for redevelopment purposes, despite the passage of legislation that shut down redevelopment agencies statewide.
It remains to be seen whether the city will get that money back.
Twentynine Palms, a city of  the 25,048 in San Bernardino County’s Mojave Desert Outback, is at the forefront of efforts challenging the redevelopment agency-shuttering Assembly Bills XI 26 and XI 27, which were passed by the state legislature last year at Governor Jerry Brown’s behest and then upheld by the state Supreme Court early this year following a legal challenge by a confederation of cities.
At issue in Twentynine Palms’ challenge is the fate of  Project Phoenix, which is to include a community center, a 250-seat theater, classrooms, a civic plaza, a park, a paseo, residential units, a wastewater treatment plant, and improvements to the downtown fire station.
Even as AB X1 26 and AB X1 27 were winding their way through the legislature in 2011, the city  hatched a plan to protect its redevelopment funding. As the legislation was being considered in Sacramento, the Twentynine Palms City Council, which doubled as the city’s redevelopment agency board, issued two tax allocation bonds for the Project Phoenix downtown revitalization undertaking.  That bond money was made available before the laws went into effect but was never expended.
Having made that precautionary move, the city of Twentynine Palms this year proceeded with its   aggressive challenge of the state Department of Finance in its effort to wrest  back $31 million in bond proceeds.
Twentynine Palms officials maintain that AB X1 26 and AB X1 27 are trumped by federal securities regulations, meaning the money the Twentynine Palms Redevelopment Agency bonded for last year must be utilized only for the purpose that bondholders were told the money would be applied toward.
Twentynine Palms City Attorney A. Patrick Munoz, of the law firm Rutan & Tucker, believes he can convince a judge the non-taxable bonds issued last year created specific obligations between the city, as  the issuer, and the bond purchasers, and as such are enforceable obligations. If the city were to hand off the bond proceeds to the state  to use the money for a purpose other than what the city had specified in marketing the bonds to the bond buyers, that would constitute fraud, according to Munoz.
Munoz’s strategy calls for having the successor agency lay claim to the redevelopment money and proceeding with the previously ratified redevelopment programs, including Project Phoenix. The state will have to go along with the city’s discharge plan because the bonds are enforceable obligations and the proceeds are secure, Munoz has theorized. Munoz suggested the city will have to be very precise about how the money earmarked for Project Phoenix is expended.
Munoz drafted a contract between the successor agency and the city by which the  successor agency is to  turn over the bond spending authority to the city with a directive that it go toward Project Phoenix. After the contract was presented to the council on May 22 and approved with the 4-1 vote, the oversight board took up the issue and its seven members voted unanimously to endorse a resolution to transfer their duties and obligations to administer the bond proceeds to “the city in its capacity as a municipal corporation. If the proceeds were turned over to the state to be re-allocated for operational purposes, these proceeds would no longer be tax-exempt if they were not used for public works projects,” Munoz maintained. “That creates concerns as to whether we violated federal tax laws and federal securities laws due to promises we made to the public when we sold the bonds versus the way we’re using the bonds.”
Prior to the council’s May 22 vote, on April 27 California Department Finance program budget manager Mark HiIl denied releasing the bond proceeds back to Twentynine Palms because, he maintaind, no contracts were in place before June 28, 2011. Redevelopment agencies were prohibited from performing new business by Assembly Bill IX26, effective June 29, 2011. This included expanding financial or legal obligations, incurring new debt, and buying or selling property. The Project Phoenix bonds, however, had been issued in March of 2011. Hill’s letter referenced the redevelopment agency entering into a contract after June 27, 2011.
The new laws do permit successor agencies to enter into contracts that would allow the transfer of duties that the city enacted in May.
Munoz maintains the oversight board’s May approval of the contract classifies the bond proceeds as an enforceable obligation of the former RDA.
Last month, on September 19,  Twentynine Palms Mayor John Cole, city manager Richard Warne, Munoz and Munoz’s colleague at the law firm of Rutan & Tucker, Bill Ihrke, along with a city consultant, Matt McCleary of the Rosenow Spevacek Group, flew to Sacramento. There, they presented a special consultant to the Department of Finance detailed to deal with local government issues pertaining to shuttered redevelopment agencies, Steve Szalay, and other Department of Finance officials with bond documents, a timeline for Project Phoenix, copies of previous correspondence with the Department of Finance and a highlighted roster of misassumptions and errors on the Department of Finance’s part with regard Project Phoenix, along with a summary of the legal argument that the money should be returned to the city.
There was an acknowledgement at that time that Department of Finance officials had not previously seen or considered much of the documentation relating to Project Phoenix.
In a letter dated October 7, Szalay indicated that the Department of Finance approved the successor agency’s obligations payment schedule for January 1 through June 30, 2013, but left unaddressed a host of questions with regard to the city’s legal and procedural claim for the return of the bond money. Szalay did state in the letter that the Department of Finance’s review “disclosed the improper transfer of the agency’s bond proceeds.”
Twentynine Palms officials are now preparing for a further in-depth discussion of the return of the redevelopment money to Twenty-nine Palms. If that does not achieve the desired results, the city would have the option of suing the state in Sacramento Superior Court for the return of the money.

(October19)  Scot Spencer, who once ruled the roost at San Bernardino International Airport, is on the brink of being evicted from that facility. This morning, October 19, it is anticipated that Federal Bankruptcy Judge Deborah Saltzman will confirm her tentative ruling handed down on October 15 to force Spencer and his companies that remain at the airport to depart in the face of revelations that two Spencer-owned and managed companies are no longer insuring their operations and indemnifying the joint powers authority that has jurisdiction over the airport.
Spencer, who at one time had control of nearly every aspect at the airport, including developing and managing it, was forced into having his companies operating out of the airport  file for bankruptcy in December 2011 and March 2012. He is contesting the vacation order.
The San Bernardino International Airport Authority, known by its acronym SBIAA, is a joint powers authority consisting of the county of San Bernardino and the cities of San Bernardino, Highland, Loma Linda and Colton dedicated to transforming the grounds of Norton Air Force Base, which was shuttered by the Department of Defense in 1994, into a viable civilian aerodrome.
Spencer, who has extensive contacts throughout the aircraft industry, was brought in by the San Bernardino International Airport Authority in 2007 under a no-bid arrangement and entrusted with converting the facility into a true international airport. Spencer was given that assignment despite his 1994 conviction for fraud that ensued after he and financier Jeffrey Chodorow sought to utilize the remaining assets from Braniff International Airways, which went bankrupt in 1982, to create Dallas-based Braniff International Airlines, Inc. Spencer and Chodorow were both convicted of fraud for absconding with $14 million of the company’s funds and Spencer served a four-year prison term from 1995 until 1999 as a result of that conviction.
Spencer leased from the San Bernardino International Airport Authority the lion’s share of property at the airport, where several companies he was an owner or investor in set up shop. Upon his 2007 hiring  to direct what was supposed to be a $38 million renovation of the airport’s passenger terminal and a $7 million development of its concourse, Spencer confidently predicted that upon completion of those projects the airport would attract at least one passenger carrier and as many as a half dozen airlines. The cost of the passenger terminal and the concourse escalated to $142 million and the airport has yet to host any commercial airlines. Spencer was granted the franchise for the corporate jet-hosting Million Air aviation facility at the airport.
The cost overruns for the terminal project, the failure of San Bernardino Airport to attract commercial airlines and Spencer’s relationship with former San Bernardino International Airport Authority and Inland Valley Development Authority executive directors Don Rogers and T. Milford Harrison as well as with Timothy Sabo, the legal counsel for the authority, invited the critical scrutiny of the San Bernardino County 2010-11 Grand Jury. The grand jury  questioned several elements of Spencer’s performance and that of Rogers, calling into question what was characterized as lax oversight of the airport’s operations and favorable treatment accorded Spencer.
From his position of control, Spencer pursued his own corporate aims to the detriment of blimp builder Aeros Aeronautical Systems Corp. and aircraft maintenance specialist BaySys West, both of which were operating at San Bernardino International Airport but elected to leave because of Spencer’s interference.
Spencer utilized Rogers and Sabo to evict Aeros in 2008, despite the consideration that business was booming for Aeros and that company was making its lease payments for Hangar 695 to the airport authority on time and in full. In July 2008, before Aeros vacated the hangar, Spencer and SBIAA signed a lease for Hangar 695 at a rate less than half of what Aeros was paying for the space, even though  Aeros had yet to vacate it. When Aeros did not leave quickly enough to satisfy Spencer, who wanted the space to have one of his companies complete $750,000 worth of repairs on a 727 his company was refurbishing, he threatened SBIAA with legal action.
Aeros, which had offered the promise of remaining as a longtime paying tenant, left in a huff, never to return.
The authority kowtowed to Spencer even further by providing him over $1 million worth of concessions, including the forgiving of a $155,000 balance on a previous loan, the extension of another $550,000 loan at 5 percent interest, and an ongoing $315,000 hangar rental subsidy.
Also in 2008, Spencer forced the exodus of Virginia-based BaySys West, which was employing 300, from San Bernardino International Airport because Spencer apparently felt that company  was in competition with Norton Aircraft Maintenance Systems, a company he owned. BaySys left in December 2008 under pressure from Spencer.
Spencer involved himself in a questionable relationship with T. Milford Harrison, a one-time Loma Linda city councilman who served for a time as the executive director of the Inland Valley Development Authority (IVDA), which is devoted to developing and improving property surrounding the airport property. Harrison was given several lucrative positions with companies involved at the airport which Spencer owns or controls. With Spencer, Harrison is a manager of KCP Leasing and Services. Harrison and Spencer were also listed as officers with Million Air Development Company, LLC, as well as Million Air San Bernardino LLC. Harrison further has an unknown relationship with SBD Aircraft Services. That company had issued to Harrison an American Express Business Platinum card, against which Harrison charged $63,043.45 in expenses and a second Starwood Preferred Guest Business credit card, which Harrison used for $4,642.86 in purchases. None of those charges were related to airport business, resulting in  American Express suing Harrison for payment.
On September 21, 2011 federal and state authorities descended upon San Bernardino International Airport, serving search warrants at five offices, businesses or facilities there as part of a comprehensive investigation into allegations that millions of taxpayer dollars were illegally diverted, mismanaged, laundered, misappropriated or siphoned off by officials or individuals affiliated with the airport’s development.  Targeted in the raid led by the FBI were SBIAA and IVDA headquarters, the San Bernardino Million Air Franchise; three hangars, including Hangar 763, where two Spencer-affiliated companies, Norton Aircraft Maintenance Services and SBAM Technics, are located; a storage facility at the airport, and Spencer’s Riverside residence. According to the search warrants, the authorities were seeking information regarding suspected misuse of federal funds, bribery, mail fraud, wire fraud and conspiracy.
On September 28, Rogers resigned as SBIAA and IVDA executive director. On November 9, the SBIAA board hired A.J. Wilson, a municipal manager with an extensive list of top administrative assignments inside and outside of California, to the position of executive director of San Bernardino International Airport. In November 2011, the SBIAA and IVDA boards removed Spencer as the contract developer of San Bernardino International Airport. Spencer legally challenged that move, but on February 17, Superior Court Judge Brian McCarville ruled that the airport authority was legally entitled to assume from Spencer and his company, SBD Properties, control of the airport’s fuel farm, consisting of tanks from which the private jets that fly out of San Bernardino International Airport are fueled.  Spencer had allowed fuel in the tanks, which have a capacity of 150,000 gallons, to dwindle to 1,100 gallons as of February 1. Under the authority’s contract with SBD, a minimum of 20,000 gallons of aviation fuel must be maintained in the fueling system at all times.  On February 21, Million Air Interlink, the Texas-based provider of landing and take-off services for operators of private and corporate jets that had already sued Spencer for $837,290 in long-past-due franchise fees, revoked Spencer’s franchise.
Spencer sought to use bankruptcy filings to block the actions being taken by SBIAA against him and his corporate entities, San Bernardino Airport Management, SBD Properties LLC, KCP Leasing and Services, SBD Aircraft Services, Norton Aviation Maintenance Services and Unique Aviation. In filings before the bankruptcy court, the various creditors of Spencer’s companies or those in contractual relationships with them asked to be able to liquidate Spencer’s assets. Saltzman in her tentative ruling said the airport authority should be able to reassume control over the hangars Spencer’s companies occupy as well as the Million Air facility.
Spencer did not return phone calls seeking comment.