Courting even further controversy, San Bernardino’s elected leadership this week extended its arrangement with a consultant that has already bollixed the effort to license some 15 entities that are to be permitted to traffic in cannabis within the city.
Having retained  Brea-based HdL to advise them on how to go about selecting which applicants for marijuana-related business operating permits would ultimately be provided with those potentially highly-lucrative privileges, city officials ushered the city council toward a decision in that regard at its February 21 meeting.
Working from a secretive protocol based on criteria that have yet to be disclosed, the council rejected 24 of the 39 applicants. At that meeting, the council gave the nod to Empire Connect, Pure Dispensaries, Have a Heart, JIVA, and PTRE Management, all of which were entrusted with retail permits. Orange Show Cultivators, which is to engage in cultivation, manufacturing and distribution; SOCA Farms, involving retailing, cultivation and distribution; Central Avenue Nursery, a cultivator, retailer and distributor; and Nibble This, which is to entail retailing, manufacturing and distribution, were all given microbusiness licenses the same night. Nibble This, notably, was provided with two separate microbusiness permits at two separate locations. Accessible Options, 14 Four, GWC Real Estate Services and Organtix Orchards were granted cultivating permits. AM-PM Management was the recipient of a manufacturing permit and Blunt Brothers, a wholesale distributor, was given on the same night permission to operate.
Though a representative from HdL was at the meeting that night, he did not introduce himself or take part in the proceedings. Nor did city officials deign to identify him or engage him in the public process. Even with controversy enveloping the process and the meeting, the HdL representative remained silent. Indeed, after the meeting, the Sentinel erroneously reported that no representative from HdL was present. City officials have yet to identify who the HdL representative was, refusing to disclose his name.
In short order, flaws in the approval process were identified. Specifically, it was learned, six of the companies granted licenses – Organtix Orchards, AM-PM Mgmt. Inc., Orange Show Cultivators, both Nibble This operations, Blunt Brothers, and Accessible Options are out of compliance with the city’s codes, policies, municipal plan, zoning codes and/or general plan. It was not clear how several of those given licenses and others were not determined  by the San Bernardino Community Development Department as being a requisite 600 feet or more away from schools, parks, churches, youth centers, operations where alcohol is served or sold as well as residences before the process of selecting licensees was undertaken. What is known is that at least seven of those operations that were rejected were in compliance with the city’s codes and regulations.
Publicly, members of the San Bernardino community openly suggested that the entire selection process was tainted by graft and that the council was cynically utilizing HdL as a shroud behind which bribe-taking was going on. It did not help matters that several of those provided with the licenses had made hefty donations to the city’s elected leadership.
Jeff Augustini, an attorney representing one of the applicants passed over in the selection process, Connected Cannabis Co., also known as EEL Holdings, LLC, filed suit against the city. According to that suit, “the credibility of the city’s selection process” has come into question “amid growing rumors and allegations of corruption, cronyism, political maneuvering, and the use of the process to score political points and to carry out political vendettas.” Augustini demanded that all 16 businesses granted licenses on February 21 be prohibited from proceeding.
The city’s management, its council and its community development department defied Augustini’s call, doubling down, insisting that those selected proceed, which will place them in better stead to demonstrate further largesse toward the council.
Another of the spurned applicants, Washington LLC, represented by attorney Ben Eilenberg, also filed a lawsuit against the City of San Bernardino, in not so many words alleging that city officials are on the take.
“The effects of the ‘pay for play’ corruption led to the city issuing a large number of licenses that were illegal,” Eilenberg articulated in the suit. “Over 50 percent of the issued licenses were illegal, thereby throwing the entire process into doubt.”
According to the suit, money originating with applicants for the licenses was being passed around to the city’s elected officials, and on occasion city staff in positions as high ranking as the city manager were coordinating how the money, disguised as political donations, was to be vectored and to whom, in return for which the licenses were granted.
Proof of the allegations consists, according to Eilenberg, in the form of texts and emails that passed between city officials and cannabis operation applicants or their representatives in which preparations for the exchange of approval for money took place. For proof of the allegations, Eilenberg said, one needed to merely consider that several of the cannabis operations that are out of compliance with the city’s standards were given permits while others which were in compliance came away empty-handed at the end of the February 21 special meeting.
In what struck some as a halfhearted effort to refute those accusations and justify the provision of those permits to the entities that are out of compliance with the regulations which the council’s members had themselves instituted last year, they stated they had merely relied upon a ranking of the applicants and their qualifications provided by HdL.
This week, on Wednesday night, the full council took up a proposal, put forth by city staff to lock the city into a relationship with HdL that would keep the company as San Bernardino’s “cannabis consultant” for five years at a cost of $765,000.
Councilman Theodore Sanchez offered an alternative motion to pare the contract extension back to a minimum of six months, with the option to extend it another six-months beyond that.
The ostensible justification for staying the course with HdL, for at least another half year, is that having the firm’s guidance is crucial to continuing with the ongoing cannabis operation licensing processes in the city. Sanchez proposed, and three of his colleagues went along with, having city staff seek other companies to fill the role HdL is, and then invite them, through a process known as a request for proposals, to bid on providing that service.
HdL is working under a $167,000 per year contract as the city’s consultant, exclusively on the marijuana business licensing application issue.
Councilwoman Sandra Ibarra voted against extending HdL’s contract. Councilman Jim Mulvihill did not participate in the vote. Based upon what HdL was previously carrying out and what was proposed under the five-year contract, HdL is to carry out a battery of determinations as to whether the businesses to be given final occupation and operating permits are in compliance with the city’s codes and regulations, including but not limited to the inspection of the premises from which they will operate. HdL is to also make financial audits of those operations prior to the one-year anniversary of each business starting up, such that all revenue due to the city from taxes applied to the marijuana and cannabis products sold is realized and accounted for.
Dr. Majid Seraj, a Redlands-based biochemist and pharmacist, had applied for a microbusiness permit that would have allowed his company to manufacture cannabis-based medical products for the wholesale market in San Bernardino. His application was denied, despite his having assiduously prepared his business proposal to be in compliance with the city’s regulations. Seraj told the council the application process was “a stress test” for the city and HdL which turned out to be a “compete and utter failure” for both. HdL had been tasked, he said, with “phase two scoring,” turning in what Seraj said was “a disgraceful performance. The city council lost faith in the phase two scores and the scores were ultimately vacated. The applicants paid $80,000 for phase two scores and received nothing in return. If the $80,000 came from the city’s coffers, I am sure Ms. Ibarra and Mr. Sanchez would be asking HdL tough questions.”
Seraj said the phase three scoring was done by city staff paid for by the applicants. He said HdL was supposed to be excluded from that process but had submitted a $17,500 invoice for work on phase three evaluations, which he said suggests the company was involved in Phase Three scoring. That was, he said, “a violation of the guidelines. If any other phase three fees went to HdL it needs to be disclosed to the city council. He called for an audit “of every penny paid to HdL” before the city enters into any further contracts with the company.
Others indicated they found it suspicious that the city was entering into the contract with HdL on the same night that promotions of five of the city’s police department command staff to community policing sector posts were made, which they suggested was a move to buy the silence of the police department. Furthermore, some citizens were disturbed that Mayor John Valdivia abandoned the council dais prior to the item with regard to the extension of the HdL contract being taken up by the city. Councilwoman Bessine Richard, the city’s mayor pro tem, officiated over the hearing.
-Mark Gutglueck

This past Sunday, April 28, the Gold Line Construction Authority successfully completed the initial phase of testing for the newly installed underground communication system for the freight train system that runs through the Glendora to Montclair Gold Line  segment. Sunday’s testing was the first of three phases that will be conducted to test the new system that will eliminate the use of the current overhead pole line system. The testing involved several trials with an active Metrolink train to ensure the new communication system would activate and deactivate the train signals at all street crossings in the test area.
The Foothill Gold Line from Glendora to Montclair will add new light rail stations to the Metro Gold Line system in the cities of Glendora, San Dimas, La Verne, Pomona, Claremont and Montclair. The 12.3-mile extension will connect to many regional destinations, including two dozen colleges and universities within a short walk, bike or bus ride from one of the future stations, the Los Angeles County Fairplex, Raging Waters, several regional parks, the San Gabriel Mountains National Monument, historic downtowns, as well as many museums.

A substantial task force of volunteers and San Bernardino County Sheriff’s Department personnel, including the department’s search and rescue team, this week have devoted themselves to the gruesome undertaking of searching the county’s Victorville landfill for the body of six-year-old Duke Flores.
On Thursday, April 25, at approximately 10:06 pm, deputies from the San Bernardino County Sheriff’s Department stationed in Apple Valley as members of that town’s police department responded to a residence in the 22000 block of Cherokee Avenue following a request for a welfare check from one of Duke Flores’ relatives. Upon arrival, deputies were told by Duke Flores’ mother, Jackee Contreras, 29, that her son had not been seen for approximately two weeks. Deputies immediately began a search of the area. Jackee Contreras was arrested, transported and booked into the High Desert Detention Center for child neglect, stemming from her delay in reporting her son missing. She was later transferred to the West Valley Detention Center in Rancho Cucamonga.
On Friday, April 26, detectives from the homicide detail of the sheriff’s department’s specialized investigations division responded to the Cherokee Avenue residence to conduct an investigation. The search continued for the child and canine units were requested and responded to the location. Detectives gathered evidence and conducted multiple interviews throughout the day with family members. On Saturday, April 27, homicide detectives interviewed Jackee Contreras and at the conclusion of her interview she was booked for murder, PC 187, and was held without bail.
Later on April 27, detectives arrested Jennifer Contreras, described as Jackee Contreras’ twin siter and Duke’s aunt, transported and booked her into the High Desert Detention Center on a PC 187 charge. She, too, was held without bail.
The department says there is reason to believe the child’s body was disposed of in a dumpster. It has not been disclosed why investigators believe that is the case.
At 7:15 am on Monday, April 29, a crew involving an unspecified number of homicide detectives, sheriff’s department volunteers and landfill personnel were actively searching the landfill in Victorville for the body of Duke Flores.
By 1 pm that day, the search team had swelled to four homicide detectives, 36 sheriff’s department volunteers, three canines, and 17 additional sheriff’s department members as well as landfill personnel. The primary area being searched was approximately 70 feet x 70 feet x 10 feet in depth, involving some 600 tons of material.
On April 30, Jackee Contreras and Jennifer Contreras were brought before Superior Court Judge Lisa Rogan for arraignment in Victorville Superior Court. With more than a dozen of Duke Flores’ family members present, they each entered a single not guilty plea to one count of murder. Judge Rogan set their bail at $1 million each.
At 8 am that morning, the search at the Victorville landfill resumed, entailing a team of homicide detectives, 19 sheriff’s department volunteers, two search dogs, 15 sheriff’s deputies and county public works division employees. The search concluded at 5 pm without success.
At 8 am May 1 the efforts of  homicide detectives, 16 volunteers, three search dogs, 12 additional sheriff’s deputies and landfill workers continued. At 5 pm Duke Flores’ body had not been turned up.
Yesterday, May 2, detectives, 17 volunteers, three dogs, a dozen deputies and county personnel employed at the landfill sifted through some 1,200 tons of rubbish,, again to no avail.
As of  7:45 am this morning, homicide detectives, nine volunteers, two search dogs and 12 deputies were back at the landfill.
Mark Gutglueck

What started out as a relatively modest $4 million refurbishing of the now 82-year-old Lake Gregory Dam has been completed as a major $24.6 million upgrade.  The Lake Gregory Dam Rehabilitation Project is intended to maintain the safety and stability of what is a major edifice within the San Bernardino Mountain Community into the middle of the 21st Century and beyond.
After being deemed a “high hazard dam” by the California Division of Safety of Dams, the County of San Bernardino Special Districts division undertook an effort to retrofit the existing dam to meet state earthquake safety standards.
Dam rehabilitation included adding a 40-foot earthen buttress to the downstream side of the dam that now extends 62 feet beyond the toe of the embankment. The buttress is composed of 70,000 cubic yards of earthen material. To add the buttress, overgrown vegetation and sediment that formerly filled the dam was removed.
Work on the project began in July and truck hauling for the undertaking began in earnest in September. Hauling consisted of a daily transport of 80,000 cubic yards of material up Highway 18 through Crestline to the Lake Gregory Dam worksite. In October, a large piece of compaction equipment was delivered to the worksite.
As work on the west abutment of the dam was nearing completion in December, seasonal rains started to complicate the effort.  While the project was under construction, the county was legally required to keep the lake at a level roughly five feet below normal. After a thorough assessment of the Lake Gregory Dam buttress, the Division of Safety of Dams in early January gave the county permission to raise the lake level by 5 feet from the restricted level to an elevation of 4,520 feet, which is approximately three feet below the spillway.
A deluge during the third week of January resulted in the water level in Lake Gregory reaching the Division of Safety of Dams’ limit, requiring the county to open the outlet valve to drain water beginning the morning of January 17. The outlet valve was closed the morning of January 22 when the water level stabilized near the Division of Safety of Dams’ limit.
Due to another heavy storm that involved rain, sleet, hail and snow, the county from February 11 through February 24 halted work on the Lake Gregory Dam buttress to protect the integrity of the dam and ensure the safety of crews and residents.
Work on the project, which included a 40-foot-wide earthen buttress added to the downstream side and what is referred to as a rock or riprap layer over the slope of the dam, was essentially completed as of April 4. The project widened the dam to twice its previous span from the top to the bottom of the buttress. This width increase give the structure greater stability, as it was previously vulnerable to seismic mishap.  New valves and pipelines were layered into the structure to effectuate better and faster control of the lake level, including rapid emergency drainage.
The completion has allowed the reopening of Lake Gregory Drive, which had been closed to traffic since the initiation of construction last summer.
Originally completed in 1938, the dam is 97 feet high and has a 2.5:1 upstream slope and 2:1 downstream slope. Through the placement of the dam, Lake Gregory was created, as it collects water from Houston Creek.
Lake Gregory now forms the heart of the Crestline community, and features fishing opportunities, swimming, waterslides, boating, and a walking trail along the lake’s perimeter.
“This is a huge step for Lake Gregory Regional Park,”Beahta Davis, the county’s director of regional parks, said. “We are really excited about the completion of the dam.  If you look behind you, you can see how classic and beautiful the lake looks.”
-Mark Gutglueck

The San Bernardino City Council this week kicked the can down the road for two more weeks, discussing but taking no action with regard to firing now-suspended City Manager Andrea Travis-Miller or, alternatively,  reinstating her to her active role  as the county seat’s top municipal administrator.
Since December 19, Travis-Miller’s continuing tenure with the city has been in jeopardy. That day former Third Ward Councilman John Valdivia was elevated to mayor following his November electoral victory in which he turned out the city’s immediate past mayor, Carey Davis. Valdivia was joined on the dais by newly elected First and Second Ward council members Theodore Sanchez and Sandra Ibarra. At Ibarra’s urging, the council that day took up an evaluation of Travis-Miller’s continuing performance in her role as the city’s top staff member. That evaluation took place behind closed doors after a public session during which a cross section of the community, including Davis, voiced confidence in Travis-Miller.
That day in December, as again in January and again in February and then once more in March during similar closed door meetings, the council considered the wisdom and efficacy of leaving Travis-Miller in place as the city’s top administrator. Reliable sources inform the Sentinel that the most pointed criticism of Travis-Miller emanated from the mayor, who is not empowered under the city’s current charter to vote on issues that come before the council under normal circumstances. At that point, there was not sufficient support for cashiering Travis-Miller, as she enjoyed the solid backing of councilmen Fred Shorett and Jim Mulvihill as well as the confidence, if less than fully enthusiastic endorsement, of Councilwoman Bessine Richard and Councilman Henry Nickel.
Playing out at that time was a power struggle in which Valdivia, Mulvihill, Shorett and Travis-Miller were principals. Valdivia’s ascension to the mayoralty was spoiled in no small measure by the charter reform that had taken place with a citywide vote in 2016 that scrapped the municipal charter that had been in place since 1905. The revamped charter had significantly attenuated the mayoral power that had existed under the 1905 charter. For more than 110 years, the mayor had significant political power and administrative reach to match it. While the 1905 charter did not give the mayor a vote on the council, it did provide him with the power to veto any vote that passed by a 4-to-3 or 3-to-2 margin, translating in actuality to the mayor possessing two votes. The mayor wielded the gavel at council meetings, conferring upon him the power to control the ebb and flow of debate, and the power to recognize both members of the council and of the public during public discussions leading up to council action. As significantly, the mayor under the previous charter had the power to hire and fire city personnel, which put him on a par with the city manager in terms of administrative reach.
The 2016 charter reform, in addition to transforming the positions of city attorney and city clerk from elected ones to appointed positions, dispensed with the mayor’s administrative role, such that he was no longer empowered to hire or fire city personnel and no longer had the status of being with the city manager the co-regent of the city.
Upon coming into office, Valdivia was casting about for a way to infuse the mayoralty with some or all of the power that had been taken away. This included beefing up the support staff the council then had – consisting of four city employees who were as answerable to the city manager as they were to the elected leadership – into 13 positions, including the mayor’s chief of staff who would oversee eight staffers serving at the mayor’s pleasure.
When he assumed office, Valdivia had the backing of what appeared to be a sure majority of the council – consisting of Nickel, Richard, Ibarra and Sanchez. But by looking to consolidate power too soon and more than triple the depth of the mayoral/council staff in a way that appeared to empower himself further, Valdivia generated resistance that has complicated his tenure. That included a measure of pushback from Councilman Nickel, who over the previous four years had evolved to become Valdivia’s strongest and most reliable ally on the council. Nickel balked at going along with the mayoral staff increases. Valdivia’s maneuverings to overcome Nickel’s defection from the Valdivia reservation created more tension still. This included an episode in which Nickel, Shorett and Mulvihill simply walked off the dais in the middle of a meeting to prevent the council, which is already functioning at six-sevenths strength because of the vacancy in the Third District as a result of Valdivia’s resignation from that post to assume the mayoralty, from maintaining the requisite quorum to be able to vote. That matter, relating to hiring the staff Valdivia wanted, appeared to be headed toward a 3-to-3 deadlock with Nickel, Shorett and Mulvihill opposed and Richard, Sanchez and Ibarra in favor. Valdivia would then have been eligible to vote, as in addition to veto power the mayor also carries tie-breaking authority.
Early last month, five months after the November election and a decent interim for the city to acclimate to its new political reality, Richard evolved to a willingness to support Valdivia in forcing Travis-Miller’s exit. During a closed session on April 3, she joined with Ibarra and Sanchez in voting to place the city manager on paid administrative leave, resulting in a 3-to-3 deadlock, with Shorett, Mulvihill and Nickel on the other side of the question. Valdivia, using his tie-breaking authority, tipped the scales to suspend Travis-Miller.
An issue facing Valdivia in orchestrating Travis-Miller’s sacking is that when she was hired in August 2017 as a replacement for the previous city manager, Mark Scott, the council unanimously voted to confer upon her a $253,080 annual salary and $93,000 in yearly benefits and a three-year contract. Those terms require that unless a city council majority can cite cause for terminating her at any point before the three years elapse, she must be paid the balance remaining on her contract. Only by firing Travis-Miller for cause can the city avoid having to pay her the $425,000 she would now otherwise have to be paid as a severance.
The Sentinel has learned that those advising Valdivia believe there are bulletproof grounds for cashiering her that could be publicly cited. Whether or not public disclosure of that rationale might carry with it certain complications, procedural and political, is another matter. In addition, the city would want to make a clean break of the relationship with Travis-Miller, meaning that doing so on a 3-to-3 deadlock decided by the mayor’s action could cloud the circumstance, subjecting Ibarra, Sanchez and Richard to potential obloquy down the line they would rather not deal with.
Next week, on Tuesday, the mail polling in the race to fill the gap left by Valdivia’s departure from the council ends when the city’s post office’s close at 5 p.m. No latter than Friday, then, after the last of any straggling ballots have arrived to be counted, it will be known whether the voters in the Third District will have chosen Anthony Aguirre, who initially signed up for the contest but then withdrew after it was too late to remove his name from the ballot, or Juan Figueroa or Treasure Ortiz will take a place on the council dais later this month.
The election results should have some impact with regard to Travis-Miller, as Juan Figueroa is closely allied with Valdivia. Figueroa’s ascendancy to the council would likely mean curtains for Travis-Miller, including a vote to state a public reason for her firing. Ortiz is reportedly far more favorably disposed toward Travis-Miller. Ortiz’s presence on the council, assuming Travis-Miller would want to remain in place as city manager under circumstances that include a sharply divided elected city leadership in which four of those leaders have expressed a lack of confidence in her, might restore Travis-Miller to her post and keep her in place for another two years.
Wednesday night, May 1, after the city council filed into the city’s meeting chambers just before 7 pm after adjourning out of its closed session that had started at 5:30 pm, the first item on the panel’s agenda following the invocation and pledge of allegiance was a closed session report in which the city attorney was to tell whether or not any reportable action had been taken with regard to seven issues enumerated on the closed session agenda, those being conferences with legal counsel relating to three existing lawsuits  – People of the State of California v. MJ Dispensary, Inc; Redevelopment Agency of San Bernardino v. DMC Investment Holdings, LLC; Placo San Bernardino, LLC v. City of San Bernardino, a conference with legal counsel relating to one unspecified case of anticipated litigation, the employee evaluation of the city manager, the dismissal of the city manager, and a conference involving real estate property negotiations relating to a portion of the surface parking lot area of the former Carousel Mall. Upon the conclusion of the pledge of allegiance, however, Valdivia skipped over the closed session report and went directly to the next item on the agenda, entailing presentations and the issuance of proclamations. Neither councilmembers Sanchez, Ibarra, Shorett, Nickel, Richard nor Mulvihill protested. Acting City Manager Teri Ledoux, elected City Attorney Gary Saenz, appointed Assistant City Attorney Sonia Carvalho and elected City Clerk Georgeann Hanna acceded to Valdivia’s parliamentary legerdemain, and there has been no official reporting of what action or non-action took place in the council’s closed session.
-Mark Gutglueck

By clicking on the blue portal below, you can download a PDF of the April 26 edition of the San Bernardino County Sentinel.

Sentinel 04-26-19

Steve Dukett

Steve Dukett’s exit as Upland’s development services manager earlier this year was proceeded by a verbal dispute that escalated into a physical altercation with the city’s senior information technology technician.

Dukett is a notable and controversial personage in local government in San Bernardino County and elsewhere in California. For the last dozen years he has functioned primarily in the role of consultant to governmental entities through his employer, Urban Futures.

A longtime governmental employee, Dukett worked with a number of municipal entities in management, including stints as the redevelopment director with the cities of Redlands, Upland, Hesperia, Ontario, Lancaster and San Bernardino. He was briefly, in the late 1990s, the interim city manager in Hesperia. His employment in Upland took place during the reign of then-Mayor John Pomierski. At present he pulls a $168,128.36 public pension consisting of $114,920 per year provided to him by the California Public Employees Retirement System based on his 29.43 years with various municipal entities including Upland and Hesperia, as well as $53,208.36 from the retirement system Los Angeles County has for its public employees based on 12.42 years he worked there, including within the county administrative office.

Dukett is one of three managing partners with Urban Futures, a full service municipal consulting firm that carries out contractual work for cities, counties, school districts and special districts. The company consists of public finance advisors and functionaries, public management advisors, as well as individuals engaged in economic development and real estate advisory and analytics. Dukett’s range of expertise extends to all of these categories, and his profile put out by the company credits him with the planning and implementation of economic and community development, affordable housing, asset management, public facility, public infrastructure financing and grant programs. No fewer than 81 California cities, counties, districts or agencies utilize the services of Urban Futures, including Adelanto Barstow, Grand Terrace, Highland, San Bernardino and Upland in San Bernardino County.

Urban Futures’ client list exists as a virtual who’s who list of California cities that have been pushed to extremity by the vicissitudes of the economy or internal poor management. In this way, the actions taken by these cities in accordance with the company’s direction is periodically extreme or ruthless. In some cases, such as in Upland, Urban Futures has assisted the city in making arrangements for the issuance of special tax bonds ultimately to be born by the purchasers of the residential properties within the subdivisions against which those bonds were issued under the city’s authority, so to provide the developer of those residential projects with the funding to create the infrastructure needed to allow the development to proceed. Such arrangements grow out of the city’s desire to facilitate development as well as the unwillingness of the developer to shoulder, ultimately, the cost of that infrastructure. This results in the purchasers of the residential units to either learn or realize, often after they have made the purchases, that in addition to their mortgage payments and normal property tax burdens, they have been saddled with an extra $3,000 to $4,000-per-year bond debt service payment as a consequence of their home ownership. Urban Futures insists such arrangements are entirely legal and that the minimal legal disclosure of the financing arrangements are made to the residential property purchasers.

Urban Futures often involves itself in providing services, including advisory, document preparation and application assistance for the refinancing of a city’s bonded indebtedness. Virtually all of the bond debt refinancings undertaken in accordance with Urban Futures’ advisal entail a lowering of the interest rates, resulting in an immediate reduction in the city’s ongoing payments to service that debt. Those refinancings, however, generally involve extending the period of bonded indebtedness many years into the future well beyond the original life of those bonds, such that overall, the cities doing the refinancings pay substantially more to retire the original debt than would be the case if no refinancing had been made. Urban Futures’ critics have suggested that in these cases, the company’s advice to it clients is driven more by the interest the company has in securing for itself fees associated with doing the refinancings than the actual long term financial interest of the city and its taxpayers.

Perhaps Urban Futures most controversial engagement in San Bernardino County in the last decade relates to the work it did for the City of San Bernardino.

In 2012, after nearly a decade of consistent deficit spending, the City of San Bernardino found itself in an intractable financial crisis, with $80 million in unfunded liabilities and $49 million more in annual operating costs than income. After then-City Manager Charles McNeely resigned, his assistant, Andrea Travis-Miller, assumed the city’s helm, and after huddling with then-Finance Director Jason Simpson, they generated a report to the city council in which the duo recommended that the city seek Chapter Nine bankruptcy protection. In compliance with that recommendation, the city council gave authorization to do so, and the filing was made in August 2012. Travis-Miller and Simpson remained in place for six more months, but then departed the city just before the onset of spring in 2013. At that point, Urban Futures was retained to oversee the city’s fiscal affairs, to provide, in essence, the services of the city’s finance director and the finance department’s senior staff.

In addition to serving as the city’s finance department, Urban Futures was also enlisted to serve among the bevy of advisors to the city – including itself, the law firm of Stradling Yocca Carlson & Rauth; Management Partners Inc.; Bartel Associates, LLC; Bienert Miller & Katzman PLC; the Law Office of Linda Daube; Rust Omni; and McDermott Will and Emery – with with regard to its bankruptcy and the effort to make an exit from that status.

The city lingered in bankruptcy for nearly five years, during which time Urban Futures, Stradling Yocca Carlson & Rauth; Management Partners Inc., Bartel Associates, LLC; Bienert Miller & Katzman PLC; the Law Office of Linda Daube; Rust Omni; and McDermott Will and Emery formulated a strategy to saddle the city’s residents with higher taxes without holding a vote and finding a creative way to stiff a multitude of its creditors and slip out the backdoor without paying its debts.

One part of that formula was a plan to save money by closing out the city’s 137-year-old fire department, have the county fire department take on fire protection in the city, and pocket the savings from the closure while having all residents and businesses pay a $143 fire service assessment to the county to pay for a service the residents and entrepreneurs were already paying for with their sales and property tax. The city city also simply skipped out on much of what it owed to the city’s vendors and creditors, such as Luxembourg-based EEPK, holders of the city’s pension bonds, and Ambac Assurance Corp, which indemnified some of those bonds, who were given 40 percent of what they were owed. Others the city owed money to fared even more poorly, such as litigants and claimants against the city, including ones who had prevailed in certain lawsuits, among them those alleging they had endured civil rights violations relating to excessive use of force by the police department. Those entities and the lawyers representing them were given just a penny on the dollar for the first $1 million in judgments against the city.

Nevertheless, Urban Futures, Stradling Yocca Carlson & Rauth; Management Partners Inc., Bartel Associates, LLC; Bienert Miller & Katzman PLC; the Law Office of Linda Daube; Rust Omni; and McDermott Will and Emery – the entities who helped formulate the game plan of having the city not pay its debts – were provided with 100 percent remuneration for those services, which ran to more than $25 million – $25,193,340 to be precise. Stradling Yocca Carlson & Rauth, which represented the city in bankruptcy court, was paid in full on the $19,470,878 it billed the city. Urban Futures, Inc. was paid $2,327,665 for bankruptcy related services, including refinancing loans and bond financing and managing the disposition of various municipal assets. Management Partners Inc. received $1,466,190. Bartel Associates, LLC, was paid $214,050. Bienert Miller & Katzman PLC was paid $441,340. The Law Office of Linda Daube was paid $644,317. Rust Omni was paid $284,646. McDermott Will and Emery was paid $283,103.

In the early 2000s, while John Pomierski was mayor, city management in Upland made a series of concessions to the city’s employee unions, lessening the work week to four days a week, increasing salaries and upping benefits. Because the formula for calculating benefits, particularly pensions, include as a multiplying factor the top annual salary a retiree received as an employee, the city has made hefty commitments to its current and former employees in terms of pensions, such that the present projected future pension liability, which grows with each passing year, now stands at more than $121 million. The city must make ongoing payments into the California Public Employee Retirement System to stay abreast of this cost, which at this point means that of the city’s roughly $42 million annual general fund budget, more than $8 million – exceeding 19 percent – must go to the California Public Employee Retirement Fund.

In 2012 and 2013, Upland was teetering on the abyss of bankruptcy, with Standard and Poor’s downgrading the city’s credit rating and the certified public accounting firm of Mayer Hoffman and McCann stated in its auditor’s opinion from 2012 that serious questions with regard to the Upland’s solvency had emerged to the point that there was a serious question as to whether the city “will be unable to continue as a going concern.” Hence, the city’s management felt, given the overly generous concessions that had been made to the city’s employee unions previously, that maintaining existing salary levels without salary increases going forward were in order.

Over the last two years, the city’s employees’ bargaining units have sought substantial salary increases in collective bargaining exchanges with city leaders. In recent months, the union members have taken to wearing pins emblazoned with “11,” symbolic of the number of years they have worked since having last had a contract or cost of living adjustment.

Last November, Jeannette Vagnozzi, who was formerly the city’s deputy city manager, city clerk, administrative services director and head of human services, was promoted to city manager. Vagnozzi is decidedly unpopular with a small but quite vocal and active group of citizen activists. The city’s employees’ union leaders, reading the strong sentiment against Vagnozzi, have likewise intensified their efforts to achieve a new contract by personalized attacks upon Vagnozzi.

Vagnozzi, meanwhile, is caught between three hostile forces, consisting of two members of the city council – Rudy Zuniga and Janice Elliott – who would fire her if a third vote among their colleagues materializes to do so; city resident activists calling for her head; and the city’s municipal employee union leaders and members who believe that their continuing pressure on Vagnozzi will pay dividends. The union leaders and the union members hope Vagnozzi will cave under the pressure and simply provide them with the raises, said to be in the five to six percent range, they are demanding. If Vagnozzi holds the line on that issue, then her firing could yet benefit them, since her replacement would come to the bargaining table knowing that his or her predecessor had lost her job, at least in some measure, because of not being able to keep peace with the city’s employees.

Last year, with the departure Jeff Zwack as Upland’s development services director, the city hired Steve Dukett on a contractual basis to fill that void while seeking out Zwack’s replacement. As part of the city’s management team, Dukett worked closely with Vagnozzi. As no permanent replacement for Zwack materialized, Dukett remained in place.

In January, 77 of 83 members of the Upland City Employees Association taking part in a poll expressed no confidence in Vagnozzi, a pointed stb at her for her toleration of maintaining the city’s pay grade status quo, given that the city employees had gone more than a decade without a cost of living adjustment. At the January 14, 2019 Upland City Council meeting, Rami Asad, the former president of the Upland City Employees Association, and April Flores, the president of the Upland City Employees Association, spoke during the public comments forum, announcing the no confidence vote against the city manager and articulating what they said was the union members’ collective disdain for Vagnozzi.

Eight days later, on January 22, 2019, Dukett buttonholed Asad, who works within the city’s informational technology division, and made clear that in the divide between management and labor, he came down on the side of management. Dukett’s line of authority as the city’s contract development services manager did not extend to supervision of Asad. Dukett offered his prediction that the union’s tactics would not succeed, saying that they could count on having to invest in union pins with the number 12. The exchange grew heated, and according to witnesses and a video of the incident caught on the cell phone of a city employee, Dukett tapped Asad several times on the chest with his index finger as he expressed his views.

According to a letter dated Februaryyyy 20, 2019 from Joan Heithoff, a labor representative with the Long Beach-based City Employees Association, to Richard Jeganathan, the City of Upland’s information technology division manager, “Mr. Asad asked Mr. Dukett to stop harassing him. When Mr. Asad told Mr. Dukett to act professional and not get involved in negotiations issues, Mr. Dukett told Mr. Asad that he was the one who was not acting professionally. Mr. Dukett persisted in physically poking and verbally harassing Mr. Asad, including invading Mr. Asad’s personal space, in regard to Mr. Asad’s union activities.”

Accounts of what occurred next vary somewhat.

The next day, January 23, 2019, Asad emailed Vagnozzi, indicating that he found Dukett’s presence near his workstation intimidating and that he therefore intended to leave work that day. Vagnozzi summoned Asad to her office, where she informed him that Dukett would remain with the city until the expiration of his contract on January 31, but would be departing thereafter. She said that for the interim until Dukett departed, Asad would be provided with temporary work quarters outside of City Hall at another city facility. Asad characterized that as an unacceptable solution, as it was Dukett, he maintained, who had created the hostile work environment. Asad said his being forced to abandon his normal workplace to accommodate Dukett implied that Asad was being deemed responsible for what he characterized as an assault by Dukett. Being forced out of his workstation, even for the relatively short duration of a week, Asad insisted, was tantamount to being disciplined. Vagnozzi said she was doing her best to work through a difficult situation, while seeking to maintain a safe, peaceful and productive work environment. She said that all parties needed to meet each other halfway. She said that Dukett would apologize for his action and any misunderstanding, and that everyone could then get back to work.

Asad stated that he was not interested in nor would he accept an apology from Dukett, and he would not leave his own office. That being the case, Vagnozzi said, Asad must prepare himself to work in close proximity to Dukett, as Dukett would not be leaving his assigned office until his contract was expired. Asad then accused Vagnozzi of gender bias, saying she would be taking steps to protect him if he were a woman. He reiterated that he was not comfortable having to try to avoid Mr. Dukett as he worked. Vagnozzi offered her view that the atmosphere of intimidation at City Hall included action by union members and the union itself, of which Asad was the immediate past president. As city manager, she said, she was herelf subjected to a hostile work environment, and that she felt she needed to remain clear of certain employees who were hostile toward her.

At one point, Vagnozzi told Asad he could avoid having to deal with Dukett by not coming to work, and that he would yet get paid.

According to Heithoff, the City Employees Association employee representative for Upland, Asad was given to understand based upon what Vagnozzi said, that she was going to arrange for that day, January 23, to be Dukett’s last day at City Hall.

Either Asad misunderstood, Vagnozzi had deliberately misled him or she lost her nerve in having to execute upon her statement and failed to convey to Dukett that he should make himself scarce at City Hall because the next day, January 24, 2019, Dukett was again present at his workplace near Asad’s workstation.

Asad filed a report with the city’s human resources department, which under the city’s policy should have triggered an inquiry by the city’s human resources director in conjunction with the city manager, chief of police, city clerk and the city’s labor law counsel, a group known as the workplace crisis management team. With Dukett’s departure from the city to take place in any event as of January 31, the matter was deemed moot and the team was not assembled.

According to Heithoff, “On January 28, 2019 Mr. Asad also was told by a witness to the incident, Jaime Davidson, that Mr. Dukett had contacted her and the other witness and told them that an investigator would be contacting them. In a text message to Mr. Asad, Ms. Davidson alleged that Mr. Dukett said to both witnesses that he was their manager and friend and that Mr. Asad was lying.”

After Dukett’s departure, Asad, Heithoff and the union pressed the matter, doubling down on allegations that Vagnozzi had failed to respond appropriately, and seeking an independent outside investigation of the incident. According to Heithoof, because the city currently does not have a human resources director on staff, “the city manager is currently the acting human resources director, which we believe is a conflict of interest, considering her involvement in the case. Due to the chain of command for human resources staff, we do not have confidence in human resources to conduct a fair and thorough investigation.” Heithoff demanded that the city hire a “neutral investigator” to conduct an inquiry and report the findings to the police chief, public works director and the city council.

It does not appear that the city went to the expense of hiring an investigator, but the Sentinel is informed that Police Chief Darren Goodman somewhat reluctantly had his department look into the matter. Reportedly, Dukett told investigators he had not been disciplined, chastised or in any way questioned by Vagnozzi about his exchange with Asad. A well-placed source said Goodman considers the matter to be one involving “workplace politics” that was inappropriate for his investigators to have become involved in, and the department has made no recommendation regarding any further action in the matter.

Dukett told the Sentinel it was Asad who was acting inappropriately and not he.

“I am aware of this person’s conduct,” he said. “My answer is really simple: Not one thing of what you said is true. I can’t explain why the person has alleged such things and I don’t know why that is happening. I don’t know why he has said what he said. Typically, he sometimes gets angry. I can’t explain what his motivation is to make allegations that are untrue.”

Told that the report to the Sentinel was that he had confronted Asad over the union’s beef with the city manager, Dukett said, “That is interesting. I hardly ever shared words with this person. I’m not saying he doesn’t believe in his own opinion, but I don’t know what makes him tick.”

Dukett said he was not caught up in nor interested in the union’s activity, one way or the other. “I wasn’t an employee,” he said. “I was a consultant; I was never involved with the employees. I wasn’t involved and I am not going to psychoanalyze anyone. As far as I am concerned this whole thing is one of the most bizarre things I have ever experienced. It’s not my intent to put any more meat on the bones.”

Dukett continued, “I know what has been alleged, and those allegations are not true. There has not been any contact between me and Jeannette Vagnozzi relating to any employees or anything at all since I left. Now that my contract has expired according to the terms, I told her thanks for the opportunity and wished her well. I was there longer than anyone expected because it took them longer to hire a permanent director. I was originally going to be there three or four months. Ultimately, I was there for a little more than six months. It’s all taken care of, and the city’s new director is very capable. As to what is being said about me, I absolutely deny all of the allegations.”

San Bernardino County saw a 23.1 percent increase in the number of homeless individuals counted in the census specifically targeting the dispossessed in January 2019 than was counted in a similar survey done in January 2018.
According to the San Bernardino 2019 Homeless Count and Subpopulation Survey Final Report released this week, “There were 2,607 persons who were homeless on Thursday, January 24, 2019. The previous homeless count and subpopulation survey was completed in 2018 when 2,118 persons were counted. A comparison of the last two counts reveals that 489 more persons were counted in 2019, which represents an increase of 23.1 percent.”
Dennis Culhane, Ph.D., a social science researcher with primary expertise in the area of homelessness and assisted housing policy, said the higher number of homeless counted this year was a reflection of the improved tallying and surveying methodologies used during the January 2019 count. Culhane said. “The most recent year included a number of improvements intended to increase coverage, and efficiency. These improvements no doubt contributed to the increase in observed persons who were unsheltered on the night of the enumeration. Simply put, broader coverage alone will yield a higher count, if one uses a known location methodology, as San Bernardino County has done, and as is an approved method by HUD.” The improved methods included targeted mapping, closer monitoring of undocumented areas, and an increase in the number of volunteers making the counts.
The report’s executive summary states, “Of the 2,608 persons counted in 2019, 1,920 or 73.6 percent were unsheltered, which is defined by the U.S. Department of Housing and Urban Development (HUD) as “An individual or family who lacks a fixed, regular, and adequate nighttime residence, meaning: (i) An individual or family with a primary nighttime residence that is a public or private place not designed for or ordinarily used as a regular sleeping accommodation for human beings.”
The summary continues, “HUD also requires that the total number of unsheltered and sheltered adults be broken down by various subpopulations including age, gender, race, and ethnicity. Of the 1,920 unsheltered persons counted, 1,873 were adults, five were unaccompanied youth under age 18, and 42 were children under age 18 in families.”
The county seat again led all of the county’s cities and jurisdictions with the number of homeless, 890, followed once again by Victorville, with 333, which had the second highest total.
According to the figures released, San Bernardino had a total of 890 homeless; Victorville 333; followed by Redlands with 183, Rialto with 133, and Ontario with 128.
The cities hosting the top five highest totals of homeless in the county this year was different than the list tallied last year when San Berrnardino, Victorville and Redlands likewise were the three cities at the top of the list, followed by Upland and Barstow. In 2018, Ontario was in sixth place and Rialto in eighth.
This year, in those unincorporated county areas without an association to a particular district or community, there were 115 homeless. The City of Fontana had 94; Highland 72; the Town of Yucca Valley, which is incorporated, had 72; Barstow 62; Colton 58; Upland 58; Rancho Cucamonga 58; Twentynine Palms 40; and incorporated Big Bear Lake had 39.
The unincorporated community of Joshua Tree had 30. Needles had 29 homeless living within its city limits; and Loma Linda 25. The unincorporated community of Bloomington had 24. Hesperia had 24; Montclair 24; the incorporated Town of Apple Valley 23; Chino 23; Yucaipa 16; Adelanto 14; Chino Hills had four; and Grand Terrace one. Among remaining unincorporated county areas, Muscoy had 13; Crestline seven; Lake Arrowhead six; Mentone/Crafton three; the unincorporated area of Big Bear/Sugarloaf two; Cajon Canyon two; Running Springs one; and Yermo one.
It thus appears that the greatest saturation in terms of homeless in ratio to a specific area’s population was incorporated Big Bear, where the population is 5,019 and the homeless tally 39, a ratio of 1 to 129. In Joshua Tree, with a population of 7,414 there was a ratio of one homeless person to 247 residents. In Yucca Valley, where the total population has reached 22,900, the ratio is 318 to one. In San Bernardino the ratio is roughly 247 to one. In Redlands, the ratio is one to 391.
Of the total homeless population, 1,342 or 71 percent are male, 503 or 71. 6 percent are female; four or 0.2 percent are transgender; 16 or 0.9 percent are gender non-conforming and the gender/orientation of eight or 0.4 percent was unknown. There was one unaccompanied male under the age of 18. There were four unaccompanied females under the age of 18. There were 554 homeless individuals or 29.6 percent identified as Hispanic or Latino, 1,249 or 66.7 percent identified as non-Hispanic or Latino, and 70 or 3.7 percent of unknown ethnicity.
By race, 986 or 52.6 percent were white; 357 or 19.1 percent were black or African-American; 46 or 2.5 percent were American Indian or Alaskan Native; 13 or 0.7 percent were Asian; 11 or 0.6 percent were Native Hawaiian or other Pacific Islander; 348 or 18.5 percent were of multiple race ancestry; and 112 or 6 percent were of unknown race.
There were 729 children living with their families who were homeless.
Among adults and unaccompanied children, five or 0.3 percent, in total, were under the age of 18; 135 or 7.2 percent were aged 18 to 24; 612 or 32.6 percent were aged 25 to 39; 394 or 21 percent were aged 40 to 49; 247 or 13.1 percent were aged 50 to 54; 277 or 14.7 percent were aged 55 to 61; and 145 or 7.7 percent were over the age of 62. The age could not be determined for 63 or 3.4 percent.
The report noted a “significant” increase in the number of people who have become homeless for the first time and that a “significant number of persons are aging on the streets.
According to the report, “Particular attention should be given to those persons who are languishing on the streets and who have life-threatening chronic health conditions. During the recent point-in-time count, persons counted were asked ‘Has a doctor or other medical professional ever told you that you have a chronic health condition that is life-threatening such as heart, lung, liver, kidney or cancerous disease?’ Three hundred and forty-six (346) unsheltered persons or 18.5% of all unsheltered adults stated ‘yes.’ Particular attention should also be given to persons aging on the streets. There is a significant number of persons who are aging on the streets. In 2019, the number of persons counted as unsheltered who were age 55+ was 422. In 2018, the number of persons counted as unsheltered who were age 55+ was 246. This represents an increase of 176 persons or 71.5%. According to the preponderance of research in this area, the growth of elder homelessness can be attributed to the aging of existing chronically homeless individuals. Thus, targeting the needs of the elderly homeless by making sure that housing that is accessible with persons with disabilities and transportation to medical appointments is available is important.”
-Mark Gutglueck