(August 10)  The Upland City Council and three of the city’s senior staff members stepped into controversy last week when they sought to quietly push through an ordinance that gives the city manager and its development services director the authority to impose on residents and businesses administrative fines of up to $31,000 per month.
A vote on the approval of the controversial ordinance was scheduled for and made on July 30, at a city council meeting at which neither mayor Ray Musser nor city manager Stephen Dunn were in attendance. The ordinance itself and its language were not made available to the public prior to nor during the meeting and the ordinance was not publicly released until eight days after the city council voted to approve it.
While the city’s development services director publicly stated that the ordinance was not intended as a revenue generating ploy, residents chortled at that claim and no other city officials were willing to stand by that assertion. Nevertheless, the four council members present at the July 30 meeting voted unanimously to give the ordinance what is called a first reading, i.e. tentative approval. A second reading of the ordinance, which gives the law final approval, is scheduled for August 13.
The ordinance substantially intensifies City Hall’s bureaucratic power and increases the amounts of the fines that can be levied. Moreover, the ordinance also sets up a policy similar to that utilized in other municipalities that empowers the city to not only issue citations but adjudicate them and set the penalty, precluding, at least in the first three phases of the process, the individual who is cited from having the matter heard and the fine set by an independent arbiter, such as the municipal or superior court. Only upon being ajuged guilty and assessed with the fine, can a resident or business entity that is cited appeal the matter to an actual court.
The ordinance was drafted by interim city attorney Jimmy Gutierrez and development services director Jeff Zwack. Zwack said the ordinance was based upon similar administrative citation provisions contained in nearby cities’ municipal codes.
According to Zwack, who spoke to the Sentinel on August 7, “We have a 95 percent compliance rate with most of our code enforcement citations. What this is aimed at is the five percent who do not comply. Dealing with those five percent becomes extremely expensive and time consuming. We do not presently have adequate tools. If we issue a citation and there is no response after a second citation we have go to the city prosecutor and go into state or county court. That is a 60-day delay just to start the process and it can take up to a year or more before there is any action taken. A hearing can take up to half a day and that becomes very expensive. The administrative citations will save time and general fund money.
“The intent is to streamline the process and facilitate a resolution and accomplish in 60 days what in our current process could take six months,” Zwack continued. “Our current process is not efficient and wastes a lot of staff time. Our intent is to incentivize compliance with the threat of fines. No fine is attached until after the second letter [notifying the alleged offender of the ongoing violation]. The ordinance establishes fines of between $250 and $1,000, depending on the nature of the issue. At the low end would be having an inoperative vehicle parked on a lawn. At the high end would be a threat to public health or safety such as a broken sewer main that is emptying into the street and flowing into a storm drain. The ordinance gives us the ability to use a higher fine to get compliance. That is a decision of departmental policy made by the city manager and development services director.”
Zwack on July 30, told the council that the fines would range from $100 to $1,000 daily. The ordinance states that the “administrative fine for a violation shall be not less than one hundred dollars ($100.00) per day nor more than one thousand dollars ($1,000) per day for each violation. The amount of any fine imposed hereunder shall be determined by the [development services] director. The director may escalate this range of fines for repeated violations that occur within a 12-month period.”
At the July 30 meeting Zwack made clear that the amounts in the fine schedule were a “per day fee.” He went on to say that the city “is not looking to create this as a revenue source.”
Zwack emphasized that there would be two letters giving notice of violation before a fine was imposed. If the fines are not paid, a lien against the property in question is, under the terms of the ordinance, to be recorded on the county tax roll.
No members of the public addressed the issue at the July 30 meeting. A copy of the ordinance was not included with the agenda for the meeting and no copy of the ordinance was on hand for public perusal at the meeting. Efforts initiated by the Sentinel to obtain a copy of the ordinance were unsuccessful until August 7.
During a previous public hearing the evening of August 7 related to the city’s action to record liens against property owners whose properties had undergone weed abatement at the city’s expense, two of those property owners, Bill Kimble and Christopher Scarzo, told the city council, and presented documentation to the effect that, they had themselves performed weed abatement on their properties prior to the city’s contractor’s action and that notification of their right to make an appeal of the lien had come after the deadline for making the appeal.
On July 30, Zwack told the council that he had made sure that they and members of the fire and police committee had received copies of the ordinance. When asked on August 7 by the Sentinel why a copy of the ordinance had not been made available to the public before or during the July 30 meeting, Zwack said, “That question is best answered by the city attorney.” The council waived full reading of the ordinance before voting on it.
Some members of the public in attendance at the meeting said they were caught flatfooted by the item, which was given only a sketchy description on the agenda. One such individual was Albert Pattison, a landowner in Upland. Pattison told the Sentinel Zwack’s presentation of the ordinance and the council’s brief discussion of it elicited his interest but that he felt reluctant to weigh in on it because he did not have a copy of the ordinance before him and did not want to make uninformed statements or ask poorly sourced questions on the public record. Pattison said he initiated an attempt to obtain a copy of the ordinance at the city clerk’s office the following day, and was referred to the library but succeeded only in obtaining a DVD of the council meeting he had attended. “They were very courteous to me at the city clerk’s office,” Pattison told the Sentinel, “but I never did obtain the language of the ordinance, which was what I was looking for.”
Other Upland residents and business owners have since expressed concern about the ordinance, including the way in which it places all of the citing, adjudicating and fining authority in the hands of city officials, as well as the steep fines it would impose. Others have said they are concerned that the liens on the properties in question will do nothing to alleviate the code violations and will be punitive to those who will eventually acquire the properties rather than those responsible for the violations.
Zwack insisted that the ordinance did not create a kangaroo court by violating constitutional due process protections. “This doesn’t make us judge and jury,” Zwack said. He said that the panel appointed by the city manager and him to hear the cases for the most part would not be city employees but “made up by community residents knowledgeable in building codes and other relevant issues. The outcome is appealable to a county judge.” He said the liens on the property would not prove to be a major factor in Upland and would not be likely to discourage prospective buyers from purchasing the distressed properties.
While Zwack said the ordinance was based on similar processes used in other cities, he did not address recent court rulings that have held that municipalities’ use of administrative hearing officers employed by those cities create a conflict in which the fundamental fairness of the hearing process is compromised and the right to due process and other constitutional protections are violated. In one such case out of Hesperia, that city’s imposition of a total of $129,000 in fines against Esther Duran and  her daughter, Janet, for maintaining three too many animals on their agricultural/residential zoned property imposed through the administrative hearing process was reversed by U.S. District Court Judge John E. McDermott. McDermott ruled that the city’s action against the Durans in seizing their animals and imposing the punitive fines was improper and that their animals would have to be returned to them, the fines, which were recorded against their property as tax liens would have to be expunged and that the city would instead need to pay them $200,000 in damages plus attorney fees. The Durans were represented by Upland-based attorney Louis Fazzi.
A calculation many cities make in using the administrative citation process against their citizens is that most do not have the financial wherewithal to fight City Hall. On those occasions where those citizens do have the means or in such cases where a lawyer like Fazzi is willing to represent them pro bono, the outcome can prove financially prohibitive for those cities.
City manager Steve Dunn, who was vacationing the week of the July 30 council meeting, told the Sentinel “The thing driving this [the administrative citation ordinance] was the expense of pursuing some code enforcement cases. If we cite someone and they give us the finger, we have to take them to court. The amount of dollars we then have to use can become excessive. That ordinance creates a mechanism to ensure less costly compliance. Could it be abused? Without a doubt, it could. It isn’t our intent to go after small cases with this. We consider it as something that would be useful against the [Dineen Trucking] dirt pile and the medical marijuana clinic. If we had this ordinance before, we would not have needed to go to court and spend hundreds of thousands of dollars. We could have done it administratively. But it can be abused. It needs checks and balances put in there. Right now, it [the ordinance] lacks checks and balances.”
Zwack said he stood by the ordinance as it is written and as it was tentatively approved by the city council last week.
“My opinion is this is what everyone wants,” he said. “We will see whatever the community wants and it is up to the city council to make that decision.”

(August 10)  An effort to have city voters in November vote for or against keeping provisions of the San Bernardino city charter which lock in a pay scale for policemen and firefighters at a level that is roughly 15 percent higher than that paid to public safety employees in California cities sized similarly to San Bernardino failed this week on a 3-4 vote of the city council.
Some members of the community and at least three members of the city council are in favor of rescinding that portion of the charter relating to the pay of police and fire department employees. That provision was passed in a citywide vote years ago during less austere financial times. The city of San Bernardino has now filed for bankruptcy, however, and it is the contention of San Bernardino Mayor Patrick Morris that the generous salaries being paid city employees are  major factors in the erosion of the city’s financial condition.
The portion of the charter that relates to police and fire salaries, known as Charter Section 186, cannot be removed without another vote of the city’s residents. But the normal process for qualifying citizen initiatives requires that ten percent of the city’s registered voters sign a petition calling for such a ballot measure. Gathering that many signatures by August 10, the deadline for qualifying a measure for the November ballot, is a logistical impossibility. The other alternative would be for the city council to use its authority as an elected body to ask the registrar of voters to put the initiative on the ballot. A vote to do just that was taken by the city council on August 6. Councilmen Rikke Van Johnson and Fred Shorett and Councilwoman Virginia Marquez voted to place the measure on the ballot, but that was not sufficient, since councilwoman Wendy McCammack and councilmen Robert Jenkins, John Valdivia and Chas Kelley opposed the move. Morris, who is not empowered to votes unless there is a tie, did not participate in the vote.
The council did, however, collectively and unanimously vote to make it easier to lay off non-safety employees and to suspend cash-outs to employees who are resigning or being laid off.
The council voted to change civil service regulations such that employees will now have only two days rather than the previous ten days to appeal a layoff and a single day to ask the city’s personnel department to determine if there are employees of less seniority who can be removed in the laid off employee’s stead. The council also acted to suspend payouts to departing employees and initiate negotiations with them on a reduced payout. According to acting city manager Andrea Travis-Miller, 56 city employees have resigned since the city council indicated on July 10 it intended to seek bankruptcy protection. Some city employees took flight to prevent being subject to an anticipated future effort by the city to reduce pensions. Others wanted to cash in on accrued leave payouts. Some employees have as much as $300,000 in accrued leave time due them under the policy the city had in place. With the city’s bankruptcy filing, which was made last week, that policy has now been suspended. In July during the three weeks following the announcement of the intended bankruptcy filing alone, the city paid out $2 million to employees who had abruptly resigned.

(August 10)  District attorney Mike Ramos’s promotion of the woman his employees refer to as his live-in girlfriend to the position of chief deputy district attorney effective next month has had a deleterious impact on office morale, members of the prosecutor’s office have told the Sentinel.
A few months ago, according to prosecutors, Mike Ramos left his wife, Gretchen, and took up with deputy district attorney Mary Ashley.
Ashley, who has also gone by the name of Mary Frances Ashley-Martinez, was hired as a deputy prosecutor under former district attorney Dennis Stout in 1998. In 2004, Ashley was assigned to head the Victorville office of the district attorney’s newly-formed Family Violence Unit. She remained in that capacity until 2007. Ashley has served as a supervising deputy district attorney since 2007 in the district attorney’s office’s San Bernardino juvenile, Victorville juvenile and Joshua Tree offices.
Over the last year, as the retirement of assistant district attorney Dennis Christy was being anticipated, a commitment was made to promote Gary Roth, currently serving in Victorville as the chief deputy district attorney in the county’s desert division, to assistant district attorney. In turn, it was widely expected throughout the office that supervising deputy district attorney Richard Young, now overseeing the Fontana prosecutor’s division, would be tapped to succeed Roth. Young in recent years has been entrusted with several top-tier and high profile prosecutorial assignments, including murder and manslaughter cases, the review of officer involved shootings and delicate matters such as those involving trafficking in child pornography and accusations that a teacher had employed sexual battery perpetrated by some of his students against other students as a classroom disciplinary tool. Moreover, Young had cultivated what appeared to be a strong professional relationship with Ramos by supporting him politically in years past and endorsing other politicians with whom Ramos was aligned.
On July 18, however, Young had the rug yanked out from under him when Ramos, in an interoffice memo to all district attorney’s staff, announced that Ashley was being promoted to the position of chief deputy district attorney, effective September 6.
“Mary will be replacing Gary Roth as the chief deputy district attorney in the desert division,” the memo states. “Please join me in welcoming Mary Ashley as our new chief deputy district attorney.”
Members of the district attorney’s office drew an immediate connection between Ashley’s promotion and her relationship with Ramos, which was exposed earlier this year, members of the department say, when Ashley sent a cellular phone text message to another member of the office, deputy district attorney Suzanne Patton, telling her that Ramos was at her residence. Word of Ramos’s liaison with Ashley leaked out from there, spreading to numerous other members of the district attorney’s office, as well as at least two county judges.
Efforts to reach Ramos and Ashley for confirmation of the reports were channeled to district attorney’s spokesman Christopher Lee, who told the Sentinel, “This is one of those things where you are crossing the line. I am not going to comment on the personal life of the district attorney. I am not naïve. I know what is going on. I am not going to trash the district attorney, who I have the utmost respect for.”
To the question about whether the perception of Ramos’s favoritism toward Ashley was damaging office morale, Lee said, “I am insulted by this inquiry. To be honest with you, it is nonsense.”
Members of the prosecutor’s office said Ashley was a qualified and competent attorney who has done admirable work in prosecuting sexual crimes against children as well as crimes involving violence against women and children, and that she had more recently taken on evaluations of officer involved shootings. Nevertheless, most opined that she lacked the depth and breadth of office experience that Young and some of their other colleagues, deputy district attorney Denise Trager Dvorak among them,  possessed. Some suggested Ramos’s choice of Ashley to succeed Roth undercut  the esprit de corps and ethos of merit that the district attorney’s office should maintain.
Two even suggested that Ramos may have put the county, himself and the office at risk by his promotion of Ashley. One referenced a lawsuit, Edna Miller et al v. Department of Corrections, which resulted in a precedent setting ruling by the California Supreme Court relating to favoritism to a governmental employee based on a relationship with her boss.
In Miller v. Department of Corrections, two former employees of the Valley State Prison for Women, Edna Miller and Frances Mackey, claimed that the warden of the prison at which they were employed accorded unwarranted favorable treatment to numerous female employees with whom the warden was having sexual affairs and that such conduct constituted sexual harassment in violation of the California Fair Employment and Housing Act.  The California Supreme Court ruled that employees passed over as Miller and Mackey were had grounds to sue the state and the Department of Corrections for both income lost and punitive damages.

(August 10)  On August 6, former Upland mayor John Pomierski was handed a two-year prison sentence by the federal judge, Virginia Phillips, before whom Pomierski on April 26 had entered a guilty plea on a bribery charge.
Pomierski, who had been Upland mayor since 2000, began shaking down local business owners and operators and others with projects pending at City Hall and before the Upland City Council as early as 2004. Utilizing a business he owned, JP Construction, as well as the construction business owned by one of his associates, John Hennes, Pomierski worked with two others, Jason Crebs and Antony  Sanchez, in perpetrating extortion and pay-off schemes. Those shakedowns targeted applicants for business, operating or construction permits in Upland who would be approached and informed that by securing the consulting services of Hennes, Crebs or Sanchez, approval of those applications could be guaranteed. Hennes was Pomierski’s appointee to the Upland Housing Appeals Board.
Upland City Hall along with the homes of Pomierski and Hennes and the Rancho Cucamonga office of Sanchez’s business were the sites of a raid by search warrant-bearing FBI and IRS agents in June 2010. In January 2011, Crebs and Sanchez were indicted by a federal grand jury for their involvement in a bribery scheme. Within a month, both had entered into plea agreements with the federal government. The last week of February 2011 Pomierski resigned as Upland mayor. On March 2, 2011, Pomierski and Hennes were indicted by a federal grand jury on 11 separate counts including bribery, extortion and conspiracy.
The overt acts described in that indictment included extortion and bribery efforts relating to two businesses in Upland, the Chronic Cantina and H3 Holistic.
Later in March 2011, Crebs withdrew his guilty plea and Sanchez, who had fled to Costa Rica, failed to appear at his arraignment. On March 25 an arrest warrant was issued for Sanchez. On April 18, 2011, Crebs entered a guilty plea to a single count of furthering a bribery conspiracy related to the Chronic Cantina as part of a revamped plea agreement by which he agreed to testify against Pomierski. Sanchez, who was still a fugitive from justice, was named as defendant in a superseding indictment. In December 2011, a plea agreement in which Hennes pleaded guilty to two of the four counts against him was unsealed. On January 15, 2012, Sanchez was taken into custody by FBI agents at Los Angeles International Airport upon his agreed-upon return to the United States. On January 17, 2012, Sanchez pleaded not guilty to extortion and bribery in federal court. He subsequently entered a guilty plea.
Pomierski’s guilty plea on April 26 pertained to his interaction with the owners of the Chronic Cantina between August 2009 and October 2009 carried out by Sanchez and Crebs, who acted as intermediaries. Representations made to the Chronic Cantina’s owners were that Pomierski would use his position with the city to obtain a new permit in exchange for money. Crebs and Sanchez were paid $10,000 and Pomierski was paid with a $5,000 check to JP Construction.
Phillips sentenced Pomierski to two years in federal prison, including six to eight months of alcohol dependency rehabilitation, as was arranged by Pomierski’s criminal lawyer, H. Dean Steward. Phillips also imposed a year of parole supervision after his release. The remaining counts against him were dismissed.
In a statement to the court, Pomierski said that by his actions he had “lost my wife, lost my friends, lost work and the job I loved the most, being mayor of Upland.”  Pomierski said the ordeal was a “difficult” one and that  “I was dead wrong. I know I will pay for it. I already have paid for it in the last two years.”
Sanchez is scheduled to be sentenced on August 13. Crebs is scheduled to be sentenced in September.

(August 10)  Jim Cox, who served two stints as Victorville city manager lasting 32 years over a 42-year period, is now seeking election to the city council.
This is Cox’s second effort at elected office, having previously vied, unsuccessfully, for the state assembly.
Cox is largely credited with having guided Victorville during its expansion from a modest desert city that was highly dependent upon the financial sustenance of the former George Air Force Base into a city that was itself the economic engine of the Victor Valley, with the lion’s share of  commercial development among the municipalities of Hesperia, Apple Valley, Adelanto and Victorville. With sales tax from that commercial development flowing into Victorville’s coffers, the city Cox headed was better situated than its neighbors to provide infrastructure and services. Cox, held an associate’s degree in accounting and a bachelor’s degree in political science from San Diego State when he was hired as administrative assistant in Victorville in 1967. Two years later he became city manager. He remained city manager for thirty years, retiring in 1999. Over those thirty years he had escorted the city to the doorstep of the 21st Century, facing down challenges such as the closure of George Air Force Base, and leading the city in its transformation into what is today the county’s fifth largest city, with a population of 115,903.
Cox had successfully pushed through Victorville’s de facto acquisition of the Air Force base property, now known as Southern California Logistics Airport. It was in the final days of his watch as city manager that the application process for what was then called the High Desert Power Project, a 830-megawatt electrical generating facility now referred to as Victorville 1, was begun. After Victorville 1 came on line, it became the single largest producer of tax revenue for the city, bringing in something close to $5 million per year.
After Cox left Victorville, the city embarked on a series of what are now considered to be missteps, including the creation of a city electrical utility division intended to recreate the success of Victorville 1 and build large and small power plants. Those efforts foundered, however, and approaching $200 million of taxpayer money controlled by the city was invested in power generating facility projects that have yet to come to fruition. In one case, the city entered into a $180 million contract with General Electric for the provision of generating equipment that was never delivered when the city failed to find a purchaser for the electricity it wanted to generate. The city then had to relinquish $50 million to General Electric as a penalty. The city issued close to $80 million in bonds to pay for these electricity-producing projects. Both the county grand jury and the Securities and Exchange Commission launched investigations into Victorville over these debacles, all of which were occurring while Cox was in retirement.
In December 2007, Cox was sought out by the town of Apple Valley to serve as town manager there. He stayed in that role for ten months, before retiring for the second time as a municipal manager. And then, the following year, Victorville, staggering under the weight of the mismanagement of its electrical utility division as well as the downturn in the national and state economy, asked him to again come out of retirement and oversee city staff once more. Cox did so, staying in that assignment for two years.
The political climate in Victorville has deteriorated considerably. Terry Caldwell, who was appointed to the Victorville City Council in 1972 and then was elected in his own right in 1974 and reelected to another eight four-year terms to become what was then the longest serving elected official in the state, decided against running for reelection in 2010. Previously, two other long serving members of the city council, Bob Hunter and Joanne Almond, had been defeated in their reelection attempts. Rudy Cabriales, another long term councilman who was formerly Victorville fire chief, has decided against running for reelection this year. Cox joins a field of eighteen who have pulled candidacy papers, including another long time incumbent, Mike Rothschild, in this year’s race.
He acknowledges the previous council made mistakes, but he insists that those were honest mistakes and not ones fueled by personal interest, greed or corruption.
“When I served as city manager, we always had balanced budgets and reserves and I believed the city councils worked for the betterment of the city and considered what was best for the city,” Cox said. “I was gone from 1999 to 2009 and when I came back I learned  what had happened. There had been a huge debt accumulated, there had been huge bond sales and the city was now in tremendous financial difficulty. When I came back I tried to get the city back on its feet. I cut labor costs and slashed the budget. I cooperated with the grand jury and the SEC, who were looking into what had happened between 2002 and 2007. After two years I felt I had done everything I could do and I retired. I had been working six days a week the first year-and-a-half and seven days a week the last six months. I felt I needed to retire. Shortly after that, I encountered a large number of people who wanted me to run. I rejected that, but I kept reading about the infighting in the city. A lot of that has to do with the accusations that were made to the grand jury. When I was with the city the last time, I worked with the grand jury. I felt there were no criminal charges that will come from that. The SEC investigation is still ongoing and I can’t talk about that. The city is getting negative comments coming its way all the time and adverse publicity.
“I think the council made some very bad decisions,” Cox continued. “I don’t think the council believed they were bad decisions at the time. This was just like homeowners who lost homes during the economic downturn because just before that they moved up and bought a nicer home and did not expect to lose their jobs. They would now admit they should have been more conservative.   Rudy Cabriales has publicly apologized and said they were bad decisions and that they should not have done that. I came in as city manager the second time after those decisions were made. I tried to be a professional and do my job and not get involved in politics. Joanne Almond was defeated.  Bob Hnter was defeated. The city manager had left for Colorado. Only two members are left on the council  – Mike Rothschild and Rudy Cabriales. I am mystified by peoples’ comments that the people in City Hall should be in jail. I say ‘What people?”  If you want to be objective about it, there are now two people who were involved in the decision to build those power plants. One, Mike Rothschild, is running. The other is not running. There is a fair possibility there will not be a single person left at City Hall [i.e., on the city council] involved in those decisions after the November election. The amount of money lost and squandered is not as huge as the naysayers want to make it out to be.”
Cox said, “Controversy is building over the power plants and expenditures at the base. These things are very expensive and have generated huge debt. Now that the state is taking over the redevelopment agency, is what remains a state debt and no longer a local debt? Nobody knows. The city pursued ideas they thought would make a lot of money. The city approved the first power plant, known as Victorville 1 back in 1998 and it produced a lot of revenue. They believed that building the second power plant would do the same.
“In regard to the $50 million that went to GE, clearly that was not thought out,” Cox continued. “On paper we are showing a loss of $132 million [for the Victorville 2 power plant]. The one certain loss at this point is the $50 million to GE, although there is a ten million dollar credit, but I doubt the city will ever use that. No elected city officials should ever lose $50 million. My own belief is that if a private corporation wants to build it [a power plant], then they should do so but we should not invest public money if there is a possibility it will be lost.”
Cox said that he is not interested in apportioning blame at this point, since that will not, he said, have any beneficial effect.
“There is a lot of negative publicity and statements made to the press hurting the city, hurting businesses, hurting investors. The more I look into it the more I felt I understood why investors or people wanting to start a business would be hesitant to come in here. I believe Victorville is a great city. I believe in accountability and transparency. I want to help run things and get this city back on track so its citizens are proud of the city rather than embarrassed. I want to quiet the naysayers and get this resolved and move on. The only reason the city exists is to serve the public. The turmoil on the city council needs to end. I have already given thirty-five and a-half years to the city. I am willing to give more, if that is what it takes.”
Cox said his qualifications to serve on the city council are well recognized.
“I understand the finances of the city inside and out,” he said. “I believe that because I understand local government that is why Apple Valley asked me to assist them. I also believe that because of my knowledge and experience the [Victorville] council asked me back because they know my background experience and reputation. I will not compromise my principles. I have long been recognized as a professional with conservative values who treats taxpayer money like it is my own. I believe the voters want someone who understands the city, who has a long history of public government experience who is committed to accountability and open government. I don’t believe they want someone whose goal is to put people in jail and shut everything down and stop progress. I have no friends and do no favors and expect to receive no favors between 7:30 a.m. and 5:30 p.m. I gave the city councils I worked for objective evaluations and I will do the same for my constituents as a city council member.”

Scott Slater, general counsel and president of Cadiz Inc., this week reprised his presentation of the Cadiz water project to the Municipal Water District of Orange County, one week after the Santa Margarita Water District certified the environmental impact report for that plan.  The Cadiz water project will extract up to 150,000 acre-feet of water per year and send it via a pipeline to Orange, Los Angeles and Riverside counties. While five southern California water agencies have already signed on as eventual recipients of the water, the Municipal Water District of Orange County (MWDOC) currently is not one of those. At MWDOC’s request, Slater’s made a presentation to update the board.  While no action was scheduled to be taken on the informational item, Slater’s “buy now” pitch came when he advised “within six months we expect to be 100 percent subscribed”   and that “18 months from now we’ll be in construction.”
The Municipal Water District of Orange County board members, some of who also serve as directors of the Los Angeles Metropolitan Water District, evinced considerably less enthusiasm for the project than had the Santa Margarita Water District board members last week.   That lack of enthusiasm may prove crucial down the road since Cadiz Inc. will need the cooperation of the Metropolitan Water District with regard to the use of its aqueducts and other water conveyance facilities to deliver the desert water to the greater Los Angeles Metropolitan Area.
The added cost of treating the Cadiz aquifer water, reportedly laced with 14 to 16 parts per billion of hexavalent chromium, has previously been cited as one of the Metropolitan Water District’s concerns.  Diluting the chromium by blending it with Colorado River water to reach the public health goal standard of  .02 parts per billion is a challenging option since the Metropolitan Water District (MWD) is already blending to bring “chrome 6” levels down.  In 2002, acting as lead agency under the California Environmental Quality Act (CEQA), the MWD ultimately rejected an earlier version of the Cadiz Water Plan which was then called the “Cadiz Groundwater Storage and Dry-Year Supply Program.”  Subsequently, Cadiz filed a lawsuit against the MWD, and though they dropped it shortly before trial, the preparation was costly for the water agency.   It is not likely the board members in attendance had forgotten that Cadiz, Inc. had filed that lawsuit.
After a 20 minute presentation, board members asked hard questions, demonstrating their reluctance to embrace the current Cadiz Water Project, in some part based upon their experience with the previously proposed project. Board member Brett Barbre observed that the district being asked to participate in the Cadiz project was essentially a suggestion that  MWDOC was not presently supplying its customers with an adequate water supply and wondered if Cadiz thought this was  justification for accepting  Cadiz’s toxic water into the Colorado River Aqueduct.
Slater threw two carrots to the Municipal Water District of Orange County. Board member Larry Dick was interested in intentionally created surplus water credits the district would get for lessening its use of Colorado River Water and whether Slater was willing to pay anything  relative to the MWDOC wheeling rate.  Slater said the credits could be obtained and that the   Municipal Water District of Orange County could up its wheeling rates to whatever level it wished.
Slater said the water to be drawn from the Cadiz Valley was not tributary to the Colorado River, an assertion that has previously been disputed by opponents of the project.
Slater reassured the board that there should be no concern over the failure of springs, since his company’s hydrologic studies show that the springs are not connected to the aquifer, and are instead fed by runoff. He essentially asserted that the springs are not artesian or forced from water pressure coming from above.
Slater cited a “quartet of criticisms” surrounding the previous version of the plan.  He said  “It became obvious to me that we were never going to make progress unless we understood issues” and identified as the four concerns the project scale, the failure of springs in the upper water shed, the potential for subsidence and dust.  The high chromium 6 level was not included within the quartet of concerns, though the board had an abiding interest in that question.
Craig Innis, a Santa Margarita Water District ratepayer who is currently considering running for a position on the district board, pointed out that Slater’s Powerpoint presentation did not include a slide of how the  chromium 6 levels at Cadiz are twice as high as the content at PG&E’s Hinkley  plant where Erin Brockovich made famous the illnesses and death caused by the contamination.  Innis then quoted Metropolitan Water general manager Ron Gastelum, who in 2000 said, “If it’s going to cost as much as Ft. Knox, we’ll look for another project.” Innis cited the possibility that the Hinkley plume migration will require additional monitoring if water is being downdrafted in the lower basins, including Cadiz 100 miles south. Innis was particularly concerned that the $425,000 in the escrow account would not cover the Santa Margarita Water District’s out-of-pocket expenses, Cadiz was almost insolvent and their loans were coming due in June of 2013 and that the  law firm representing Cadiz, Brownstein Hyatt Faber & Schreck, did not have enough money to lobby the millions of water ratepayers who’ would protest the chromium 6 in their water.  He observed that the Metropolitan Water District will not look at the chromium 6 issue until next summer  and before that could bow to public pressure over the chromium 6 issue and not accept the water.  If the Colorado River Aqueduct cannot be used, the failed project could cause the  corporation to fold and leave ratepayers holding the tab, he suggested, and he said that no matter how much money is in the escrow account, the court will put a hold on it.
He cited numerous large homeowner associations in the Rancho Santa Margarita  area with thousands of residents who are against the Cadiz Project and said “we want to be paying for water, not litigation.”
Several project opponents attending the meeting challenged the substance of Slater’s presentation.  David Lamfrom of the National Parks Conservation Association rejected Slater’s argument that the springs are not hydraulically connected and would not be impacted, offering to make available to the board the independent tests and analysis data compiled by the National Parks Conservation Association countering the findings  of the Cadiz project environmental impact report, which the association considers to be grossly flawed.
Despite the pronounced opposition to the project at public meetings, Slater referenced in his statements to the MWDOC board overwhelming support from the citizens of San Bernardino County.  Ruth Musser-Lopez, a resident and former city council member from Needles, commented that no public hearings or information meetings had been held in Needles or anywhere else east of Kelbaker Road in the district where the Cadiz water project would be located.  She said that the San Bernardino County residents most impacted by the project were excluded from the process and that the Needles mayor and city council were on record as being unanimously opposed to the current project.
Musser-Lopez also took exception to Slater’s powerpoint imagery and speech characterizing the east Mojave as aving snowcapped mountain and ice packs, saying that this was a gross misrepresentation and that snowfall in the desert was a rare thing.  A former Bureau of Land Management archaeologist working in the east Mojave for eight years, Lopez said that she had worked extensively with desert scientists and that the current environmental impact report  seemed more like spin than science to her.  She described her own evidence that the watershed in Fenner and Lanfair Valley also migrated easterly, surfacing in various places including Paiute Creek and Klinefelter Spring before it reached the Colorado River.  She asked the board why they would want to risk an interception of the water at the Fenner Gap, water that they would need to pay for, when they are already getting the water that naturally migrates easterly, provides water for wildlife where it surfaces, and gets cleaned in the sandy alluvium along the way before it reaches the river.
In response, Slater rejected the notion that water was migrating any direction except through the Cadiz Valley.
Not discussed during the meeting was an accounting of the loss of 30,000 acre feet per year of subsurface groundwater, not exposed to evaporation – the difference between the watershed recharge factored in the environmental impact report at 32,000 acre feet per year and the 2,000 acre-feet per year said to flow through the Fenner gap to the Cadiz Valley.
Debbie Cook, former Huntington Beach Mayor, objected to the lack of transparency during the process of approving the project.

(August 10)  It now appears that Ray Musser will face three challengers in this year’s mayoral race in Upland.
His challengers include two of his current council colleagues, Gino Filippi and Debbie Stone. Also in the contest is Hal Tanner, a former prison warden who in recent years has been critical of the Upland City Council with regard to adherence to open meeting and disclosure regulations.
Musser was first elected to the city council in 1998. For years he was the sole political opposition on the council to former mayor John Pomierski, who was indicted by a federal grand jury last year and pleaded guilty to bribery early this year. Musser unsuccessfully opposed Pomierski for reelection in 2004 and 2008, but was selected by his council colleagues to succeed Pomierski following his resignation just before his indictment last year.
Filippi, the first of Musser’s opponents to declare his mayor candidacy earlier this year, was first elected to the council in 2010. Stone was elected to complete Musser’s term as councilman in a special election last year after Musser vacated his council position to become mayor.
As of press time Thursday, only Musser had returned his filing papers to qualify his candidacy. The other three had pulled nomination papers, but had not yet returned them. The deadline for doing so is noon today, Friday, August 10.

(August 3)  In an event of historical significance, the Orange County-based Santa Margarita Water District on July 31 certified the environmental impact report for the Cadiz Water project, clearing the way for Los Angeles-based Cadiz, Inc. to extract an average of 50,000 acre-feet of water per year for the next century from the eastern Mojave Desert and send it via pipeline westward to Los Angeles, Orange and Riverside counties.
The controversial plan was given go-ahead over the strident objections of desert residents and landowners, who said they viewed the project as an unprincipled theft of the desert’s water resource by Cadiz, Inc. and the water district, the second largest water district in Orange County serving the affluent communities of Rancho Santa Margarita, Mission Viejo, Coto de Caza, Las Flores, Ladera Ranch and Talega.
There was particular objection to the Santa Margarita Water District’s assumption of lead agency status on the project, officially known as the Cadiz Valley Water Conservation and Recovery Project, despite the considerations that the district lies 217 miles from the Cadiz Valley across the county line from San Bernardino County and the district has an interest in the project in that some 20 percent of the water to be mined by Cadiz, Inc. will be sold to Santa Margarita. A secondary action taken by the water district Tuesday night was to approve a purchase agreement that outlines the financial terms between the district and Cadiz, Inc.
San Bernardino County officials, who belatedly learned that the Orange County-based water district had taken on the role as the lead agency overseeing the project, contemplated but ultimately rejected contesting the water district’s assumption of that authority, instead entering into a memorandum of understanding with Cadiz, Inc. and the Santa Margarita Water District with regard to the undertaking, requiring a ground water mitigation and monitoring program to govern the extraction of the water.
The environmental impact report for the project was performed by the Los Angeles-based firm of ESA.  That environmental review, which describes in some detail the physical aspects of pumping more than 16 billion gallons of groundwater per year from the desert aquifer, essentially said the project would not create havoc on the environment. The environmental impact report (EIR) was paid for by the Santa Margarita Water District, which is now eligible based upon the terms of a prior agreement with Cadiz, Inc., to be reimbursed by Cadiz, Inc. for the environmental impact report expense by having accepted the report as valid. The environmental impact report supported Cadiz, Inc.’s contention that the project would capture water that would be lost to evaporation and that mitigation of any untoward impacts of the project would meet the standards required for such projects under the California Environmental Quality Act.
A number of desert residents and environmentalists questioned that contention, however, taking issue with several particulars in the environmental impact report and project proposal. One area of contention was the assertion that the Cadiz Valley experienced 32,000 acre-feet of water recharge per year. Project opponents cited surveys previously conducted to show that recharge of 5,000 to 12,000 acre feet per year was more accurate. Also contested was Cadiz’s assertion that the project will rely on diverting water that would be lost to evaporation, with opponents questioning how wells sunk several hundred feet below the ground could stem surface evaporation.
On May 25, a salt mining company in the Cadiz Valley, Tetra Technologies, lodged a lawsuit against the county of San Bernardino over the proposed Cadiz Water Project, maintaining the memorandum of understanding the county entered into with the project’s proponents bypasses crucial components of the environmental certification process. That suit, consisting of a petition for a writ of mandate and a complaint for injunctive relief against the county of San Bernardino and its board of supervisors, was filed on behalf of Tetra Technologies by the law firm of Rutan & Tucker. The lawsuit names Cadiz, Inc., the Santa Margarita Water District and the Fenner Valley Mutual Water Company, an entity created and wholly owned by Cadiz, Inc., as real parties in interest.
The Santa Margarita Water District board held a previous public hearing on the sufficiency of the environmental impact report and the water purchase on the evening of July 25. That meeting, which extended into the early morning hours of July 26, took place in the largest meeting room within the Norman P. Murray Community Center in Rancho Santa Margarita, which was filled beyond capacity requiring some in attendance to view the proceedings from an adjacent hallway,   A two-way video and audio hook-up to the Bell Center Community Room at Copper Mountain College, where several dozen desert residents had gathered, was incorporated into the meeting. At the July 25/26  hearing more than 90 individuals put their views on the record and provided the board with voluminous written materials to consider. The board deferred until July 31 making its decision, again conducting hearings that included the video feed to and from Copper Mountain College in Yucca Valley.
At the July 31 hearing, a memorandum from Santa Margarita Water District general manager Dan Ferons was referenced which said that the input received at the July 26 hearing had been reviewed by ESA to determine relevancy to the environmental impact review process and that “none of the comments reviewed by ESA… identify new or more significant impacts, substantially different mitigation measures, or substantially different feasible alternatives and as such, the final environmental impact report does not require recirculation.” The board then heard comments from a number of individuals in attendance at both the Santa Margarita and Yucca Valley location.
Those speaking in opposition to the project referenced ecological damage they believed the project would perpetuate, that the removing of water from the desert to quench the thirst of a community near the coast was not justifiable, that the project should also be subjected to the federal environmental certification process since part of the project would be situated on federal land, that it was unsuitable for the Santa Margarita Water District to be serving as an agency overseeing a project outside its jurisdiction and that the district’s acceptance of the environmental impact report and passage of a contract to purchase water from the project would result in litigation. There was also some comment with regard to the presence of contaminants, notably chromium and arsenic, in the water.
Ruth Musser-Lopez, one of the leaders of a loosely-knit coalition against the Cadiz project, said that the arrangement to have Cadiz, Inc. pay for the district’s cost of having the environmental impact report prepared conditional upon the acceptance of the environmental impact report as adequate was an impropriety bordering on bribery that would be grounds to overturn the acceptance of the EIR. She said the project should have been subjected to the federal National Environment Protection Act approval process.
Rob Bower, an attorney for Rutan and Tucker, said the environmental impact report did not include a reasonable range of alternatives.
Marjorie Mikels, an attorney from Upland, said the project was an illegitimate attempt to change state water law.
Seth Shteir of the National Parks Conservation Association, said the environmental impact report was an inadequate and fundamentally flawed document that that will not ensure the protection of the Mojave National Preserve’s  springs, groundwater resources and air quality.
Jerie Miller, president of the board of directors of Casa Del Sol, asked, “If this is  such a splendid project, why hasn’t the Metropolitan Water District locked this up? How does evaporation impact water that is several hundred feet under the ground?”
Dr. Karen Tracy said, “Do not certify this EIR. This document is composed of fabricated science by people who were paid to dream it up. There is so much circular logic and self-fulfilling nonsense in this document.” She said the project needed to be subjected to the federal environmental process.
Tom O’Key charged that the project was designed simply to fulfill the imperative of “Orange County prosperity and growth.”
LynAnne Felts said acceptance of the environmental impact report “will open all of our desert aquifers for others to use that water hundreds of miles away.”
John Hildner criticized the members of the board for not spending “much time…at the project site.”
Sequoia Smith said Cadiz’s motivation “amounts to filthy lucre. What is the legacy you wish to leave to these children who are becoming savvy to global and ecological issues?”
David Fick said documentation filed in conjunction with the project application indicated Cadiz had intentions of pumping as much as 150,000 acre-feet per year. “Your project is trying to go under the five percent of the water the desert uses to get to 95 percent of the water,” Fick said. “It is against the laws of science. It is against the law of gravity. It is against the laws of California.”
Douglas Buckley said the district should encourage conservation in its jurisdiction and resort to “charging four times as much” for the water it delivers to teach its customers to “conserve like people in the desert do.”
Debbie Cook, a former Huntington Beach mayor, warned the board that a lawsuit against it by the Center for Biological Diversity was forthcoming.
Kevin Hanaway said he believed there was “contamination in this water.”
Robert Siebert called it a “troublesome project” that was going to be very expensive because of the need for electricity to transport the water a great distance. “You have no idea what the cost of electricity is going to be in the future,” he said.
David Renuart said he had concerns about the presence of contaminants in the water and the possibility this would elevate the incidence of childhood cancer among those who consume it.
F.K. “Joe” Holtzman of the Mission Viejo Homeowners Association said “I applaud you for trying to get water. I do not applaud you for where you are getting it from.” He warned that Orange County was essentially declaring war with San Bernardino County by taking its water. “Some of the greatest battles in the West were over water,” he said, reminding the board that to protect their water, the desert’s residents had four remedies, in his words, “The ballot box, the soap box, the jury box” and when those failed, “the cartridge box.” He said the district should seek to utilize “water wise schedules and conservation” instead of resorting to stealing water from the desert.
Those supporting the project cited south Orange County’s current and future growing need for water, and they hailed the environmental impact report as thorough and adequate, the project as an innovative method of fulfilling the district’s charter to ensure water availability in South Orange County and they commended the board for its collective vision and courage in pursuing the project.
Ramon Mendoza  said the Cadiz project provided “a model that is needed for the entire state of California. This project has taken into consideration desaturization. Desaturization increases the range of water that can be taken  by 69 to 90 percent. This is a good project. I have no idea why the people of Yucca Valley and Joshua Tree have any concerns about that project.”
James Thor, a former councilman and mayor of Rancho Santa Margarita, told the board, “South Orange County fully supports this. Certify the EIR tonight.”
Marvin Floyd  said the board should ignore the threats being made to it by opponents of the project. “The job you people are doing is admirable. We support the project and we support the EIR.”
Laer Pearce told the board, “Thank you for your vision. I understand water very well. Reliability is not a given. It takes a lot of hard work.” He said he had the signatures of 220 people who supported the project.
Michelle Ouelette, a contract attorney for the district, said the project was not located on  federal land and therefore did not trigger a requirement that National Environmental Protection Act standards be brought to bear in considering the project.
Board member Betty Olson said she had reviewed the EIR thoroughly and that data collected by EIS this time around which favored the project moving ahead was more reliable than data collected ten years ago that held water extraction from the Cadiz Valley would be harmful to the environment. She said the district had the legal right to sign off on Cadiz, Inc. exporting the water out of the desert region.
“That is an unadjudicated basin and the land owners can move the water,” Olson said. “This EIR is adequate to go forward. If you do not believe this project should go forward than you have the courts and the ballot box.”
Board member Roger Faubel said, “It is a moderate, thoughtful plan.”
Board member Saundra Jacobs, like Olson, said she had thoroughly read the environmental impact report and was convinced  that “in the desert things are in place to protect the environment and habitat and test. California has  a long history of moving water. We now have CEQA (the California Environmental Quality Act) to safeguard the water.” She said the project would  “not be at the detriment of the environment. I know in my heart we will be a good steward of the water. This public private partnership is a unique opportunity. If we do not move ahead with this project, someone else will. We will drink this water.”
Board chairman Bill Lawson, who by profession is a traffic engineer experienced with environmental impact reports, said, “This is one of the most complex and comprehensive EIRs I have ever had to suffer through. I heard the term bad science used. This is not an exact science. It is the best science we have. Where we don’t know what the science is, there is a program to catch those errors.”
Lawson said he had originally questioned “Why is the Santa Margarita Water District the lead agency for a project that is not in this district?”
Nevertheless, at this point, Lawson said, “I am very comfortable with the Santa Margarita Water District being the lead agency as we are continuing to explore alternative sources of water for our district.”
Both the environmental impact report certification and the water purchase agreement passed by unanimous votes.
Scott Slater, the president of Cadiz, Inc., after the vote told the Sentinel, “We continue to be pleased with the leadership and stewardship of the Santa Margarita Water District and are pleased by the outpouring of support for our project. We pledge to work with San Bernardino County to implement this project we can all be proud of.  We will continue to work with the district and I do not expect any interference as we continue to gather baseline data. I am looking forward to engaging the local community in a legacy discussion for the protection of the desert tortoise, the development of a cultural center and the operation of a tourist steam engine on our property to Rice, Arizona.”

(August 3)  RANCHO CUCAMONGA–More than a year after the state legislature moved to shutter redevelopment agencies up and down the state, there is a wide variance  in the response by cities to that takeaway and the effectiveness of those differing strategies. San Bernardino County, with its 24 incorporated municipalities, is a microcosm of California with regard to the adjustments being made to the loss of redevelopment authority. While some of the county’s cities are rolling with the state’s punches and on occasion scoring points with counterblows to Sacramento, others are taking it on the jaw and one has gone  down for the count.
Redevelopment agencies were adjuncts to municipal government intended to transform troubled neighborhoods or districts while rejuvenating the local economy. Redevelopment agencies used a variety of funding mechanisms, including the issuance and sale of municipal bonds, to create infrastructure, promote economic development and eradicate blight. Theoretically, redevelopment bonds would pay for infrastructure improvements that would result in an increase in property values, in turn generating increased property tax. That property tax revenue increase, referred to as increment, would be utilized to pay the bondholders on a yearly basis.
Last year the state legislature, at Governor Jerry Brown’s behest, passed Assembly Bills XI 26 and XI 27, which set an abrupt timetable for the closing out of municipal redevelopment agencies by October 1, 2011. A legal challenge by a coalition of cities delayed the implementation of that close-out until this year. When the law passed, there were thousands of redevelopment agency projects that various cities had begun but had not finished, with millions of dollars left to fund the projects’ completion when the state foreclosed on the money.
The legislation shuttering the redevelopment agencies called for the creation of successors to the cities’ and counties’ redevelopment agencies to oversee the extinguishment of their authority and the discharging of their enforceable  financial obligations.
Provisions of AB X1 26 and AB X1 27 allowed successor agencies to utilize tax proceeds and bond money to complete ongoing projects pursuant to strict regulations and requirements, including having service or construction contracts in place before the laws went into effect. Another provision of the laws was that any lawsuits brought against the state over the agency dissolution or the availability of funding had to be litigated in Sacramento Superior Court.
Some San Bernardino County cities were pro-active in the face of the state’s threat to yank redevelopment authority from them, while others docilely accepted the state’s action and its outcome as inevitable.
Remarkably, one of the county’s smaller and most remote cities, Twentynine Palms, has proved to be the feistiest of the county’s municipal entities in resisting the state.
Even before AB X1 26 and AB X1 27 were passed in 2011, the 25,048-population city hatched a plan to protect its redevelopment funding. As the redevelopment agency-dissolution 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 a downtown revitalization undertaking known as 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. That bond money was made available before the law went into effect but was never expended.
Having made that precautionary move, the city of Twentynine Palms this year has proceeded with an extremely  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, the issuer, the bond underwriter and the bond purchasers, and as such are enforceable obligations. If the city were to hand off the bond proceeds to the state and the state were 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.”
Acknowledging the strategy could entail a protracted “legal fight with the Department of Finance,” Munoz has recommended that if the state of California does not accept the contract for the Project Phoenix expenditures as legitimate, the city and its successor redevelopment agency should proceed with litigation against the state.
Another San Bernardino County city that has not taken the state’s action lying down is Rancho Cucamonga.
Before AB X1 26 and AB X1 27 went into effect, Rancho Cucamonga was in the process of using its redevelopment authority and bonding capability to widen a portion of Foothill Boulevard on the west side of town, to undertake an I-15 interchange improvement project at Base Line Road on which the city has already spent $11 million and to make improvements to the public works yard on the southwest corner of Ninth Street and Hellman Avenue.
Because elements of those projects were not bid out at the time the redevelopment agency was closed down, the state maintained that money previously earmarked for those redevelopment efforts cannot be used to see those projects to completion. The California Department of Finance holds that bond proceeds for contracts made after AB X1 26 and AB X1 27 passed and were signed into law on June 28, 2011  are not “enforceable financial obligations.”
The city of Rancho Cucamonga  appealed the state Department of Finance’s decisions in that regard and began exhausting all other administrative remedies in seeing that the money would be freed up. At the same time, the city solicited bids for the uncompleted work. City emissaries have been dispatched to Sacramento to see if the Department of Finance will entertain the validity of the city’s claims.
City attorney Jim Markman vowed that if the state continued to deny the city access to the money, he would file suit against the state in Sacramento Superior Court to test his interpretation of the law that bond proceeds can be utilized for “ongoing feasible projects.”
That threat of legal action, simultaneous with the passage of new legislation, Assembly Bill 1484, has strengthened Rancho Cucamonga’s position. AB 1484 became law June 27, one day short of a year after AB XI 26 and AB XI 27 were passed,  and allows newly created “development agencies” to seek the return of bond proceeds that were taken away by AB XI 26’s and AB XI 27’s dissolution of  redevelopment agencies. AB 1484 allows remnants of previously available redevelopment money to be allocated to the successor development agencies, pursuant to a strict accounting and auditing regime.
Consequently, the necessity of Rancho Cucamonga’s threatened legal action has passed, at least temporarily. Rather than detailing Markman to Sacramento to file that litigation, the city council this week voted to utilize available money in the city’s capital-improvement fund for the completion of unfinished redevelopment projects with the intention of the city seeking reimbursement from the proceeds of its already issued bonds as soon as they become available.
If the state again seeks to hold up the funding, Markman will switch back into a litigative mode. Meanwhile the city wants to move forward with the projects, most particularly the Baseline/I-15 widening project, by the end of the year because by doing so it will qualify for $8 million in federal funding.
The city of Chino has also refused to back down in the face of the state’s effort to commandeer its redevelopment money.
In April, the city of Chino’s redevelopment successor agency, taking stock of the consideration that the city of Chino had made more than $15 million in loans to its redevelopment agency for improvements in its redevelopment agency project areas, submitted to the state Department of Finance a recognized payment schedule for the first half of 2012 that called for the successor agency to begin retiring the debt on more than $15 million in promissory notes issued by the Chino Redevelopment Agency and held by the city of Chino. In May, the redevelopment successor agency followed up on its April action, and submitted to the state a recognized obligation payment schedule for the second half of 2012 that cited payment on the promissory notes as an outstanding obligation.
The Department of Finance, according to Jeff Oderman, an attorney for the Chino redevelopment successor agency, has rejected the approved list, holding that loans made to the redevelopment agency by the city that founded it are, with the dissolution of the redevelopment agency, invalid debts. According to a number of attorneys, however, the promissory notes from the Chino Redevelopment Agency held by the city of Chino, like many other debts pursuant to loan arrangements involving other cities and  their respective redevelopment agencies, are enforceable under AB X1 26 and AB X1 27. Chino is on the verge of seeking a litigative remedy in Sacramento Superior Court.
On the other end of the spectrum, the cities of San Bernardino and Redlands have fared far less well, seeing money they were highly dependent upon taken away from them, leaving them in financial straits.
San Bernardino officials this week filed for Chapter 9 bankruptcy protection in federal court, an action unprecedented in San Bernardino County history. While the closure of its redevelopment agency by the state was not the only or even a primary cause of San Bernardino’s current financial crisis, the loss of redevelopment funding was a resounding blow. Indeed, a portion city employees were paid by the redevelopment agency and when the state legislature took up consideration of AB XI 26 and AB XI 27, San Bernardino officials began casting about for a way of preserving its redevelopment funding. A stratagem they hit upon was to create a nonprofit called the Economic Development Corporation, which the city hoped could siphon off most, if not all of its redevelopment revenue, convert it into funding for programs that would pass legal muster and apply it in the same fashion that redevelopment money had been traditionally used.
In March 2011, three months before AB XI 26 and AB XI 27 were passed into law, the San Bernardino City Council voted to transfer $525 million from the San Bernardino Economic Development Agency, which the city was closing out, to a newly created nonprofit municipal adjunct agency dubbed the San Bernardino Economic Development Corporation.
In carrying out their bureaucratic sleight-of-hand, the city named Emil Marzullo, who had served in the capacity of the  city’s economic development agency’s director, as the director of the San Bernardino Economic Development Corporation.
Inevitably, however, state officials said “no dice” to San Bernardino’s desperate move. On May 31, the California Department of Finance informed the city that it considered the San Bernardino Economic Development Corporation to be a bogus institution that could not lay claim to any money, let alone the $525 million Marzullo’s operation had tried to take possession of. Marzullo, as executive director of a division without any funding, was recently handed a pink slip.
The city of Redlands likewise is smarting from the financial blow dealt it by the state. On July 26, its redevelopment successor agency borrowed $3.1 million from the city’s water department to cover a bond payment. The city council authorized that “loan,” which potentially might never be paid back.
The Redlands Redevelopment Agency in years past had issued bonds and sold them to investors. Those bondholders yet need to be paid under the terms of the bond sale. Redlands’ successor agency has opened up accounts and was depositing money in them to stay current on the payments to those bondholders. On July 13 the county auditor-treasurer informed the city that all funds in successor agency accounts after June 30, the end of the fiscal year, were considered reserves and would have to be turned over to the state.
The same legislation that Rancho Cucamonga believes will benefit it in its showdown over the eventual control of leftover redevelopment money, Assembly Bill 1484, contains a provision that in Redlands’ case worked to its detriment.  Under AB 1484, Redlands had to make the bond payment by July 16 or face daily fines of $10,000.
Redlands reluctantly, and under protest, made the payment. City officials are trying to see if they can offset that unanticipated loss by selling off property once owned by the city’s redevelopment agency. They are also seeking to see if through future communication with the California Department of Finance they can convince the state that the loan is a dischargeable debt the agency, which is now in the hands of the state, must satisfy. The city has placed the loan on its successor agency’s obligation payment schedule. By forwarding a request to the state through its successor agency oversight board, the city believes the state Department of Finance will recognize the loan as a debt that must be paid by the bond proceeds.
The city arranged for the $3.1 million loan at a .38 percent interest rate over ten years.

(August 3)  In a decision handed down July 17, retired Judge Sam Cianchetti upheld the Upland City Council’s May 2011 termination of former City Manager Rob Quincey.  Quincey sued the city alleging his firing was without cause, and sought $7.8 million in damages.
After arbitration proceedings in June,  Cianchetti found that Quincey intentionally concealed his settlement of a retaliation claim brought by a police sergeant who investigated a July 2008 domestic violence incident involving Quincey and his girlfriend.   The officer’s claim named Quincey, the city and  former city officials.  Quincey did not inform the city council of the claim and used city money to fund the settlement.
In November, Quincey, represented by attorney Joseph Wohrle, filed a wrongful termination claim against the city, maintaining the city council breached the terms of his contract when it fired him in May 2011, four months after he was placed on paid administrative leave, and that mayor Ray Musser and councilman Ken Willis defamed him and maliciously and wrongfully characterized his performance in comments they made to the press at that time.
Wohrle requested that the matter be heard by an arbitrator rather than in open court.
Wohrle and Quincey maintain that Quincey was made into a scapegoat in the aftermath of the political corruption scandal that overtook former Upland Mayor John Pomierski in 2010, resulting in the mayor’s resignation and indictment on bribery and extortion charges in 2011 and his guilty plea in April 2012. Wohrle and Quincey maintained Musser, Willis, former city attorney William Curley, city councilman Gino Filippi and city treasurer Dan Morgan made statements to the press which painted Quincey in a “false light.” In addition to ruining Quincey’s reputation and damaging his future earning potential, the claim purported that the city withheld payments and benefits Quincey was due during the time he was on administrative leave, and at the time of his firing, Quincey claims, the city made unwarranted deductions from benefits he was eligible to receive under his employment contract.
The claim asserted the actual reason Quincey was terminated was because in the latter part of 2010 he had undertaken a critical evaluation of the billing practices of the city’s legal counsel, the law firm of Richards, Watson & Gershon, which employs Curley.
Quincey was chosen by 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, softened by a $200,000 severance package.
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, together with 10 percent of his salary payable in deferred compensation, eligibility for an annual incentive bonus of up to 15 percent each year, a $300-a-month technology allowance and a $950-a-month vehicle allowance plus use of city gasoline, together with $1,000 a month in public employee retirement buy-back.
An analysis of city documents shows that within seven months of his hiring, the first of what would prove to be a series of amendments to Quincey’s contract upping his compensation was made. City records indicate that many of those salary or benefit increases were not ratified by the city council meeting in public as a  body, but rather upon the signature of Pomierski and without an official vote being taken.
In October 2005, Quincey engineered for himself, with Pomierski’s blessing, a 4 percent salary increase to $202,800 that was retroactive to his hiring date.  In January 2006 he received a 4 percent salary increase to $211,728. In April 2006, he was granted a 7 percent increase to $226,836 and  a lump sum incentive bonus of $18,147 on top of that.  On January 1, 2007 he was provided with a 6 percent increase to $240,444.  In 2007, an amendment voted upon by the city council granted Quincey, a resident of Chino, on top of his salary, a $2,000 per month housing allowance to purchase, lease or rent an abode in Upland. In 2008, that housing allowance was boosted to $3,000 per month. In January 2008 Quincey’s salary was upped by 4.5 percent to $251,268 and in April 2008 he was granted another 3.5 percent increase to $260,004 per year. Also in April 2008, all limitations on Quincey’s leave accruals, balances and carry-over from year to year were waived, allowing him to bank his leave time if he did not take it. In January 2009, Quincey’s salary was raised 4.5 percent to $271,700 per year. As of April 1, 2009, Quincey’s contract was amended to have the city purchase an additional year of California Public Employee Retirement System retirement service credit for each year of his employment starting from his hire date, essentially doubling his pension from the city.
When Quincey was put on paid administrative leave in 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.
Cianchetti was provided with testimony from current mayor Ray Musser, councilmen Brendan Brandt and Ken Willis and former councilman Tom Thomas that they were never informed about nor voted to ratify at least four of the eight contract amendments to Quincey’s contract, such that Quincey and Pomierski were acting independently and illegally to grant them. The attorney representing the city, Timothy Owen of the law firm Liebert Cassidy Whitmore, demonstrated Quincey engaged in a prohibited conflict of interest when he and Pomierski pushed through an amendment to his contract guaranteeing him a pay raise equal to that to be provided to the city’s police officers and Quincey then negotiated with the police union himself and granted officers 5 percent raises for three years.
Quincey maintained that enhancements to his contract were legally approved by Pomierski.
The grounds for Quincey’s termination pertained to having exceeded his authority to spend no more than $25,000 without prior city council authorization. That expenditure came about as a consequence of a police report compiled on July 27, 2008 by detective Craig Sipple under the supervision of sergeant John Moore pertaining to a domestic disturbance incident involving Quincey and his former fiancé, Jennifer Stelzer. A heated argument between the couple resulted in alleged vandalism to Stelzer’s vehicle and a series of insulting and profanity-laced text messages from Quincey to Stelzer, which, according to the police report, Stelzer deemed threatening. As Sipple was generating an eight-page report signed off on by Moore 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.  Penultimately, 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 hired attorney Dieter Dammeier 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 before the close of the 2008-09 fiscal year and one after the opening of the 2009-10 fiscal year. Quincey persuaded then-assistant finance director Ruby Carrillo, with whom Quincey was alleged to have been intimately involved, to miscode one of those checks to make it appear that the payment had been made for another police department related matter.  It was Quincey’s expenditure of $50,000 – double his independent spending authority without previous council authority – that was cited as his defiance of the council’s authority.
Judge Cianchetti determined that Quincey violated the city’s ethics rules and broke his employment contract.  Still to be decided is whether Quincey is owed compensation for unused leave and 30 days of wages.