Saturday, April 30, 2011

Why Not Redevelopment Angency

NOTE: When you see yourself in others, you'll see the moral conflict within. Redevelopment Agency's are not good for civic life in a country that is supposed to have property rights, and it is as simple as that.


You may view it at
http://www.redevelopment.us/2011/04/29/national-city-should-remove-eminent-domain-from-its-toolbox/

National City should remove eminent domain from its toolbox

By Jeff Rowes & Dana Berliner

Friday, April 29, 2011 at midnight

If Gov. Jerry Brown needs a poster child for his laudable effort to abolish redevelopment agencies across the state, he’s got one: Mayor Ron Morrison of National City. Last week, in response to a court ruling that National City violated state redevelopment law, the California Public Records Act and the U.S. Constitution, he said: “I know there have been abuses elsewhere, but I would like to see them prove it here.”

That is exactly what we just did. After a five-day trial in March, the Community Youth Athletic Center – a nonprofit boxing gym for at-risk youth – emerged victorious in its property-rights challenge after three and one-half years of scorched-earth litigation in which National City did everything possible to prevent the truth from coming out. In the end, National City’s authority to use eminent domain to potentially acquire any of 692 specified commercial properties was invalidated. The only thing the CYAC did not win was a secondary claim that the judge ruled was simply premature.

The mayor’s statement cannot be written off as clumsy political spin after spending hundreds of thousands of taxpayer dollars to defend his city’s blight designation. His insistence that everything is A-OK with National City redevelopment illustrates how abuse has become business as usual, and how local governments simply cannot imagine life without the power and money that blight designations bring.

For National City, and hundreds of cities across California, being in a declared state of blight is the real goal. National City is only nine square miles and has a population of 58,000. Yet it has been under continuous blight designations since the late 1960s, and Morrison thinks the redevelopment agency still has work to do. If a private company had this kind of track record, everyone would be fired, not praised by the boss after getting destroyed in court for violating people’s rights.

But no one is getting fired because just being blighted is the whole point. A blight designation allows the government to use eminent domain to transfer private property from one owner, who is almost invariably of modest means, to a politically connected developer. Morrison has apparently forgotten that what sparked this lawsuit – and the Institute for Justice’s defense of the Community Youth Athletic Center – was the city’s decision to promise the center’s private property to a luxury condo developer.

Furthermore, as long as a blight designation is in place, redevelopment agencies also have the power to go millions of dollars into debt to finance projects with favored developers. They also can divert millions of dollars in property tax revenue from necessary government services such as police and fire to capital improvement projects.

Being blighted is so critical to National City that, incredibly, the city and its redevelopment agency are still gearing up to extend their redevelopment plans for another 10 years. If successful, they will be able to hold the club of eminent domain over other properties.

National City should take eminent domain off the table. People should not be forced to sell their hard-earned property because the government thinks someone richer can do something better with it. Eminent domain is not necessary for prosperity, but respect for people’s rights is.

If history is any guide, 50 years from now, a future mayor will be explaining why the 100-year war against blight in National City is, alas, still not won. As today, politicians, bureaucrats, consultants, developers, bankers and everyone else who profit from endless blight will no doubt continue to perpetuate the very social and economic problems they purport to be solving.

It is time to break this dysfunctional cycle. Californians should throw their weight behind the governor’s proposal to abolish redevelopment agencies. Until then, the little guys of the world should take heart that not only can you fight City Hall, but also you can knock it out.

Rowes and Berliner are senior attorneys with the Institute for Justice in Arlington, Va., which represents the Community Youth Athletic Center.

Friday, April 29, 2011

Harper: Can't Tripple Dip\Council Opens Solicitation\ Resignation

Note: Harper served Tom Schwab. Under his "service" many of the city's legal problems got by his passive approach to his duties. What ever Schwab did was fine by Harper. Bad contracts, improper practices, and codes that were out of step with the US Constitution just to name a few of the "Things That Got By his Passive Approach" to his duties.

Harper Out As Grand Terrace City Attorney

Friday, April 29, 2011
San Bernardino County Sentinel

After serving two decades as Grand Terrace’s city attorney, John Harper’s tenure with the city will come to a close July 1.

Harper tendered his resignation Thursday, April 28, two days after the city council met in a closed session April 26 to discuss the city attorney’s contract and then directed staff to publish and circulate a request for proposals from interested and qualified attorneys and law firms to take on the assignment of Grand Terrace city attorney. Harper would not have been prohibited from responding to the request for proposals, but the solicitation of bids was widely seen as an indicator that the city council was looking to hire a new legal counsel.

The city council sought those bids just two weeks after it relieved Harper of the roles of redevelopment agency and bond counsel. For the duration of his time with the city, Harper held all three positions – city attorney, agency attorney and bond lawyer, a situation some consider to be a potential conflict of interest since he stood to be and was paid a percentage of the bond proceeds when the city issued bonds to fund the redevelopment agency or other municipal projects. In his capacity as city attorney and redevelopment attorney, Harper was in the position of advising the council on the legal advisability of taking a whole host of actions, including the issuance of bonds. This put him in the position of being able to recommend action or otherwise offer advice that would be of conceivable benefit to him financially.

Harper had competed with several other firms to remain as redevelopment and bond counsel and had tendered the lowest bid. Nevertheless, the city council elected to contract with the firm of Stradling Yocca Carlson & Roth to have it serve as redevelopment agency counsel.
City officials have previously indicated that they believed the rates charged by Harper’s firm, Harper and Burns, were reasonable.

Issues in Harper’s exodus were his close association with former city manager Tom Schwab, who was elevated to city manager in 1989, shortly after Harper was installed as city attorney, as well as his closeness to the assistant city manager who served under Schwab, Steve Berry. Since 2008, four-fifths of the city council’s members have been replaced. Current mayor Walt Stanckiewitz has been a vociferous critic of the management policies Schwab championed. Harper is widely perceived as having enabled Schwab in his approach to governance in Grand Terrace.

With the writing on the wall, Harper chose to make his exodus voluntarily. His leaving will come at the close of the current fiscal year.

An issue that had troubled city officials in recent weeks was staff’s inability to locate a copy of the city’s contract with Harper, specifying the terms of his services.

Efforts to reach Harper for comment prior to press time were unsuccessful.

Grand Terrace city attorney resigns

By Ryan Hagen Staff Writer
Posted: 04/28/2011 06:44:24 PM PDT

GRAND TERRACE - City Attorney John Harper, who has provided legal advice for the city since it incorporated and served as city attorney since 1988, resigned Thursday.

The resignation takes effect July 1.

The announcement follows two City Council votes that affected Harper's role, culminating with a decision Tuesday night to ask for proposals from other firms interested in offering a new city attorney.

"I've been here for a long time, and I love Grand Terrace and the residents," Harper said.

The City Council voted April 12 to select a new firm - Straddling, Yocca, Carlson & Rauth - to serve as bond counsel. Harper had performed that job, which includes advising the city's redevelopment agency about whether to issue bonds, while serving as counsel to the redevelopment agency and city attorney.

That switch inspired a broader search, said Councilman Bernardo Sandoval.

In his resignation letter, Harper offered to continue serving at his current rate of $145 per hour or a retainer of $5,000 per month until a replacement is found, but he thought it was in the city's best interests for him to leave.

"The purpose of this resignation is to avoid having the selection of the city attorney become an issue which will detract from the progress of a city which I love very much in meeting its current challenges," he wrote.

In the last few years, a series of irregularities have come to light in Grand Terrace.

But Harper, who is a partner at Harper & Burns and also serves as city attorney in Norco, said those issues were not his responsibility.

"The city attorney, particularly in a city like Grand Terrace, is more of a reactive position. When the issues are raised or questions are asked, the city attorney answers," he said.

Harper's career in Grand Terrace began as assistant city attorney in 1978, the year the city incorporated.

As many long-time city staff and elected officials left in the last two years, management philosophies have evolved, and it makes sense to find a new city attorney, said Mayor Walt Stanckiewitz.

"(Harper) has done a lot of good things for Grand Terrace, but a lot has changed," Stanckiewitz said. "The way we deal with things has changed, and I'm looking forward to going through the process and seeing what type of firm we can identify."

The city plans to send out a request for proposals May 10, said City Manager Betsy Adams.

ryan.hagen@inlandnewspapers.com, 909-386-3916

FREEDOM OF SPEECH IN GT?

NOTE: The 30 limit on campaign signs aids those with name recognition or sitting Council Members. The courts have decided this issue, GT should comply with the US Constitution FIRST. The PROTECTION OF FREEDOM OF SPEECH is YOUR BUSINESS.

GRAND TERRACE: Council to ponder change in campaign sign law


10:00 PM PDT on Thursday, April 28, 2011
By DARRELL R. SANTSCHI
The Press-Enterprise

The Grand Terrace City Council will consider lifting restrictions on the posting of campaign signs.

The council voted this week to hold a public hearing on changes recommended by the city attorney, who contends that limits on the length of time signs are posted, their height and requiring a city permit to put them up violate First Amendment constitutional rights.

Community and Economic Development Director Joyce Powers said she expects the hearing to be held May 24.

A change in the city's political sign regulations would repeal provisions enacted in 1990.

Those provisions forbid candidates from posting signs earlier than 30 days before an election, limit their overall height to 6 feet above grade and require candidates to obtain a city permit that includes a map showing the location of the sign.

A $50 permit fee required by the ordinance "would restrict persons that were not able to pay the fee," Powers wrote in a report to the council.

The report, presented to the council Tuesday, said that court rulings since the ordinance was passed suggest that Grand Terrace's ordinance could be successfully challenged in court.

Powers said by phone after the meeting that a candidate had complained that the ordinance was unconstitutional, prompting the Planning Commission to hold a hearing last June to review the ordinance.

Commissioners were concerned that signs posted too soon before an election would be a visible blight on the community, but recommended the changes at the urging of a representative from the city attorney's office.

If the changes are enacted, Powers said, candidates would still have to comply with an ordinance governing the size of signs and when they must be taken down.

Reach Darrell R. Santschi at 951-368-9484 or dsantschi@PE.com

Saturday, April 23, 2011

Sound's Close to GT's Situation: Thanks to Schwab

Grand Terrace is trying to discover, disclose and correct all of the Schwabastic Accounting and deal with pending budget cuts, and we are yet to face a full state audit. Betsy Adams the new City Manager, and the New Members of the City Council have their plates full that is for sure.

Montebello's story sounds a lot like Grand Terrace's. EXCEPT our former City Manager, Tom Schwab had no intention to pay the Redevelopment Agency back for the "loans" he transferred Schwab's accounting for the CRA/HUD house he got the city to procure for him was not correctly recorded until recently. Perhaps this too was a Debt he thought the City would never pay the CRA back. Thus an accounting trick to make the City's books look better than they were/are. Perhaps the State Auditor can look into the Schwab Era to check our books and check for Crimes against the City and State at the same time.


latimes.com/news/local/la-me-montebello-20110423,0,7275581.story

latimes.com

Montebello may face insolvency if it doesn't close budget deficit

City officials have consulted with bankruptcy attorneys to consider possible options, according to a memo by the departing city manager that was obtained by the Los Angeles Times.

By Jessica Garrison and Hector Becerra, Los Angeles Times

April 23, 2011


Montebello faces possible insolvency in the coming months if it cannot close a gaping budget deficit and has consulted with bankruptcy attorneys to weigh available options, according to a memo obtained by The Times.

The memo, written last week to the City Council by Montebello's departing city manager, also said the city could face the potential of "bond default or other difficulties" if it does not repay the $17 million it borrowed from its redevelopment agency by June 30.

Additionally, the city is struggling with cash flow. If it cannot get a loan by September, "the functions of local government [could] shut down," according to the memo Peter Cosentini sent to the council.

The latest fiscal blow comes as Montebello is grappling with the announcement that state Controller John Chiang will perform a rare outside audit of the city's finances amid evidence that the city has produced false or inaccurate financial reports dating back several years.

Montebello has been the subject of several outside probes, including investigations by the Los Angeles County district attorney's office into what happened with two "off-the-books" city bank accounts that more than $1 million moved through in the last 12 years.

Next week, council members will vote on whether to issue subpoenas to a bank to get more information on what happened to nearly $1 million in one of the suspect accounts that officials said went to a local restaurant developer, Hank Attina.

The city agreed to give Attina a $1-million loan, but, according to the council agenda, officials now are questioning whether he was paid $2 million instead, with some of the funds moving through the off-the-books account.

"We don't know if it's the same money or if it's double," said the city's police chief, Kevin McClure, who recently was appointed as the city's spokesman.

In a phone interview Friday afternoon, Attina said he only got the amount — just over $1 million — approved by the council, and not $2 million. He criticized Cosentini, saying that he was engaging in a "fishing expedition."

"He's going to find out we did not receive this money, and it really damages people's reputations when you make reckless accusations like this," Attina said. "Once everything comes out, it'll show we only received what the city allocated for us to receive."

Montebello has reached the fiscal brink after years of infighting and destabilizing recall elections. The city also has a history of questionable accounting practices, according to the controller's office and local officials.

On Friday, city officials could not even agree on the size of the city's deficit or on how much money the city's general fund owes to its redevelopment agency.

Montebello took the unusual — and some say potentially illegal — step of borrowing money from its redevelopment agency last year to keep the city afloat.

In his memo, Cosentini said the loan was for $17.3 million. Councilman Bill Molinari said he thought it was $14 million. Councilwoman Christina Cortez put the total at closer to $19 million.

"We can't even agree on the numbers in front of us," Cortez said. "How can we move forward?"

Whatever the figure, McClure said the city will be forced to make major layoffs and cuts in services if it cannot get a loan to cover the debt.

He said the city has many new leaders, including most of the council members, and that they are trying to solve problems left by previous officials.

"There's stuff being uncovered," McClure said. "These aren't the problem-makers. They're the problem-uncoverers."

The state controller has accused Montebello of dragging its feet in turning in financial reports. McClure said one of the reasons was that incoming Montebello officials had no confidence in the city's past financial record-keeping and did not want to turn in wrong information.

"The way they moved money was not up to today's standards," McClure said.

The Montebello police chief said he is in contact with L.A. County prosecutors in case any allegations of criminal wrongdoing come up.

Councilman Molinari added that Montebello's financial situation was "critical," but not because of any "sinister plot." He said the struggling economy and other past decisions that were wrongheaded but not necessarily illegal played a role. He said the council has voted to hire an independent forensic auditor.

"If there are problems, we want to know what they are, and we're taking steps every day to correct them," Molinari said. "We've been self-policing ourselves."

jessica.garrison@latimes.com

hector.becerra@latimes.com

Friday, April 22, 2011

Arrests and Crime Re: Grand Terrace

http://www.localcrimenews.com/lookup.php?jid=5882731 The data is from localcrimesnews..

Grillo, Christopher (M/W) of Grand Terrace
Reported On: 04/18/11 in San Bernardino County
For: Dangerous Drugs

22316 Lark St
Reported On: 04/10/11 in San Bernardino County
For: Driving Under the Influence

11852 Mountain Vernon Ave
Reported On: 04/09/11 in San Bernardino County
For: Burglary, Felony Theft, Other Felonies

Ramirez, Henry (M/H) of Grand Terrace
Reported On: 04/17/11 in San Bernardino County
For: Selected Traffic Violations

Cintron, Carlos (M/O) of Grand Terrace
Reported On: 04/14/11 in San Bernardino County
For: Felony Theft

Orozco, Richard (M/H) of Grand Terrace
Reported On: 04/13/11 in Los Angeles County
For: Drunk

Daily, Christopher (M/B) of Grand Terrace
Reported On: 04/13/11 in San Bernardino County
For: Driving Under the Influence

11750 Mt Vernon Ave Apt C106
Reported On: 04/10/11 in San Bernardino County
For: Driving Under the Influence

12056 Mount Vernon Ave
Reported On: 04/07/11 in San Bernardino County
For: Tresspassing

11981 La Crosse Ave
Reported On: 04/07/11 in San Bernardino County
For: Dangerous Drugs

22111 Newport
Reported On: 04/07/11 in San Bernardino County
For: Assault and Battery

22111 Newport
Reported On: 04/07/11 in San Bernardino County
For: Other Felonies

12312 Pascal Ave
Reported On: 04/06/11 in San Bernardino County
For: Dangerous Drugs

22558 Robin Way
Reported On: 03/31/11 in San Bernardino County
For: Robbery

11852 Mountain Vernon
Reported On: 04/02/11 in San Bernardino County
For: Driving Under the Influence

22491 De Berry St #K130
Reported On: 04/01/11 in San Bernardino County
For: Assault and Battery

12710 Royal Ave
Reported On: 04/04/11 in San Bernardino County
For: Dangerous Drugs

12761 Reed Ave
Reported On: 04/04/11 in San Bernardino County
For: Burglary

11831 Arliss Ct
Reported On: 04/01/11 in San Bernardino County
For: Misdemeanor Offenses

22491 De Berry St No K130
Reported On: 04/01/11 in San Bernardino County
For: Other Felonies

22438 De Soto St
Reported On: 03/31/11 in San Bernardino County
For: Assault

22558 Robin Way
Reported On: 03/31/11 in San Bernardino County
For: Kidnapping

22415 Tanager St
Reported On: 03/30/11 in San Bernardino County
For: Other Drugs

22584 Thrush St
Reported On: 03/28/11 in San Bernardino County
For: Driving Under the Influence

12542 Warbler Ave
Reported On: 03/26/11 in San Bernardino County
For: Assault and Battery

12542 Warbler Ave
Reported On: 03/21/11 in San Bernardino County
For: Drunk

12168 Mount Vernon Ave Apt 38
Reported On: 03/20/11 in Los Angeles County
For: Driving Under the Influence

Friday, April 15, 2011

GT Still Recovering From Schwabastic Management

The Next Question Is: What Advise, Counsel, and recommendations regarding Debt Financing were made in consultations between Tom Schwab and John Harper behind closed doors in private meetings. Then the Schwab or "Staff Recommendations" were rubber stamped by the City Council. Effectively, consulting with Schwab was consulting or giving advise to the City Council. There was a conflict. Investigation by a Grand Jury should be done in those consultations and transactions, including the transaction that resulted in Tom Schwab being the recipient of a RDA Low and Moderate Income House, paid for by the City, for which he later paid for and refinanced paying the city and only until recently was the RDA paid for the house. Was it Schwab's intention that the city keep his money and never pay back the RDA for the house he was not qualified to live in? Clearly the advise and council that Harper had been giving the City of Grand Terrace has not been in the Cities Interest, but in Tom Schwab's, and perhaps his own.

JOHN HARPER was Hired by Tom Schwab via the Discretion of his selection as the Manager and approved by City Council when they were presented a service contract and "Staff (Schwab) Recommendation". There was no competitive bid, nor were others considered by the City Council. It was common practice under Schwab Management to not have competitive bids for contracts for professional services and service/supplier contracts. Contractors knew they worked for Schwab, not the City Council or the Citizens of Grand Terrace or the City of Grand Terrace. JOHN HARPER is only the most visible of these contractors which were issued by Schwab's Personal Selection Process.

Former Council Member Jim Miller's first error in getting along with Schwab and then Berry, was to question in PUBLIC at a City Council Meeting, the contracting and bid process for Air Conditioning Repair or Replacement at City Hall. A sound management practice, yet it peeved Tom Schwab. From that point on Miller was targeted, entangled and then trapped. Steve Berry and Bea Cortez may have been the people who pulled the trap door's leaver, but it was Tom Schwab that set the trap, along with the lack of precautionary advise from none other than John Harper along the way. Harper should not sell bonds or be our City Attorney. If there is a replacement Attorney available one should be hired and the Harper contract ended.

John Harper presently serves as the City Attorney for Norco, Grand Terrace and General Counsel to the Trona Unified School District and the Rubidoux Community Services District.Alan Robert Burns is the City Attorney of the City of Fountain Valley and general counsel to the Costa Mesa Sanitary District, the Orange County Vector Control District, and the Home Gardens Sanitary District.



Grand Terrace Relieves City Attorney As Bond Counsel
Friday, April 15, 2011 San Bernardino County Sentinel

The city of Grand Terrace this week ended its controversial practice of employing its city attorney as bond council.

Since he was hired as Grand Terrace’s city attorney in the early 1990s, John Harper has served in the additional capacities of redevelopment agency attorney as well as bond counsel on those occasions when the city issues bonds to undertake financing of municipal projects.

Redevelopment agencies exist as adjuncts to municipal governments and are intended to serve as a means of reducing blight and promoting economic development. Traditionally and by the rule of law, redevelopment agencies create redevelopment project areas that are generally limited to portions of the city that have fallen into a state of general disrepair, dilapidation or blight. Under state law, redevelopment agencies have the authority to utilize a host of financing mechanisms to carry out their programs. One of those mechanisms is to issue, i.e., sell, bonds. The proceeds of those bonds are then used to undertake projects to reclaim blighted land and transform it into developable property. The increase in the value of that property results in increased property tax revenue, which is then committed to repaying the bond buyer at a set percentage of the value of the bonds – typically in the five to eight percent range – over a predetermined period – typically 25 to 35 years. In some cases, where the property has been redeveloped into commercial projects, a portion of the sales tax generated at the businesses therein will be utilized to make payments to the bond holders.

As city attorney and as redevelopment attorney, part of Harper’s function has been to advise the city council on the advisability and legality of certain redevelopment strategies and projects. Nearly all California cities have redevelopment agencies. Grand Terrace, is, if not unique, very rare among California municipalities, in that under former city manager Tom Schwab’s leadership and in conjunction with Harper’s legal guidance, the redevelopment agency has been extended to cover not just those portions of town that meet the legal definition or even common definition of blight, but the entirety of the city. Despite Schwab’s exodus as city manager in 2008, the Grand Terrace Redvelopment Agency’s project area’s boundaries remain coterminus with the Grand Terrace city limits.

A bond counsel is an attorney or law firm hired to provide a legal opinion that the issuer is authorized to issue the bonds in question and that the city/redevelopment agency has met all legal requirements necessary for issuance of and paying the interest on the proposed securities. Bond counsels are typically paid a percentage of the bonds issued – usually between one quarter percent to one half percent of the entire bond issuance. In this way, a bond counsel would receive a fee of $25,000 to $50,000 on a bond sale of $10 million.

In the case of Grand Terrace, Harper for nearly two decades has served as bond counsel, in addition to his roles as city attorney and redevelopment attorney. The majority of Grand Terrace residents have been entirely oblivious to this arrangement. Indeed, over the years, many of its city council members have failed to fully understand the situation or comprehend its implication, but instead relied upon Schwab’s assurance that it represented no problem or potential complication for the city.

But many people familiar with municipal governance and its principles believe circumstances such as that involving Harper represent an inherent conflict of interest that redounds to the detriment of taxpayers. Indeed, the practice of having a city attorney serve as the same city’s general redevelopment attorney to advise the city council on potential bond issues and then be paid again as the city’s bond counsel, getting a percentage of the value of bonds he or she has helped prepare for sale was somewhat more common historically than it is now. But over the last 20 to 25 years, most, if not all, California cities have moved away from having an individual lawyer, or even different lawyers from the same law firm, handle the overlapping duties of city attorney, redevelopment attorney and bond counsel.

Critics of common municipal practices, reformists and some lawyers maintain that city attorneys should not be able to participate in the formation of bond issues for either the city they work for or its redevelopment agency and then receive additional pay or fees to serve as bond counsel for the same issues, on the grounds that the advice the lawyer will provide in the first role creates income for him or her in the second role.

In some cases where a city attorney has persisted in functioning in the multiple roles, legal challenges have been launched. Legal rulings as to the legality of the arrangements have been mixed, with some judges finding that such dual roles represent a conflict under the state’s conflict-of-interest statutes. There have been other findings to the effect that the practice, while inadvisable, is not technically illegal. In practically all cases where the practice has been challenged, it has been discontinued.

With a population of less than 13,000 and a land area of just over 3.5 square miles, Grand Terrace is the second smallest of the county’s 24 incorporated municipalites population wise and the smallest land-wise. For the three decades after its 1978 incorporation, Grand Terrace remained out of the limelight, avoiding the controversy and acrimony that dogged many of San Bernardino County’s other municipalities. In that time, Grand Terrace had been administered by just two city managers, Seth Armstead, who served from the city’s inception until 1989 and Schwab, who was hired as finance director in 1984 and succeeded Armstead five years later. For nineteen years, Schwab had been accepted as something of a benevolent dictator in Grand Terrace. While in most cities city managers run operations on a day to day basis but are nevertheless deemed to be answerable to the council, in Grand Terrace an important part of that dynamic was reversed and it was the council that took its direction from Schwab, who regularly previewed the city council meeting agenda with each of the council members and choreographed ahead of time the often unanimous votes in favor of the policies and management strategies he had devised.

Schwab’s management of the city included his deft, but often unconventional, adaptation of the regulations applied to municipal governance in order for the city to make up for a major disadvantage that consisted of its meager population and relative dearth of commercial development, which left the city deprived of what for most cities is a major revenue source - sales tax.

In making his adaptation, Schwab made creative use of the city’s redevelopment authority. That strategy included using redevelopment money not to eliminate blight or build infrastructure to make way for economic development but rather as a source of revenue. With the concurrence of Harper and the approval of the city council, Schwab routinely borrowed money from the redevelopment agency and put it into the city’s general fund to pay for operations.

In 2008, Schwab was felled by a subdural hematoma and a stroke, a medical condition so serious he was put on leave and replaced by his understudy, then-assistant city manager Steve Berry.

Berry’s short-lived tenure as acting city manager proved disastrous, brought on by the intensification in scrutiny his promotion prompted, which led to revelations about his having moonlighted as a development consultant in neighboring Loma Linda while he was assistant city manager, followed by the surfacing of a sheriff’s department report documenting an embezzlement he had involved himself in shortly after Schwab hired him as his assistant. An effort to bring Schwab, whose health appeared to be returning, back as city manager took place in the spring of 2009.

Berry attempted to short circuit that, using his position to dredge up and leak documents pertaining to Schwab’s management policies. Ultimately, Schwab retired for keeps in June 2009, but one month later the city council fired Berry. He was ultimately replaced by Betsy Adams, who had been an assistant city manager in Moreno Valley.

Questions about the fashion in which Schwab ran the redevelopment agency which surfaced during Berry’s tenure as interim manager intensifed during the first several months of Adams’ tour of duty as city manager. In response to questions about the policies perpetrated under his watch, Schwab sought to explain their rationale. Noting that the city was strapped for revenue because of its relative lack of size and sales tax-generating commercial development, Schwab explained that he utilized the redevelopment agency to provide the wherewithal to finance normal operations through borrowing that would eventually be forgiven.

“My intention was to borrow it and never pay it back,” Schwab said of the money taken out of the redevelopment agency. “When the redevelopment agency expired, the debt would expire with it.” Schwab said the redevelopment agency was chartered for a set number of years and then would fade into oblivion. The city would then have the option of chartering a new redevelopment agency or going on without one. With the closing out of the existing agency, any money owed to it would become a moot issue, Schwab reasoned.

Schwab insisted that he had explained to the city council the strategy he was using in borrowing from the redevelopment agency to shore up the city’s general fund.

“They were told about it,” Schwab said. “Whether they understood it is another question.”

That created a firestorm of controversy, leading to a questioning of the manner in which Schwab, in the words of one critic “was robbing Peter to pay Paul.” Included in that criticism was Harper’s acquiescence in Schwab’s approach to governance. After Berry’s departure, finance director Bernie Simon served a short stint as interim city manager until Betsy Adams was hired as city manager.

In assessing the practice of utilizing the city attorney as bond counsel that was in place when she arrived in Grand Terrace, Adams said she could not say with certainty whether past members of the counsel fully understood the implication and significance of the arrangement involved in Harper’s triple role as city attorney, redevelopment attorney and bond counsel.

“I’m not sure clearly what level of information they would have received about a conflict of interest prior to my getting here,” she said. “I’m not sure what they were or were not advised of in the past.”

Just after the election last November, she said she was not sure if the present council at that time fully grasped how Harper’s triple role might be compromising the quality of advice the council was receiving with regard to bond financing and possible bond issuances. “There may be a general awareness of the roles of the city attorney, but since the city has not issued bonds for a few years. I am not sure how nuanced their understanding is on that subject. I assume Mr. Harper's role was explaiined to them, but as to whether they understand that detail or not, I am not 100 percent certain".

Adams indicated she considered it "incumbent on me" to inform the council that Harper stands to make money on top of his normal legal fees if the bonds are issued and he is serving as bond counsel.

There has been considerable turnover on the council from the time the city last issued bonds.

Gone is former mayor Maryetta Ferre, former councilwoman Bea Cortes and former councilman Jim Miller. Ferré has been replaced as mayor by Walt Stanckiewitz, who was first elected to the council in 2008. Cortes was replaced by Bernardo Sandoval. Darcy McNaboe replaced Miller. And Gene Hays was chosen to replace Stanckiewitz as councilman when he was elevated to mayor.

This week, based on a recommendation by Grand Terrace Community and Economic Development Director Joyce Powers that was backed by Adams, the council ended the redevelopment agency’s contract with Harper as bond counsel and hired the firm of Stradling, Yocca, Carlson & Roth to serve as “special counsel for redevelopment agency financing.”

Prior to making the change, according to Powers, the city put out a request for bids from, in Powers words, “legal firms that specialize in agency financing. The intent was to identify the most qualified firm able to forecast potential obstacles and outcomes to ensure an expedited process, preferably with experience in both bond issuance and private debt placement.”

Five responses were received. Those were Murphy and Associates of Sacramento; Jones Hall of San Francisco; Stradling Yocca Carlson & Roth of Newport Beach; Best Best & Krieger of Riverside; and Harper’s firm, Harper & Burns of Orange.

Reportedly, Harper’s firm was the low bidder for the contract.

“We were not bound to take the low bid,” mayor Stanckiewitz said. “We felt it was in the best interest of the city to go with a firm that had no conflict with regard to any other services rendered for the city.”

In her report to the council, Powers wrote, “Staff has reviewed the information provided and listed references. All of the responding firms have experience with agency bonding. Based on a management team analysis, staff recommends Stradling Yocca Carlson & Roth (SYCR), a firm with experience in private placement financing. In addition, SYCR is in the top ten ranked legal firms in the United States for these services. The quantity of financing transactions indicates extensive successful service.”

Harper previously told the Sentinel he saw no conflict in an arrangement whereby a city attorney fills the roles of redevelopment attorney and bond counsel in the same jurisdiction simultaneously. He said that practice is not unheard of and involves many reputable lawyers and law firms. “They’re just all providing legal services,” Harper said. “I don’t know of a city attorney who doesn’t serve as redevelopment agency council if he has that line of expertise. There is no conflict. The two agencies [municipal and redevelopment] are headed by the same board. The city council is the redevelopment agency board.”

Harper referenced numerous other cities where one individual or one law firm serves in all three capacities. “Look at Temecula, Lake Elsinore, Murrietta, Colton,” he said. “They all use the same firm or the same attorney in those ways. Cities make use of their lawyer if they have the expertise to be bond counsel. Not every lawyer can be bond counsel. You have to have a nationally recognized bond counsel. It is not something a lawyer can just decide to do.”

With regard to the practice of a city attorney participating as an advisor in the formation of bond issues for the city or redevelopment agency and then receiving a percentage of the bond issuance while serving in the role of bond counsel, Harper said, “I think that is inappropriate.”

He insisted, however, that he had not profited in that way in his capacity as Grand Terrace’s bond counsel.

“I don’t make recommendations to the city council on whether to make financings,” he said. “They have outside consultants who assist them in doing that.



Wednesday, April 13, 2011

Contact California Elected Officials... Tell them Kill RDA's

Conference Impresses; Redevelopment Abuse Featured

FIRST PERSON
Ziggy Kruse

On Saturday
, the Municipal Officials for Redevelopment Reform (M.O.R.R.) and Californians United for Redevelopment Education (CURE) held their 16th annual conference in Southern California regarding redevelopment abuse and the abuse of Eminent Domain that comes with it. The conference always focuses on issues that relate to those who have been through the Government abuse of eminent domain, but this time around it also focused on an additional issue: Governor Brown’s proposal to abolish redevelopment agencies statewide and how we all can help achieve this goal.

Several guest speakers took a stand behind the podium at the Elks Lodge in Glendale, where this year’s event was hosted. Though the Elks Lodge was not the original location for the conference, it was the targeted luncheon spot for those attending it.

However, it became the main hall for the event after the organizers had to “re-strategize” the meeting location. They had a deal with “then” owner Ray Patel to host the event at the Golden Key Hotel on Colorado Blvd., but due to some “legalities” with the newly announced owner (Rick Caruso) the group decided to move the event to the Lodge.

While planning the event The Golden Key Hotel was considered the perfect location for it, especially since the threat of eminent domain was being used against Patel. Remember? Big time developer Caruso had the city of Glendale wrapped around his finger and got them to issue just the simple “threat” of eminent domain, which ultimately forced Patel to sell his property to Caruso.

“Rumors” have it that Caruso had to shell out $16 Million large ones in order to obtain the desired property next to the Americana @ Brand. Now Caruso is “kind enough” to let Ray stay until December 31, 2011.

With that said some believe that the case of Caruso vs. Patel (or David vs Goliath) in Glendale is yet another poster child of why the RDA’s have to be abolished. Nobody should ever have to be forced to negotiate “with a gun to the head”, but that’s exactly what those agencies and their eminent domain powers do. “Give me your property or else …” – A simple threat like that can turn ones life upside down.

In the end Ray Patel spoke as the “guest speaker” during the luncheon program, sharing his ordeal with the attendees. He also answered questions about taxes, about him paving the way for Caruso to crush other properties around the Golden Key and if he was to continue to help fight the good fight and support those who are still going through the eminent domain process. Most of his answers were well thought through, precise and short. The particularly short one was in regard to the supporting others, which Patel answered with a simple “Yes, of course”.

Many came for Saturday’s conference, some as near as Glendale itself and as one far away as Florida, yes, that’s right: Florida, just to participate in the talks of how to help Governor Brown achieve his plan to abolish these vicious agencies and to share experiences and educate one another on how to come out atop.

Cherie Coccia traveled all the way from New Smyrna, FL (near Daytona Beach, FL) to share her experience with the RDA in Florida only because she had found the website that gave her hope that there are others in the USA who are facing the same problems as her community. Visit: www.redevelopment.com and www.redevelopment.us.

As it turns out her county is being put through the ringer of the RDA, and nobody even knew what RDA stands for. – Kind of shows how little the government teaches regular people about the “unknown” government, doesn’t it?

Other speakers on the agenda included a former Mayor of the city Carson, as well as people from the San Fernando Valley, Pasadena, Arcadia, Sacramento, South Gate, Temecula, Murrieta, Riverside, Rubidoux, Grand Terrace, Desert Hot Springs, Mission Viejo, Fresno, Fullerton, Hollywood, Los Angeles and Daytona Beach (FL).

Though Los Angeles Council Member Jose Huizar was also listed as a speaker, he was a No-Show. One has to wonder if that had something to do with the fact that two of his constituents from Boyle Heights were at the conference and were able to share their experience with the CRA/LA Land Grab and the unresponsive office of CD 14? I guess we will never know.

Free legal advice was also available through the attorneys, who attended. – Both attorneys-at-law talked about the negative impact RDA’s have on communities and how important it is to “get rid of them”. They stayed way after the conference was over to address concerns and questions, which is something one does not see all that often, especially since their advice came free of charge.

One could think that experiencing the abused power of eminent domain is the only thing that connects these people with each other at these conferences, but one would be wrong. – The real connection behind it is Assembly Member Chris Norby (R) of the 72nd district. He’s been hosting the conferences all these years and he is been the most outspoken leader in Sacramento when it comes to abolishing the RDA’s.
Norby knows that taking someone’s private property under the threat of eminent domain is wrong and then giving it to someone else for private gain is even worse and all of that that has to be stopped now.

There are currently two bills on the floors. There is one for the State Senate, which SB 77 [link] and another one for State Assembly, which is AB 101. [link] Please take a look and tell your officials that you are supporting these bills and that they need to put the vote in to support them, too.

The best way to stop the abuse that redevelopment brings with it is by abolishing the redevelopment agencies statewide. The best way to do just that is by calling / faxing ANY State Representatives (Assembly & Senate) who has not signed on to support the Governor!

To find out who your representatives are, please follow these links and enter your zip code or address: Assembly. Senate.

As a last word I would like to add that I sincerely hope that this was the last of this type of conference and that the next time we can gather in celebrating the fact that the RDA’s are gone and gone for good.

In that spirit please pick up your phones and call your officials or type up a letter and then fax it to them. Either way will be just fine, as long as you make your voice being heard.


(Ziggy Kruse is an activist and reporter for www.HNN-TV.com . She is also a former Board Member of the Hollywood Studio District Neighborhood Council. Ziggy can be reached at ziggykruse@gmail.com) –cw






CityWatch
Vol 9 Issue 29
Pub: Apr 12, 2011

Sunday, April 10, 2011

CRA BID OPEN: West Side Park-Design, Eng & Construction Services

The city has issued a request for proposal and quote for Management Services in regards to the building of the West Side Park. What is interesting here is the city is asking for a quote, for services which although are approved by the Park Development Agency of the State have not been funded by any Budgeting by the State. Let's recall there is a Budget Problem in California, an agency's approval does not make a Budget Line Item or funds available for spending. What is happening is the RDA is trying to spend more and more money, to justify more being "Earned" by the City, so that more can be sucked out of Schools, and other State Needs. Our RDA can contract for Management and Design Fees or a contract prior to the State actually making the funds available. Or we could see the RDA spending the money, and the city getting their share (25Percent) and no park built. This RFQ should not be funded until there is a commitment and transfer of funds from the State. Prefunding or setting aside RDA Funds is an abuse of the taxpayer.
.................................... READ RFQ BELOW.........................................
The Community Redevelopment Agency of the City of Grand Terrace is seeking an experienced, responsible, capable and professional firm with proven experience in Project Design, Engineering and Construction Management Services.http://www.cityofgrandterrace.org/DocumentView.aspx?DID=791 Publication Date/Time: 4/7/2011 12:00 AM Closing Date/Time: 4/28/2011 4:30 PM Contact Person: Katie Chamberlain22795 Barton RoadGrand Terrace, CA 92313 909 430-2256 Download Available: yes

Few More Votes Needed to Kill RDA's Drain on Funds

The Calm Before the Storm Summary:Despite daily rumors to the contrary, neither chamber took up the issue of redevelopment last week. Both the Senate and Assembly held brief floor sessions Friday morning without voting on either SB 77 or AB 101, the bills eliminating redevelopment....View the full post by clicking this link:http://www.californiaeminentdomainreport.com/2011/03/articles/redevelopment-1/the-calm-before-the-storm/ Redevelopment Folly 10:00 PM PDT on Wednesday, April 6, 2011 The Press-Enterprise The latest proposal to stave off the end of redevelopment in California offers taxpayers only minor changes in return for ridiculous concessions. Legislators should flatly reject a plan that retains redevelopment's flaws while ignoring the central public policy issues at stake. Gov. Jerry Brown proposes to end redevelopment in California, as part of a plan to close a $26.6 billion budget shortfall through next fiscal year. The California Redevelopment Association and the League of California Cities are now floating a "compromise" plan that would provide the state some additional funds, but would let redevelopment continue. Redevelopment allows local governments to keep a larger share of property taxes that would otherwise go to schools, counties and other public agencies. The money is supposed to help improve run-down areas, but local governments have often spent the money in ways that that have little to do with any urban renewal. Redevelopment now consumes more than $5.5 billion a year in property taxes, at a time when state and local governments struggle to fund basic public services. Under the latest scheme, redevelopment agencies would provide "voluntary" contributions to help pay for public education, in return for allowing redevelopment projects to extend their lifespan by as much as 12 years. And the proposal includes a series of still hazy reforms, though not a crucial one recommended by the state's legislative analyst: state oversight to ensure that local redevelopment plans are legitimate. But numbers alone show the state would be foolish to accept this dubious bargain. The state has to give education about $2 billion annually to replenish tax money lost to redevelopment, thanks to Prop. 98's school funding guarantee. The redevelopment association's proposal would provide the state with as much as $2.7 billion over 10 years to help offset that cost, assuming those voluntary contributions actually materialized. But that amount is far less than the state will spend during that time to cover the redevelopment diversion. And nothing would prevent redevelopment agencies from creating new projects in the meanwhile, thus grabbing an even larger share of property tax money from schools. The contributions, however, would buy agencies a way around redevelopment reforms. The Legislature in 1993 set time limits of 45 to 50 years for how long redevelopment projects could continue, with extensions only possible if agencies could meet certain conditions, such as demonstrating that blight still existed. The redevelopment association plan would give agencies up to 12 years of additional life with no requirement to show any need for those extra years. The redevelopment agencies' proposal leaves intact a process that is easily abused, has little accountability and diverts badly needed tax money away from necessary public services. Even a fiscally challenged Legislature should be able to spot that deal's huge downside. Dan Walters: Redevelopment officials are offering pig in a poke By Dan Walters http://us.mc331.mail.yahoo.com/mc/compose?to=dwalters@sacbee.com The Sacramento Bee Published: Monday, Apr. 4, 2011 - 12:00 am Page 3A When Gov. Jerry Brown proposed to abolish more than 400 local redevelopment agencies and redirect billions of dollars in property taxes, the state's redevelopment industry shifted into political overdrive. Redevelopment officials claimed that abolition would devastate efforts to improve local economies and cost hundreds of thousands of jobs. However, independent analysts agree that redevelopment, while lucrative to subsidy-seeking developers, provides no substantial improvement to the state's overall economy. The agencies skim more than $5 billion a year off the top of the property tax pot each year, and the state must make up about $2 billion of that hefty diversion in extra payments to schools. Brown is saying, in effect, that the state can't afford to subsidize local development schemes and wants the money back. His proposal is a major issue in the budget stalemate and fell barely short of passing the Assembly. That has redevelopment officials worried, and they've conjured up an alternative – allowing redevelopment agencies to voluntarily shift some funds into schools in return for being allowed to extend redevelopment projects that are expiring. John Shirey, who runs the California Redevelopment Association and is the field general of the war against Brown's plan, calls it "a reasonable compromise for all involved" that would give the state about $2.7 billion in budget relief over the next decade. The CRA plan would provide only a small fraction of the money that Brown envisions, but the real clinker is giving redevelopment projects an automatic extension, a variation of a scheme that some redevelopment groups have floated for several years. The key word is "blight." Cleaning up urban blight was the rationale for the state's authorizing redevelopment agencies six decades ago. But over the years, redevelopment agencies adopted very creative definitions of "blight" to justify subsidies to private developers of hotels, auto malls, big box stores and other commercial ventures. One city, for instance, declared land blighted because it was "subject to periodic flooding," thereby justifying its redevelopment. The land in question was a marshy reach of San Francisco Bay that was home to birds and other wildlife. The use of redevelopment became so far-fetched that the Legislature tightened up state law, eventually decreeing that for projects to be extended, local authorities had to prove the continued existence of real blight, not the imaginary kind. That requirement put many projects in peril, and redevelopment officials have been desperately seeking ways to change or repeal it. Now they hope to make a silk purse from a sow's ear by offering, in effect, a bribe to the state to allow extension of marginal projects. It is, however, merely a pig in a poke. Read more: http://www.sacbee.com/2011/04/04/3525460/dan-walters-redevelopment-officials.html#ixzz1ImplzQae

Wednesday, April 06, 2011

Again...

Planning Commission Meeting on 7th Canceled
Next Meeting on the 21st

Jack Brown Say's.

"Protecting and preserving our California state park system is important to the Stater Bros. supermarket family," says Jack H. Brown, Stater Bros. chairman and chief executive officer. "We are proud to be a part of this program for the third straight year, as this is one way that we can give back to the local communities we are privileged to serve. The Preserve Our Parks program will have a significant and long-lasting impact on our Southern California state parks that will be enjoyed by local residents and future generations. As we celebrate our 75th anniversary, we are encouraging Southern California residents to support our goal of raising $750,000." from news paper article.
http://www.pe.com/localnews/sbcounty/stories/PE_News_Local_D_parks05.188d2f2.html

Perhaps Jack Brown's Stater Brother's supports state parks by collecting shoppers money for a fund raiser. They sure don't support the Parks in Grand Terrace when they got the Park Development Fees Waived on their new construction which consumed a great deal of formerly open or low density use land here in GT. They expect to have increased traffic and did not pay one cent to provide green space to offset their impact on the city.

Sunday, April 03, 2011

SB 77 is an alternative to Kill the RDA's Outright.

There is a link to the SB 77 an alternative to Gov. Brown's bill. It is not a total death blow to RDA's, but a restructuring.

http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_0051-0100/sb_77_cfa_20110315_182421_asm_floor.html


I THINK: The RDA's in the State have contributed to the deterioration of the middle economic class and has made economic slaves of our poor and lower economic classes. Therefor I am against its continuation. GT will not fall into a black hole, our community will still exist. However, any family that has gone through Bankruptcy knows, changes will happen, and a strong family gets stronger through the process. The not addressing the problem as a reality often is what causes the breakdown of family and civic ties. It is time GT assumes the RDA is dead, and work its way to a new relationship to the funds actually available to run the city, and re-organize our debt and obligations and stick to a budget.

The RDA's have consumed more tax payer's money than should be their share. Locking school and civic funding to a baseline of funding that doesn't reflect inflation, or increased costs and revenue. The RDA's just get bigger and bigger and more and more in debt. Then the city's use 25 percent of that debt to run the City. There is a built justification or motivation for abuse of the trust needed for an RDA agency, when it is ran by the very same city that benefits from increasing debts and approving just about any project regardless of if it fits the criteria or wishes of the citizens.


If the Citizens of GT were asked to have an added Bond Levey or a Tax to pay Stater Brothers to build a Store in GT how many would have said sure lets pay them to build a larger store. Citizens may vote for a citizen paid for Library and not vote for such things as our RDA has had its fingers in over the years. Do you think the Citizens would have allowed a Home that was owned by the RDA in the program for Low and Mod Income people, to be sold to or provided to Tom Schwab who was earning over 100,000.00 per year.

The RDA system has not worked for the Citizens of GT nor has it been a good financial discipline for the City of Grand Terrace. It is time for it to go, even if the State does not kill it from above so to speak.

The RDA's of California have been the drivers of the over inflation of property value and costs, and this is a direct cause of the economic problems we continue to suffer from. If we have to work for less, our property value and the debt on that property should be reduced to equate to 1/4th of our incomes.

Sure a few say 2 percent in California are still doing quite well sucking up cash, income, resources, and land as the numbers of unemployed, dispossessed, and homeless increase in our state and community.

The RDA system is one finger of the hand that has got its grip on the throat of our economy and on the 98percent of the people who do not benefit from it other than suffering the results of it inflating property costs, debt obligations and diverted state and local taxes. The RDA's can be dealt with at the City or State Level. One of the other fingers on that hand are the added City Codes, County and State Codes that exceed Federal Codes. I suggest suspending all City Specific Codes that are not required by the State Government. Then I would ask the State Government to re-evaluate any and all codes that are different from the Federal Standards and assess if the codes should be continued and perhaps let the citizens vote on the exceptions that are to remain in the California Code.

These Codes prohibit the building of small homes on private property. These Codes require a business to build a fancy facade to their property, these codes require homeowners to use Utilities that could be replaced by other technology. (If you wanted to have 0 power in your home for religious purposes, you by code are still required to have a connection fee and be connected. If you put solar power on your property SCE is not forced to buy your power, yet your forced to stay hooked up to their grid.). Sewer and Trash, and Water Rates are not set at cost of service, but tinkered with to increase the Administration costs. You are not allowed to discontinue service and occupy your home, yet, it is possible to replace these services and still have a proper sanitary home if you chose to change technology.

The other 3 fingers on that and around our economic necks is not in the purview of the City Council or even the State Government. This blog will only address those fingers that GT can have a direct impact upon.


San Bernardino Sentinel.

By clicking on the colorized link below, you should be able to view the April 1 Sentinel. In the future, if you have not received the Sentinel by Saturday, you may want to check your spam box. Because the Sentinel is mass-mailed, many email servers classify it as spam. By marking an email from the Sentinel as “not spam,” future postings of the Sentinel should bypass your spam box.

https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B8lNbWHOLLKIZWYzNDUyNzEtYzczMy00MDk3LTk3OWUtOWI5NTZhZGY3OGM0&hl=en&authkey=CPHA2bYD


The Sentinel and the Grand Terrace City News are both available on line. Please subscribe to their papers/online service. They do have costs to cover in their providing much needed service to our community. They also need to prove readership and a subscription helps them do this.

Thanks