Category Archives: County Government
Release Grand Jury Transcripts on City Manager Salaries
More than year after a scathing Orange County Grand Jury report that found former Tustin City Councilman, Jerry Amante, had abused his authority, Fred Smoller is speaking out and calling for the release of the Grand Jury Transcripts.
In a recent editorial on the Voice of OC Smoller, who headed the innovative Masters in Public Administration program at Brandman University, was targeted along with student researchers and Laguna Hills Mayor Barbara Kogerman when they researched and published a report on the ridiculous salaries being paid to city managers in Orange County.
When the Grand Jury report was originally published in July of 2012, Jerry Amante went on the offensive, claiming the jurists were misguided. “I don’t know how the grand jury got it wrong, but they’ve got it wrong”.
Smoller, who’s students were the focus of the attack by the good councilman, says otherwise:
Others — myself, the students, The Orange County Register’s editorial page and other prominent elected officials such as Supervisor Shawn Nelson and former Assemblyman Chris Norby, and a big chunk of the public — feel the grand jury got it right.
Unfortunately, grand jury testimony is almost always conducted under a cloak of secrecy. There is also the endemic issue of the lack of authority inherent in this arm of the courts (at least in the Real OC). Amante and his cohort, Laguna Hills Councilman Alan Songstad, simply had their resepctive city attorneys thumb their noses at the report. In Tustin’s case, they stated they had no authority to chastise a councilman for what amounted to a personal issue.
When the city decided to vote on the issue of what to do, we pointed out that Hizzoner was not only allowed to vote on his own punishment, he was the deciding vote. That, of course, happened with the city attorney’s blessing. David Kendig, the city attorney, even wrote the letter to the grand jury blowing them off with a lame 1st Amendment explanation. Smoller also points out this problem with the wolf choosing his own punishment for killing the sheep:
Mr. Amante cast the deciding vote on the motion which questioned his conduct, a clear conflict of interest. Both Songstad and Amante are attorneys.
While Smoller says that there are parts of the report that could have been done differently, he believes the entire episode has been warped through the efforts of many in an attempt to muddy the waters. In his editorial, he calls for a release of the grand jury transcripts. Smoller and others believe that, although grand jury testimony is normally secret, in this case, the public interest far outweighs the need for confidentiality:
The fact that this matter continues to be reported on says that questions remain unresolved. Releasing the transcripts will also allow for the assessment of the grand jury’s work, which has been harshly criticized by some members of the Orange County Board of Supervisors.
I hope Mr. Amante and Mr. Songstad and their former respective city councils and the others who criticize the report will join the effort to daylight the grand jury transcripts so we can find out the truth.
If the grand jury does sloppy work, we need to know it, and fixes need to be put in place…
Smoller also says the public deserves to know if the Orange County Grand Jury is really doing their job. Releasing the transcripts, he says, will vindicate those who served honorably on the jury and demonstrate the constraints they are under.
We agree. As frequent critics of the Orange County Grand Jury, opening transcripts that would back up their claim on this complex situation would go a long way toward restoring credibility to an institution that has been dismissed, more often than not, with a snicker and a wink. If the Grand Jury is doing the job we expect of them, then we the public should have confidence in them. Releasing the transcripts will go a long way toward restoring that confidence.
On the other hand, if Jerry is right and the jury “got it all wrong”, then he should have nothing to worry about. Right, Jer?
In news from the Republic of Orange County, we found the not so surprising tidbit that OCTA has voted to refinance the 91 Express Lanes Bonds. The 91 toll roads, supposedly an award-winning design, has been a money losing operation from the beginning. Originally a private enterprise wherein mostly foreign investors bilked the state out of real estate on the center divider of the 91 freeway to build a business, that business turned out -as predicted by many- to be a deep hole to sink taxpayer money into. And, sink it they did.
When California Private Transportation Company developed the toll road complex, they quietly transferred ownership back to the State of California who then leased it back to CPTC (confused yet?). CPTC then continued to operate the toll road on a for-profit basis, presumably for the next 35 years.
In 2003, when CPTC couldn’t make a dime off the venture, they wisely conned the Orange County Transportation Authority to take it off their hands for a cool $207.5 million in cash and tokens (OK, I’m kidding about the tokens – everyone knows the toll road uses FastTrak).
The toll roads use “congestion pricing” to set toll prices for any given hour – except it’s not, really. True congestion pricing would require real-time input on congestion to determine pricing. That wouldn’t work for the toll road, which the developers (and OCTA) knew would display a grossly underused road at any hour of the day. Instead, they use a predictive model to determine the most heavily congested hours and adjust every so often for changes. That, of course, is not exactly transparency in government. But, then, one only has to look at the Toll Road website for the inside information. Oh, wait, that paints a rosy picture that just isn’t true.
And staff at OCTA know it.
In May of this year, a staff report titled, “91 Express Lanes Debt Restructuring” was sent to the OCTA Board, of which our own Al Murray and Todd Spitzer belong. That report, which you can read here, outlines deep trouble with the debt structure of the toll roads and the immediate need to refinance both the 2003 and current bonds for the Toll Roads. Recommendation by staff, of course, is to refinance.
Now, what I know about bonds and debt restructuring could be put on a pinhead. But, I do know how to read bond ratings (thanks, brother John) and can tell you that, when your bonds go from an original Aaa/AAA/AAA rating to A1/A/A-, you are in deep doody. This is akin to your going from an 800 credit score to a 400 credit score only, while your interest rate goes up to buy that house, the interest rate goes down on the bonds and they become difficult to sell-unless you offer artificially attractive interest. Oh, but there are laws against that sort of thing, aren’t there? Well, according to Spitzer, who sits on the OCTA Finance Committee, the rates went from 2.75% to 2.65% practically overnight. Spitzer, who in his latest newsletter to constituents is trying to paint a portrait of a rose from a picture of a sow, is clearly losing the battle on the Toll Road.
Al Murray, by the way, is of the same mind as his predecessor Jerry “Boss Tweed” Amante was, that we should turn the carpool lanes on the San Diego Freeway (there, I said it) into toll roads as well. All this while not one toll road in the county can meet its ridership or its financial goals. Another Tustin Councilmember, Chuck Puckett, is a member of the Foothill/Eastern Transportation Corridor Agency and, although we haven’t checked, we are betting he is in favor (like Amante was) of the Foothill Extension that would wreak havoc on the Trestles area.
Peas in a pod.
What we can’t figure out is why the Republicans in this county continue to chase after the toll roads, a proven money loser for government and a bane to the public. If you have ever ridden any of the county’s toll roads, you know that -at any time of the day- they are grossly underused. None of the toll roads have been able to reach their lofty projections. Their answer to low ridership? Raise tolls, making the roads even more expensive and out of reach for the everyday commuter. The 91 Toll Roads show the best ridership of any in Orange County. But, they are still vastly underused. An old non-compete agreement threatened a widening project at one time. When the issue was settled, mostly due to the sale to OCTA, ridership fell when the widening was completed. Will connecting the 91 and the 241 Toll Roads help matters? Possibly. But, are we, as taxpayers, willing to fund another possible boondoggle to find out?
We, as taxpayers, are stuck with the existing toll road boondoggle foisted upon us by a so-called conservative leadership shouting the privatization mantra. But, time and time again, we’ve seen that privatization of government enterprises creates substandard product amidst the cronyism and backroom deals. Toll roads are not the answer and it is time to tell our elected officials to get off the same broken record. We may be stuck with what we have. It doesn’t mean we should continue to propagate the species.
I hope everyone enjoyed National Night Out at the District in Tustin. The annual event is put on by public safety around the country. Many cities in The Real OC, including Tustin, enjoyed a different view of the police and fire departments that serve our community. We are fortunate to have one of the finest of each to protect and serve.
Since there were no official meetings at the city level this week, we thought we would discuss an issue of pressing concern at the county level, where it is getting to be a regular thing that the Orange County Board of Supervisors have trouble admitting fault.
The Republic machine that runs most of Orange County just doesn’t seem to get it. It seems every time local government gets into trouble, they don’t want to admit they had any part in it. From the multitude of sexual harassment suits to the CalOptima debacle, the Orange County Supervisors always seem to find a way to blame others for their stupidity. When Carlos Bustamante was finally outed for his, shall we say, interesting management techniques, the public discovered what the rank-and-file employees of Orange County government knew all along. Yet, the OC Supervisors played the blame game and wound up using Tom Mauck as cannon fodder.
The Board of Supervisors continued to blame others for their poor oversight when the Grand Jury issued a couple of reports questioning their ethics and management of CalOptima, even when faced with the facts. John Moorlach, who refuses to lead by example, complained when the Grand Jury did its job. And, Todd Spitzer, in a holding pattern for Tony Rackauckus’ job (and, consequently, the Jury’s potential boss), was indignant that anyone, let alone the Grand Jury, could find fault with the BoS.
Through all of the bad publicity the Board of Supervisors has undergone lately, one important issue seems to have fallen out of the public’s eye. It wouldn’t be that big of a deal except it is worth $76.5 million dollars. That’s the amount of money the state will withhold from Orange County in property tax unless they can come to some sort of agreement.
And, as usual, the Board of Supervisors wants to lay the blame on someone else. The only trouble is, they couldn’t. So, they went into denial mode.
Back in May, the Voice of Orange County outlined the problems the county ran into when they refinanced bankruptcy debt. At the time, Orange County still received vehicle license fee money from the state to help with the remaining debt. In 2005, however, supervisors sought a reduction in costs and, in so doing, they inadvertently eliminated their access to the VLF. Actually, that’s not quite true. Many sources claim the county was aware of the faux pas but chose to ignore it, hoping no one else would notice.
That worked until this year when the folks working on Governor Brown’s budget caught up with the money and took it back. That resulted in a court case that everyone except the Supervisors knew the county would lose.
After ignoring the problem and keeping the money, then losing in court, the Board of Supervisors, now faced with the facts, is finally ready to make a deal with the state. Only trouble is, the state may not be willing to deal. And, of course, the supes have said that, if no agreement can be reached, others will pay for their mistake.
“Bridging the $76.5 million reduction would require a combination of labor reduction, revenue assumptions and non-labor cuts (e.g., services & supplies, equipment, capital projects, etc.),” reads a memo being distributed by county Chief Financial Officer Frank Kim.
County labor leaders have already sent out mass notices warning workers about potential cuts and where the pain might be felt.
During a meeting with the OCEA Bargaining Team, Kim offered three scenarios to OCEA members. One was that the County would lose the $76.5 million in VLF. The second scenario would have them lose the VLF but convert a special property tax set aside that Senator Lou Correa secured in 2009, into an ongoing replacement fund. The third scenario was just as dire: The county keeps the VLF but loses the property tax set aside.
Of course Kim, who also appears to be in denial, didn’t mention the likelihood of the state thumbing their nose at the county and keeping everything.
In a missive to employees, Berardino laid out the BoS strategy to lay the responsibility of getting out of the mess by taking it out on labor.
OCEA General Manager, Nick Berardino, is not taking it lying down. Berardino, who appears to be the only one who saw the potential for failure during this episode of the BoS drama, told the Supervisors that it would be unfair to continue to place the burden of resolution on the backs of the rank-and-file employees of the county.
The County predicts they could bridge the revenue loss with labor reductions, revenue assumptions and other non-labor cuts, however any specific and direct impacts are not currently known. We told the County again, as we’ve said many times before, working families did not create the bankruptcy and the fallout from the bankruptcy must not fall on the backs of working men and women!!
Berardino further points out that the blame lies squarely with the Board of Supervisors who, even though they were aware of the cuts, directed then Auditor-Controller David Sundstrom (who has since left for cooler skies to the north) to act as if nothing had happened. Talk about denial.
There may be light at the end of the tunnel. The $50 million dollar deal Senator Correa cut for Orange County in 2009 has now become a key bargaining chip in the game.
“What we thought should have been a step toward a bit of gravy is now just a struggle to get back to where we were,” Correa said. “Without that $50 million, we’d be nowhere. There would be nothing to negotiate.”
The deal Correa is attempting to work out, however, will only return the county to the original status quo and will still leave the county with budget cuts to deal with, some permanently. And, while the county said they are not looking at layoffs to bridge the funding gap, Nick Berardino is not likely to take them at their word.
Neither are Department Heads, some of whom are scrambling to meet with their employees to reassure them -or warn them- of budget issues. Most departments have cut to the bone as it is and, while employees have been able to maintain services, that is not likely to last should layoff occur.
So, while the Board of Supervisors fiddle, it is the public that could get burned if a deal can’t be reached. Senator Correa, who has come to the aid of the county many times before, describes the negotiations with the state as a “painful process”. We agree. Good luck, Lou.
Hot on the heels of a scathing grand jury report and the announcement of an investigation by the Fair Political Practices Commission, the FBI announced Wednesday, they have created a task force to investigate corruption here in Orange County. The earlier probe stems from management issues with CalOptima, the county’s low income health system for the poor.
Earlier this year, the Grand Jury issued two reports highly critical of the Board of Supervisor’s mismanagement of the CalOptima system. Supervisor Janet Nguyen, along with others, has been accused of conflict of interest and ethical breaches.
On June 18th, Supervisors lashed out at the Grand Jury, saying it was not their job to publicly embarrass the county. Supervisor John Moorlach, in one of his typical misconceptions, stated, “Your here to help us, not embarrass us nationally.” Todd Spitzer, who will eventually run for district attorney, went as far to say that their is no corruption in Orange County. The Board then moved to cut the grand jury stipend in apparent retaliation.
As it turns out, the FBI formed the task force in April, about the same time as the FPPC announced its own investigation. The FBI, which has a permanent anti-corruption unit, said they typically form a task force to focus on specific issues. According to the Voice of OC report, the task force consists of agents from the FBI, the IRS and other agencies, bringing in experts in all fields. In other words, they form a task force when a small, boutique investigatory unit just won’t do.
This is not the first time the county has undergone investigation by the Feds. The FBI was involved in investigations during the 1994 bankruptcy as well as the more recent witness tampering charges that brought down former OC Sheriff Mike Carona, who is serving a 6 year sentence in Colorado. That investigation revealed widespread corruption in the upper ranks of the sheriffs department.
The formation of the task force highlights the ethical woes of the county. And, although it may seem the task force is pointed at the Board of Supervisors, other elected and former officials of cities and special districts would do well to watch themselves. The FBI has a tendency to cast a wide net when it is looking for information. Typically, during an investigation of this type, other deeds of mismanagement on the peripheral of the investigation are brought into the light and reviewed.
Coming to mind are the charges brought by the Grand Jury last year against our own Jerry Amante, accusing him and another councilman from Laguna of misusing their official positions with their cities to interfere with Brandman University officials. Although the city of Tustin made an official response to the report, as required by law, they never actually denied the charges. Rather, they stated the Grand Jury got it all wrong and, even if there was a misuse of power, the city could hardly be held accountable for what two renegade councilmen did on their own time.
The rhetoric got so bad, self-appointed and well-respected watchdog, Shirley Grindle actually fired off a letter to the Register saying the two officials owed Smoller of Brandmand University a “huge apology for their unethical behavior.” She said they should then resign in disgrace.
So, while the conservative Republicans of this town continue to be incensed at the thought of their dirty laundry coming to light, it looks like the FBI has gladly set up shop in their back yard to eke out corruption. While I expect much of the work to be done in secrecy, one can expect an investigation of this size will bring out a wide variety of players in county politics. Don’t be surprised to find the fickle finger of fate pointed at a variety of folks, both public and private. Coming to mind are those behind the well funded smear campaigns against Tracy Worley-Hagen and David Waldram that brought in hidden money from local contractors we suspect do business with the city.
Denial is one thing. But, our city fathers may have to prove it this time. And no amount of ranting on the dais will keep the FBI from their task.