High Finance in Mission Viejo
by Dale Tyler

The City Council recently approved a proposal (4-1, Reavis voted No) at the May 5, 2008, meeting (Item No. 9) that would pay ATS a 10-percent fee for any cell-phone lease arrangements that are monetized. “Monetized” sounds like “money,” so that must be good. Right? Wrong!

This item came as a recommendation from the Investment Advisory Commission, a group of citizens who are supposed to have significant financial experience and the ability to tell a good deal from a stinker. Unfortunately, these folks failed in their job and, because ATS is a big campaign contributor, forwarded this to the City Council, where ATS's friends would have their say.

It might be helpful to understand just what is being proposed here. In this case, monetization is in some ways similar to receivables financing. If a business has a need for immediate cash, it will go to the bank and ask for a loan based on the debts owed (receivables) to the business. In this way a business can satisfy short-term cash needs without having to wait for its money owed to be paid. Of course, the bank looks carefully at the quality of the debt and charges interest based on the perceived risk. Another monetization scheme is used by individuals who win a big legal judgment or lottery prize that will be paid over a long period of time in monthly or annual installments. In these cases banks will calculate the sum of all the payments to be received, then discount (reduce) the amount by the amount of interest they would lose on the lump sum they give to the individual holding the lottery ticket. Banks also reduce the amount further to account for any uncertainty in their getting payments, which would be small for a lottery ticket but larger for lawsuit payments. Each of these examples could be called monetization.

What ATS is proposing is that they would find a bank or other investors to give the city a single payment up front in exchange for all of the payments on the cell-tower leases in the future. This might sound like a good idea to some, bringing out the old saw “a bird in the hand is worth two in the bush,” but this is an inaccurate comparison. First, one has to look at the fees that would likely be charged in this transaction: ATS, 10 percent off the top, banks, 6 percent to 8 percent plus a “risk premium” that could be as high as 20 percent. This means that we would likely lose at least 10 percent and possibly as much as 30 percent on the money we would take in over the next 20 years, even assuming that we invest all of it and use it for reserves.

One also needs to look at the reason for wanting the cash up front. We often hear council Pollyannas like Lance MacLean and Trish Kelly citing the strong city reserves. Yet, they want this cash. If the city has no immediate cash requirements because of its large reserves, then why get the money up front? There are several possible answers. The first and most likely is that Frank Ury seeks to get additional kickbacks in the form of campaign contributions from ATS, a longtime source of money for his campaigns. Another possibility is that the city's reserves are below the “healthy” level that is claimed, and this is a way to get them back to minimum levels. The third possibility is that the council needs more money to spend on wasteful projects. To be fair, there is a fourth reason why the council wants to do this, and that is they have information that the cell-site leases are not as solid as they have claimed in the past, and this would be a way to get money from leases that will be canceled before their terms run out. While one could imagine this might occur as new technologies become available that require fewer towers or cell companies merge and fewer individual sites are needed, it seems very unlikely, considering the accelerating pace of cell-site deployment.

It is clear to me that this is a bad deal for the citizens of Mission Viejo and, at the very least, a back-room way to enrich ATS at our expense. The unspoken claim that the city really needs the money is, at best, a gross exaggeration designed to make it look like the City Council is finally doing something that is fiscally responsible when nothing could be further from the truth. Taking this cash away from future city operations will be one more reason why people will cite this City Council as pandering to today's population at the expense of the people who will live here in 20 years.

The NewsBlog will be watching this story as it unfolds in the months ahead. We need to do more work on the city's finances and find out the truth about our actual financial condition. With projects like the senior center and rec centers going 150 percent to 200 percent over budget, maybe there is nothing left in the cookie jar.

Search for Permanent Sheriff
Open Letter to Board of Supervisors

 Dear Supervisors,

As President and Community Leader of the Board of Directors for Aliso Villas Condominium Association, Mission Viejo, I would like you to be aware of our position and support. 

As a community, we depend on the OCSD for assistance often, and we have worked well with the officers in the department. Sgt. John Meyers, Lt. Steve Bernardi, Officers Tammy Descoteaux, Anne Harkey, D. Breckner, and Seth Hall are just a few of the officers who have provided our community with excellent, caring and profession service.  I have never associated any of these officers with Mike Carona. 

I recently had the pleasant opportunity to meet and visit with Jack Anderson, acting Sheriff of Orange County, for several hours on a personal level, and I was impressed with the man and the acting sheriff.

Here is a soft-spoken man of excellent intellect, deep knowledge of the Sheriff’s Dept. and Orange County. He is thoughtful and respectful of the confidence placed in him. He respects his employees, residents and the department. He speaks well, knows the problems and what he has to overcome, but he has confidence in his ability to bring about the changes needed. I would not even begin to go into what has to be done to restore the residents’ confidence in our Sheriff’s Dept., but I truly feel, with a man of Jack Anderson’s substance at the helm, that process will be far swifter and less painful than if someone with less knowledge of the department and county were to be appointed as sheriff. We need someone up and running with his feet firmly on the ground, not someone who has to scramble to catch up. Jack is already there and has been there, and he should be our new sheriff without a doubt.

I would like to ask that when the dust settles, we retain Jack Anderson as the Sheriff of Orange County. I feel he is above the actions of the minority who created the problems in the Sheriff’s Dept., and he is an honest, sincere, decent man who deserves this post more than any others. He has been with the department for 21 years; his original aspirations upon graduating from the academy on day one were to be part of the administrative process. This is not a new decision for Jack; it is something he has been building and working towards since his early days in the military. 

Jack is good at what he does, and the Orange County Sheriff’s Dept. deserves a chance to prove it is the best by having a leader who believes in and places the department and the residents of Orange County first – above himself. Jack is someone who does not have to deal with a learning curve, which could easily take weeks or even months to become acclimated to the department, employees and the position. Jack already knows the job, the people, and the county. There will be no learning curve, no painful transition, just continued exceptional police work. 

In my opinion, we already have the active Sheriff of Orange County, Jack Anderson. I respectfully request that Jack Anderson have your vote to become the permanent Sheriff of Orange County when you make your decision. 

Thank you for taking the time to read my letter.

Kathy Miramontes
Mission Viejo Resident, Homeowner, Community Leader, Taxpayer and Voter

Alleged Shell Game Played in Special Education
by Dr. Ron Lackey

The Or. Co. Special Education "Reliance" Task Force, chaired by Dr. Ron Lackey, reports that the Or. Co. Board of Education (OCBE) continues to play a "shell game" with the half-million special education dollars housed at OCBE. These special education dollars belong to the 28 Or. Co. school districts.

The alleged ruse used by OCBE, which is a party to the creation and maintenance of a Joint Powers Agreement (JPA), behind which the OCBE allegedly hides, claims that the JPA is a separate agency, and thus OCBE can allegedly shirk any responsibility and/or accountability for the OC Special Education "Alliance" and the half-million special education dollars involved!

Readers are invited to go online and check the budget for the so-called "Alliance," a Trojan Horse, behind which allegedly the OCBE and the 28 school districts hide. Observe the use of "Alliance" jointly accumulated special education dollars to gang up in appealing adverse special education administrative hearing decisions that had favored parents of special education children – resulting in the alleged filling of attorney pockets, and involving continued alleged conflicts of interest.

"Reliance" is pursuing a goal of the dissolution of the "Alliance" JPA and the return of the special education dollars paid by each school district to be used by school districts in the current fiscal crisis. OCBE has been asked to provide a listing of the special education dollars that each local school board has paid, and "Reliance" will publish that list when it is received.

"Reliance" will now proceed into the political and legal arenas to seek the dissolution of the "Alliance" as well as a return of the half-million special education dollars to local school districts.

Ill-conceived Project Was Wasteful
Letter to the editor

The closing comment by Keith Rattay, Mission Viejo Public Services Director, regarding the pile of easels [Or. Co. Register, “Ask us anything,” May 9], that the cleanup after a big event “just doesn’t happen overnight,” was technically correct if not entirely satisfactory. After the city learned that its monument to waste had been discovered, the pile was dismantled within 24, not 12, hours, begging the question, “Had no one alerted city hall, what would have happened to the pile of easels?”

If the city was planning to keep 250 easels and donate the other 250, why were they dumped haphazardly? A better question is, “How much did the city spend on these easels before throwing them onto a heap?”

But, wait! There’s more …

What happened to the 500 disposable cameras the city handed out to residents at no charge? Very few cameras came back with photos for the supposedly record-breaking display. Is there any list of camera recipients and those whose photos were in the gallery?

Where are the 500 grossly enlarged, laminated photos and “My MV” posters now? Was the record for “longest photo display” set and properly recognized? Was this ill-conceived project a costly failure from the outset?

Perhaps Rattay’s job title should be Director of Unwarranted Largesse.

Lisa De Paul-Snyder
Mission Viejo

Secret and Illegal Superintendent’s Contract Discovered
Press Release

Despite numerous public statements to the contrary, it has now been confirmed that CUSD Supt. Woodrow Carter and Board President Mike Darnold executed and delivered a secret and illegal superintendent’s employment contract. This action violated the California Brown Act and other applicable laws, and the contract is unenforceable for numerous reasons, including the following:

1. The written contract was never presented to the CUSD Board of Trustees for vote and approval.
2. The written contract was never placed on the CUSD open-session agenda for review and comment by the public (and approval by the board).
3. The signed contract now contains a highly suspicious and unauthorized 18-month “golden parachute” -- a provision that was never discussed or approved by the CUSD Board of Trustees.
4. Supt. Carter had repeatedly and publicly rejected the contract offer (thereby legally terminating the effectiveness of the board’s original offer).
5. The Brown Act expressly prohibited the board from taking action in closed session to increase the superintendent’s compensation.

A copy of the illegal secret agreement can be viewed here

Chronology of events:

02/25/08 – A special board meeting is called for the purpose of voting on massive, controversial cuts to teachers and other district personnel. A closed-session item is added to the agenda titled, “Public Employee Employment – Superintendent’s Contract.” During closed session, the four CUSD old-guard trustees vote in favor of offering to Supt. Carter a new three-year contract and a massive salary increase (in obvious violation of the Brown Act). When the board returns to open session, President Mike Darnold fails to publicly disclose the terms of this contract offer.

02/26/08 – OC Register story confirms that CUSD board President Darnold failed to disclose the terms of the contract offer at the Feb. 25, 2008, board meeting. In addition, the OC Register reports it had now learned the board had voted in favor of offering to Supt. Carter a $972,000 three-year contract.

02/28/08 – Carter attends two public town hall meetings where constituents urged him to reject the contract offer for the good of the district. Supt. Carter publicly announces that he had rejected the contract terms offered by the old-guard trustees and would not sign a new contract.

02/29/08 – The Capistrano Dispatch reports that Carter had “announced at two community meetings that he will not sign a $324,950-a-year contract offered by the Capistrano Unified School District, opting to continue working under his current interim deal.”

OC Register reports that in response to intense public criticism, Carter had decided to “reject the contract” and confirms that CUSD Communications Director Beverly de Nicola stated that, “the new $974,850 contract is invalid now and will have to be renegotiated at a later date.”

Supt. Carter confirms in writing to CUSD board members and staff that he “would not sign the new contract … .”

03/13/08 – Supt. Carter notifies CUSD board members he had signed his new contract effective as of Feb. 25, 2008. Someone had now changed the end of Section 1 to read, “If the Trustees fire the Superintendent, he is entitled to 18 months compensation pay.”

CUSD Recall Committee Spokesperson Tom Russell stated, “This shocking cover-up demonstrates a continuing conspiracy to conceal important information from the public – the district attorney needs to intervene immediately.”

Discovery of the secret employment agreement comes on the heels of the discovery last month that Carter and the four old-guard trustees (Marlene Draper, Sheila Benecke, Mike Darnold and Duane Stiff) were attempting to enforce an illegal secret “verbal agreement” with respect to the acquisition of additional land needed to complete the construction of the controversial $150-million San Juan Hills High School. 

CUSD Update
Editorial staff

Candidates challenging CUSD incumbents have been in short supply for years. Not many people dream of being on a school board, particularly in CUSD, where trustees have lately left in disgrace. With the district now in turmoil and practically bankrupt, those willing to run should be applauded for their courage.

With two CUSD trustees targeted in the June 24 recall election, four challengers have stepped forward. Only one challenger, Sue Palazzo, is running to replace Trustee Sheila Benecke in Area 5. Challengers Makam Subbarao, Ken Maddox and Gary Miller are candidates for Trustee Marlene Draper’s seat, Area 2. All CUSD residents get to vote on the recall as well as for candidates in both Trustee Areas.

What will reform-minded parents put on a wish list if the board majority changes on June 24? Will Supt. Woodrow Carter still have a job on June 25? Will the new board reinstate laid-off teachers and downsize high-ranking administrators? Will a big “for sale” sign be visible from the freeway on the $52-million administration center? Those actions might eventually occur, but Trustee Ellen Addonizio’s request for a forensic audit of CUSD should happen immediately. To change many things that are terribly wrong at CUSD, an investigation has to begin.

Attempting to help the incumbent trustees out of office, Councilwoman Trish Kelley has jumped on the bandwagon. This woman, who couldn’t get enough of former administrators James Fleming and David Do-me (Doomey), now appears to support a recall. In 2005, Kelley invited several of her buddies from Fleming’s regime, including Trustee Marlene Draper, to a council meeting and attempted to introduce them. Kelley kept calling out their names, as if she couldn’t tell they hadn’t bothered to come. At the time, Draper and her six Fleming-era CUSD colleagues were targets of another recall effort. Whenever Do-me attended a Mission Viejo council meeting to tell lies at the public microphone, Kelley was all google-eyed and breathless. One of the reasons it is taking so long to remove corrupt officials from CUSD is the dolts who ignored their outrageous behavior. Instead of demanding that Mission Viejo schools be fixed up, Kelley defended the culprits who diverted dollars to the Taj Mahal administration center.

Dr. Ron Lackey, who ran unsuccessfully for a school board seat in 2006, continues his leadership in CUSD. Appearing on this week’s blog is Ron’s article about funding for special education. Special Education Alliance is the Orange County Superintendent’s Organization. “Alliance” is funded with dollars that should go to students for education. Its critics say money taken away from students is used to fight against special education cases. Anyone who just arrived in CUSD might not know the district has a reputation for failing if not refusing to provide adequate special ed for students who are entitled to it. Some parents say the district would rather spend a fortune waging a legal battle against providing education instead of teaching students as needed.

If anyone were to add up all the legal fees in CUSD, it would be clear that education is not the top priority in this district. A great deal of the “lawyering” is used to defend lawbreaking and unethical conduct. By the time a district goes to such great lengths as lawsuits to avoid educating students with disabilities, it has reached the ethical bottom.

The Buzz

A resident of San Juan Capistrano provided an interesting tip, quoting an attorney from SJC with regard to overcrowding a single-family home with multiple families or other occupants. “There is indeed a way to limit the number of people in a single-family residence. There are laws against ‘lodgers’ or turning your home into a motel – you cannot do it.” Others at a meeting in SJC where the topic came up said, “There is such a law, and it can prohibit too many people from residing in one single-family residence.” This is entirely opposite what’s being presented by Mission Viejo’s city attorney to the sleeping circus on the council. The Buzz thanks the SJC reader for information deserving follow up.

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Mission Viejo residents who gave input at the May 6 OC Board of Supervisors meeting were in agreement. The candidate who becomes permanent Sheriff of Orange County should be familiar with the county, its communities, residents, geography and everything else. One MV resident gave an example: the candidate should know where Fashion Island is, how to get into it and how to get out of it.

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According to the May 10 OC Register, the county supervisors shortened their list to nine candidates for sheriff. The short list includes Acting Sheriff Jack Anderson, Santa Ana Police Chief Paul Walters, 2006 OC Sheriff candidates Ralph Martin and Bill Hunt, Glendale Police Chief Randy Adams, Salt Lake Co. Undersheriff Beau Babka, San Bernardino Co. Undersheriff Richard Beemer, Anaheim Deputy Police Chief Craig Hunter and L.A. Division Chief Sandra Hutchens.

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The county supervisors are not in an enviable position in appointing a permanent sheriff, as political pressure and attacks are intense. At the May 6 BOS meeting, two public speakers lambasted Santa Ana Police Chief Walters, saying he has personal and financial baggage. Proponents of outsiders said only an outsider could restore integrity to a “corrupt department.” A Mission Viejo resident later reacted by saying any candidate who maligns the OCSD and its 4,000 dedicated men and women is not suited to leading them.

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Information is emerging that Capo USD Supt. Woodrow Carter signed an illegal contract. Some residents may remember his making a big public to-do over saving money for a cash-strapped school district by rejecting a contract giving him a raise. Legally, Carter cannot accept a contract after rejecting it, but he later privately signed the contract. Additionally, Carter and school board President Mike Darnold signed a contract that hadn’t been approved by the board. Allegedly, someone illegally penned in a golden parachute clause for Carter as well. Is an early exit already anticipated?

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Where is the Or. Co. District Attorney these days? Why isn’t he prosecuting politicians and public officials who are either so corrupt they break the law or so incompetent they break the law? D.A. Tony Rackauckas is quite busy endorsing candidates for the June 3 Primary, and voters should ask themselves what T-Rack’s endorsement means. T-Rack became the D.A. in 1998 after his predecessor, Mike Capizzi, was disavowed by the county bigwigs. Capizzi had angered the good ol’ boys by prosecuting their corrupt political brethren.

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Some parents who closely follow CUSD say that Carter’s way of doing things is very much like former supt. James Fleming’s way. As a primary difference, Carter plays up his claim of openness, and he’s more affable than Fleming was. Carter’s exterior impressed some folks, including at least one of the “reform” trustees who loudly sang his praises the day he was hired. Instead of embracing and praising the unknown, most others withheld early judgment. Who should become the next superintendent? How about an involved parent who knows the district, has shown ethical leadership and has a professional background in finance? Does anyone know such a person?