Today’s Anaheim Closed Session Agenda Reveals Departure of Henry Stern, and Other Secrets

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Renowned Anaheim City Treasurer Henry Stern is suddenly out. Will the Finance Director gobble up his duties?

It’s time, once again for the magical twice-monthly Agenda review for the Anaheim City Council. It is going to be a quiet week. (Maybe.) Let’s begin our review with the Closed Session agenda.

http://local.anaheim.net/docs_agend/ag_3vers/agenda.pdf

4:00 P.M. – CLOSED SESSION

1. CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION

(Subdivision (d)(1) of Section 54956.9 of the California Government Code)

Name of Case: Coalition of Anaheim Taxpayers for Economic Responsibility v. City of Anaheim, Orange County Superior Court Case No. 30-2013-00695342

2. CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION

(Subdivision (d)(1) of Section 54956.9 of the California Government Code)

Name of Case: Acevedo, et al. v. City of Anaheim et al., USDC Court Case No. SACV14-01147 ODW (Ex)

3. CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION

(Subdivision (d)(1) of Section 54956.9 of the California Government Code)

Name of Case: DeSouza v. City of Anaheim, Orange County Superior Court Case No. 30-2015- 00771217

4. CONFERENCE WITH LEGAL COUNSEL–ANTICIPATED LITIGATION

Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of California Government Code Section 54956: One potential case.

5. PUBLIC EMPLOYEE APPOINTMENT

(Section 54957 (b) of the California Government Code)

Position Title: City Treasurer

While we mere mortals are not permitted to participate in Closed Session (often with very good reason, although those good reasons become very badly abused by self-dealing leaders) we do get to peek behind the curtain and see the general issues being discussed, at least when the City Attorney properly agendizes the meetings as required by law.

Wait!  Do you mean to tell me that Anaheim’s City Attorney might not disclose the Closed Session agendas as carefully as one might hope for? Say it ain’t so! And here We all thought that was why Anaheim is paying our new(ish) City Attorney more in starting pay than our previous City Attorney was making after over a decade on the job. The City insists it isn’t because the new guy is young, male, and white. And certainly the whole “less experience” thing is not a selling point. But if it turns out he is less careful about how to set the agenda, well we might just have a problem. After all, Mr. Houston is rather new to this City Attorney thing, so I am sure he will get the hand of it any day now. Ultimately this becomes something is for Cristina Talley to work out with her previous employers, and/or something taxpayers may end up shelling out for as more citizens call the City out on potential violations of the law that requires the City to properly inform the citizenry of how the public’s business is being conducted. And amazingly enough, that very subject comes up on the November 17 Agenda, ironically discussed in Closed Session so we will never know the true outcome of those talks.

Let’s tackle these Closed Session agenda items separately, and in reverse order, with the exception of the CATER suit — which is now my suit — which my Lawyer/Editor says not to discuss publicly for now.  That day will come….

5. Public Employee Appointment. City Treasurer.

If we are appointing a City Treasurer it means that Henry “Hank” Stern is no longer with the City of Anaheim, or is about to leave. And frankly, you heard it here first, folks. We (many of us writers in a group post under the name of “Anaheim Insider”) called that outcome when the Charter was “updated” in the June 2014 primary election with the passage of “Measure C” — supposedly a purely technical housekeeping referendum that turned out to be anything but.  Measure C created numerous changes in the way Anaheim manages our finances and accounting, pretty much all of them ultimately creating a LESS transparent process that makes it easier to pull the wool over the eyes of taxpayers. But Hell, we are merely a lowly bloggers, so never mind us.

Hi — remember me?

Among the June 2014 Charter changes was the authorization to move the City Treasurer under the City Manager’s oversight, thus allowing the City Manager to fire the City Treasurer out of sight of the public. (Did that happen here?  We don’t know!) Previously the City Treasurer, to protect his or her independence, answered only to the City Council.  Firing him required disclosure on the Closed Session agenda, just as the City did when firing City Attorney Cristina Talley (and replacing her with someone playing well within the special insider’s club of Curt Pringle.)

So watch for Hank Stern to be replaced by Finance Director Debbie Moreno, as now provided for in the “new and improved” City Charter. Moreno is not bad at her job, and we need to recap the last Council meeting and sing her praises, or if she was not directly responsible for the uber-genius math skills behind Agenda Item 19 on November 3, we need to applaud whoever in her department completely NAILED a very important and complex issue on behalf of the taxpayers.

http://local.anaheim.net/docs_agend/questys_pub/6649/6679/6680/7099/7192/Staff%20Report7192.pdf

So Moreno is not going to plunge the City into bankruptcy as our new Treasurer.  (We think.) In fact, she did a pretty good job of disclosing for the FIRST TIME this year the balance sheets for the long term debt obligations nobody (except the Coalition of Anaheim Taxpayers for Economic Responsibility, or CATER, which I head) has wanted to talk about. She also finally quantified the calculations to show how the City does and does not benefit from the presence of our “economic engine,” the Resort District, putting the lie to the long-believed claim that the Resort provides 50% of the money in the General Fund.

But we also watched the budgeting sleight of hand provided by Moreno when the Council majority made it clear they wanted the Convention Center bonds approved. And it was Hank Stern’s review of the 1996 Disney bonds (defeased and refunded in 2007) that aided Debbie Moreno in determining that Anaheim is OVERPAYING the Disney bonds by about TEN MILLION PER YEAR.  That money is collected from Disney properties in existing taxes, because the 1996 Finance Agreement requires that 100% of the taxes from Disney parks and properties be diverted to the bonds payments, even after the bond payments are met and exceeded.

Bonds, you see, are not like your mortgage (despite Moreno going along with that false premise In Public Hearings); paying them down early does not reduce the interest rate to the extent one would believe. That money instead just sits in a trust account until each annual bond payment is due.  Enough Anaheim money is already in trust to more than cover payments for a significant period — and more is accumulating annually as Disney’s revenues escalate the amount of taxes collected, thus increasing the money diverted to the trust account far beyond our obligations.

Of course the long term obligations workshop presented by Debbie Moreno and Hank Stern on July 21, 2015 was one Council meeting too late to use that information to recapture even part of those surplus funds back into the General Fund for desperately needed neighborhood improvements. (Just imagine how far $10M (and growing) might have aided the long-suffering residents of West Anaheim who have waited DECADES for City Hall to clean up Beach Blvd while special friends of the Council — like Disney — leap frog to the front of the line for favors!)

We lost our chance to negotiate with Disney to recapture that funding without raising taxes on anyone, when the gate tax exemption that should have provided leverage to extract benefits FROM Disney commensurate with the benefits extended TO Disney, was simply and abruptly approved.  This happened without review or renegotiation of the existing and still enforceable Finance Agreement tied to the bond payments that currently siphon off a full ONE FOURTH of our General Fund and will suck down even greater numbers as Star Wars land is opened.

Thanks to Mr. Stern, now we at least know about this overpayment.  He was also able to reassure folks like me who saw the ticking time bomb of balloon payments from the compound interest accruing until the 2037 due date, and share the numbers from the 2007 defeasing and refunding that “smoothed” the payments over time to eliminate the more violent bumps in the road. I have been asking about those balloon payments for years without adequate information, and Mr. Stern was able to get to the bottom of their meaning.

When it comes right down to it, I just plain LIKE Hank Stern, and think he has been doing a good job for Anaheim, scoring us an excellent return on investment of our surplus and idle funds, given the serious limitations on where public agencies may now park their long term funds.

I hope and pray that Stern is truly retiring of his own free will, and off on some grand adventure, and that his leaving was not prompted by the City Manager pulling him aside to explain his position is being absorbed into Debbie Moreno’s department to save money.

Oh BTW — when Finance Director Debbie Moreno made that claim to the Charter Review Committee in 2013/14, there was no documentation to back up the claim of a six-figure savings by combining departments. Obviously the plan was to save that money by no longer paying Hank Stern. I pray that absorbing of functions was by attrition and not by elimination. (We will know one way of the other when we see whether Mr, Stern’s next Big Adventure is with another City or if he really does retire and take up parasailing with his wife.)

Sadly there is nothing on the City Council agenda to indicate our leaders might publicly thank a man who had a great deal to do with our City’s solvency — and who revealed hidden workings that we in the public really needed to understand.  (I also pray that that played no role in his unheralded departure.)  Hank Stern may already have left the building, but if our dearly departed/departing treasurer is present at Tuesday’s Council meeting, I encourage those in attendance to seek him out and thank him for his service. (He is usually sitting in the back of Chambers, in case leaders ask him any questions about our fiscal health — which they almost always don’t.)

Thus you can often find him reading quietly and doing everything possible to remain invisible, an effort we just blew out of the water here at OJB, but if his anonymity denies the public thanks he is due, then it is time for some attention. I am sorry I am not able to attend this meeting myself, as I have a scheduling conflict I can’t work around, but I do want to offer my own gratitude to our City Treasurer, and offer my very genuine wishes for the next step in his Great Adventure to be something that makes him feel alive and happy and glad he was able to leave Anaheim.

ITEM 4:

ANTICIPATED LITIGATION

Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of California Government Code Section 54956: One potential case.

I admit to having initially missed this, due to an obligation resulting in a particularly disagreeable afternoon. Thankfully a friend caught this after a quick search of the Gov Code referenced showed the exposure to litigation cites the Brown Act’s requirements for how government calls and conducts Special Meetings. Again, we don’t get to know what happens in Closed Session, and public officials who disclose anything from Closed Session (other than their belief that an illegal act may have transpired) may be sanctioned for revealing the events behind those closed doors. As our elected leaders ARE the City of Anaheim for the purpose of defending these actions, it would be extremely foolish to reveal any discussion.  If evidence were revealed that litigants were tipped off to a legal issue by one of the elected leaders, it would likely result in serious consequences. Smart leaders don’t talk. However, one can make an educated guess about the nature of the Closed Session subjects based on a narrow set of options regarding this particular posting.

So why WOULD the City Attorney be advising the City Council on the potential exposure to litigation regarding “special meetings?!”

What DOES the Brown Act have to say about Special Meetings and how they are noticed and conducted?

54956. (a) A special meeting may be called at any time by the presiding officer of the legislative body of a local agency, or by a majority of the members of the legislative body, by delivering written notice to each member of the legislative body and to each local newspaper of general circulation and radio or television station requesting notice in writing and posting a notice on the local agency’s Internet Web site, if the local agency has one. The notice shall be delivered personally or by any other means and shall be received at least 24 hours before the time of the meeting as specified in the notice. The call and notice shall specify the time and place of the special meeting and the business to be transacted or discussed. No other business shall be considered at these meetings by the legislative body. The written notice may be dispensed with as to any member who at or prior to the time the meeting convenes files with the clerk or secretary of the legislative body a written waiver of notice. The waiver may be given by telegram. The written notice may also be dispensed with as to any member who is actually present at the meeting at the time it convenes. The call and notice shall be posted at least 24 hours prior to the special meeting in a location that is freely accessible to members of the public.

(b) Notwithstanding any other law, a legislative body shall not call a special meeting regarding the salaries, salary schedules, or compensation paid in the form of fringe benefits, of a local agency executive, as defined in subdivision (d) of Section 3511.1. However, this subdivision does not apply to a local agency calling a special meeting to discuss the local agency’s budget.

(c) For purposes of subdivision (a), the requirement that the agenda be posted on the local agency’s Internet Web site, if the local agency has one, shall only apply to a legislative body that meets either of the following standards:

(1) A legislative body as that term is defined by subdivision (a) of Section 54952.

(2) A legislative body as that term is defined by subdivision (b) of Section 54952, if the members of the legislative body are compensated for their appearance, and if one or more of the members of the legislative body are also members of a legislative body as that term is defined by subdivision (a) of Section 54952.

Now, obviously this “exposure to litigation” would apply to a past action, since one does not plan to expose the body to litigation in advance. And no notice of Special Meeting has taken place since the September 30, 2013 Jordan Brandman sponsored Kabuki Theatre hour, complete with puppet show appropriate for any children watching the bizarrely timed 8 am meeting. If a Special Meeting took place it would have been noticed on an Agenda, and the violation of the law could have happened in the manner which the meeting was conducted. Since no such Special meeting has been noticed after September 30, 2013, it is safe to assume that a gathering of some sort took place outside the public view and was not properly disclosed to the public as required. I will gladly entertain other theories if anyone has them, after all we will never know the truth so we may opine on the presence of flying monkeys at the meeting for the sheer fun of it.

So what form of “special meeting” has taken place and was NOT properly noticed? Who may have discovered such an event, and given the City the impression that litigation may be initiated as a result of their discovery of some unnoticed meeting of the City Council?

Remember, anything that creates “collective concurrence” can be considered a “meeting” for purposes of the Brown Act. The majority of a legislative body need not even meet face-to-face on order to violate the Brown Act, as the State of California has determined even communicating one’s intent through intermediaries such as City staff, lobbyists meeting one by one, written communications such as emails, use of electronic media like a neighborhood email forum in which individual Council members might communicate their intent and permit the “vote this way” agreement to take place without direct communication, and of course there is the public vehicle of print and electronic media, using blogs or reporters to convey a message of majority concurrence. All of those scenarios would be called Serial Meetings, and they are a violation of the law.

Is there an area in which the City Council majority has expressed coming to “collective concurrence” prior to the open and public meeting at which they are to conduct that business?

Well, maybe so.  On July 7, 2015, Art Marroquin at The Orange County Register reported:

http://www.ocregister.com/articles/tait-670502-city-tax.html

“At least three of Tait’s council colleagues – a majority – have said they’re willing to ban a gate tax at Disneyland and Disney California Adventure for another 30 years in exchange for Disney promising to pump at least $1 billion of yet-to-be-disclosed improvements into the theme parks by 2024.”

Is there a difference between a City Manager communicating between Council members that so-and-so is voting to approve or deny, or a reporter carrying that same information to its audience prior to a public vote?

The fact that the collective concurrence is made public prior to the public meeting does not make it acceptable, the purpose of a public meeting is not to watch our leaders finalize decisions they already made in advance of the meeting, the point of a public meeting is to permit the public to weigh in on the issues, and influence their representatives by sharing their views and perhaps even bring a new viewpoint to the discussion. When a majority of our leaders have already made up their minds the meeting at which they memorialize that predetermined outcome is not an open public meeting. It is a violation of the Brown Act.

When did this collective concurrence take place? In other words, when were the views of our City Council formed in advance of the actual July 7^th Council meeting? Well the most logical opportunity to create collective concurrence among the majority of Anaheim’s leaders was probably at the gathering at Disney’s Imagineering HQ in Culver City, where these very issues were discussed, again as reported by Art Marroquin.

While the Council attended an informational meeting with Disney they were split into groups of no more than two, presumably to avoid having a majority of the Council in any one place for this discussion.But as long as the discussion did NOT involve the creation of collective concurrence, as long as it was merely informational and NOT related to business about to come before the Council to which the public is entitled to receive the same information the Council receives, there was not reason to divide the leaders. The Brown Act permits officials to participate in events as a group, when they are social, or workshops to inform, etc. The fact that Disney split up the leaders is the indication that the discussion may have included enough basis for becoming a “meeting” for purposes of the Brown Act.  Thus Disney would not want anyone making the claim the majority were present at a “meeting” that could undermine the gate tax exemption that Disney wanted very, very badly should the agreements be challenged in court for the Brown Act violation.

Did attendance at the Culver City gatherings constitute a “Special Meeting” under State law, which was clearly not made public as required? Again, we don’t have any way of knowing unless someone spills the beans, and I don’t see Tait or Vanderbilt doing that, while Kring, Brandman, and Murray would be tying their own nooses to speak on a violation related to their affirmative vote for Disney.

If the Special Meeting at Disney turns out to be a Special Meeting for purposes of the Brown Act, there is another problem. The Council must conduct all meetings within their jurisdiction. The only provision for attending a “meeting” outside of Anaheim is when visiting legal counsel in another city lowers the City’s payment of travel costs to the attorney.

Creating collective concurrence at a meeting that was as NOT open and public as possible, and outside the boundaries of the City limits, for a highly contentious deal that made international news? Nope, nothing to see here.

Why would the City suddenly become alarmed when the vote was completed in July? In fact, the meeting took place more than 90 days ago, thus no challenge could void the contracts even if a Brown Act challenge could be won in court. (And boy do I get the feeling I have heard THAT argument before!)

BTW, the July 7 Register report on the Disney deal pointed out an issue with the Mayor’s schedule but really missed the logistical import of it. The post-Independence Day meeting may well have been deliberately timed (just as we now know and can prove the Angels Stadium agreements were rushed through to be on the first Post labor Day meeting Anaheim had held in over a dozen years.)

The Council majority knew in advance that A) The Mayor had a full weekend of workload directly related to his official position as the Mayor of Anaheim. not only welcoming the Dalai Lama but playing host for the entire weekend. If information offered in the staff reports and economic reports that supported staff findings, Tait lacked the time to review those documents over the busy weekend, when the reports are only made available the Friday prior to the meeting, in this case just as the Dalai Lama arrived. (In the case of the Angels agreements the CS and L report was only offered to Tait the morning of the September 3 meeting itself, with the knowledge that he routinely schedules back to back meetings at City Hall on Council meeting Tuesdays to maximize his time away from his own professional office and his family.) We see a consistent, and what appears to be a deliberate, pattern to keep the Mayor off his feet with the aid of staff who ultimately benefit from the decisions made under curious circumstances.

But in the case of the post Independence Day Disney gate tax meeting, those trying to undermine Tait’s policy positions also knew that the Mayor’s policy aide was prevented from helping him by reviewing the staff reports released on the Friday agenda. When the Council majority cut the Mayor’s budget, it left a funding gap at the end of every fiscal year, and Mishal Montgomery was known to be out of the office until AFTER the Independence Day meeting!

Did the City Council majority and/or executive team staff schedule the Disney agreements for the one time frame they knew with absolutely certainty the Mayor, who was successful in rousing the troops to arms before the Stadium agreements, would be left without staff, and swamped with official duties all weekend? We will know only if someone talks, and short of a court ordered Deposition that is unlikely to happen. Which brings us back to the Significant Exposure to Litigation regarding Special Meetings.

Not long ago, the City’s response to a CPRA request by me (hold your shock and surprise) offered the ONLY respondent records regarding the Disney negotiations, and they were calendar pages for 4 of 5 leaders for their scheduled meetings to Disney Imagineering. That was it. Calendar pages. No copy of Disney’s invitation to the Council members, no agendas for the meeting, notes, or minutes.  Apparently the City of Anaheim has become astonishingly GOOD at conducting the entirety of contentious agenda items by phone or personal communication devices so as to leave no trace of a public record. This is how our “world class City” is being run, with wink and a handshake deals conducted in the back booth of Bubba’s BBQ out on the highway crossroads like some urban form of Deliverance.

Did the Register’s report of collective concurrence prior to the July 7 meeting, combined with the admission that at least 4 of 5 city leaders attended the meetings at Disney (Jordan Brandman being the only official to not turn over a calendar page), trigger enough fear at City Hall that the City Attorney is explaining how he plans to slip his clients out of the trap they built for themselves? Or is there yet ANOTHER issue that Anaheim decided in a back room and failed to disclose as a proper “Special Meeting?”

If any activist types are preparing to file litigation or conducting their own investigation of Special Meetings, I would love to hear from you, and will gladly turn over any records that may help others get to the truth. Too many of Anaheim’s community groups are splintered, becoming so territorial and adversarial that we are allowing our differences get in the way of working toward the one goal we ALL share in common, a better Anaheim that lets the Grande Dame of Orange County be the best Anaheim she can be.

It is certainly convenient that Anaheim’s outside counsel, Rutan and Tucker, are likely to be in attendance at Tuesday’s Closed Session discussion. One can almost hear them now, explaining that no such Brown Act violation took place, and any potential litigation would be frivolous and without merit, something that relates to Agenda Item 1 as well. But for the sake of argument, let’s throw this event out there for public discussion and see what our readers think. (By the way, neither I nor CATER have initiated litigation in this matter.)

See the bottom of this post for the relevant sections of the Brown Act if you want to read for yourself.

Continuing the Closed Session countdown….

3. CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION

(Subdivision (d)(1) of Section 54956.9 of the California Government Code)

Name of Case: DeSouza v. City of Anaheim, Orange County Superior Court Case No. 30-2015- 00771217

2. CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION

(Subdivision (d)(1) of Section 54956.9 of the California Government Code)

Name of Case: Acevedo, et al. v. City of Anaheim et al., USDC Court Case No. SACV14-01147 ODW (Ex)

This appears to be the case against Anaheim for the shooting death of Joel Acevedo in July 2012.  (Any hurtful comments regarding that loss of life will be deleted without apology, so don’t bother. Mr. Acevedo is not here to defend himself, and anything said with the intent of emotionally harming his grieving mother just proves you to be an asshole, which will not be tolerated on my posts. You are entitled to your opinions on a wide range of issues around here, from politics, to transgendered domesticated pets, but you do not get to abuse women who have lost a child simply because they have lost a child, Go pull the wings off butterflies or evict orphans from foster homes if you need that kind of thrill.)

That wraps up our Closed Session review. Again, we’re leaving of the ONE REMAINING item, for another post at another moment, as it deserves its own column here.

Coming in at Number One!

1. CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION

(Subdivision (d)(1) of Section 54956.9 of the California Government Code)

Name of Case: Coalition of Anaheim Taxpayers for Economic Responsibility v. City of Anaheim, Orange County Superior Court Case No. 30-2013-00695342

Stay tuned!  Meanwhile, here’s a heapin’ helpin’ of Brown Act.

54952.2. (a) As used in this chapter, “meeting” means any congregation of a majority of the members of a legislative body at the same time and location, including teleconference location as permitted by Section 54953, to hear, discuss, deliberate, or take action on any item that is within the subject matter jurisdiction of the legislative body. (b) (1) A majority of the members of a legislative body shall not, outside a meeting authorized by this chapter, use a series of communications of any kind, directly or through intermediaries, to discuss, deliberate, or take action on any item of business that is within the subject matter jurisdiction of the legislative body. (2) Paragraph (1) shall not be construed as preventing an employee or official of a local agency, from engaging in separate conversations or communications outside of a meeting authorized by this chapter with members of a legislative body in order to answer questions or provide information regarding a matter that is within the subject matter jurisdiction of the local agency, if that person does not communicate to members of the legislative body the comments or position of any other member or members of the legislative body.

(c) Nothing in this section shall impose the requirements of this chapter upon any of the following: (1) Individual contacts or conversations between a member of a legislative body and any other person that do not violate subdivision (b). (2) The attendance of a majority of the members of a legislative body at a conference or similar gathering open to the public that involves a discussion of issues of general interest to the public or to public agencies of the type represented by the legislative body, provided that a majority of the members do not discuss among themselves, other than as part of the scheduled program, business of a specified nature that is within the subject matter jurisdiction of the local agency. Nothing in this paragraph is intended to allow members of the public free admission to a conference or similar gathering at which the organizers have required other participants or registrants to pay fees or charges as a condition of attendance. (3) The attendance of a majority of the members of a legislative body at an open and publicized meeting organized to address a topic of local community concern by a person or organization other than the local agency, provided that a majority of the members do not discuss among themselves, other than as part of the scheduled program, business of a specific nature that is within the subject matter jurisdiction of the legislative body of the local agency. (4) The attendance of a majority of the members of a legislative body at an open and noticed meeting of another body of the local agency, or at an open and noticed meeting of a legislative body of another local agency, provided that a majority of the members do not discuss among themselves, other than as part of the scheduled meeting, business of a specific nature that is within the subject matter jurisdiction of the legislative body of the local agency. (5) The attendance of a majority of the members of a legislative body at a purely social or ceremonial occasion, provided that a majority of the members do not discuss among themselves business of a specific nature that is within the subject matter jurisdiction of the legislative body of the local agency. (6) The attendance of a majority of the members of a legislative body at an open and noticed meeting of a standing committee of that body, provided that the members of the legislative body who are not members of the standing committee attend only as observers.