Opinion: Raiding S. Tahoe’s general fund was criminal
Publisher’s note: This letter was sent by the author to South Lake Tahoe’s city attorney and is reprinted with permission.
To South Lake Tahoe City Attorney Patrick Enright,
As our city attorney, it is my duty to inform you that it appears serious crimes have taken place and no effort has been made to solve these crimes, or even acknowledge they took place.
Steve Kubby
Here are the relevant facts:
1. Sometime around 2002 someone stole $7,007,000 from the general fund, without the knowledge or consent of the City Council.
2. Those funds were deposited to the Redevelopment Agency, again without the knowledge or consent of the City Council.
3. The purpose of this theft was to cover the financial failures of the RDA and the Park Avenue development.
4. The public was kept in the dark about this serious matter, while the City Council conspired to cover up the theft with a fraudulent “loan” agreement to pay back the stolen funds with TOT revenue, which was already due to the city anyway.
5. Not one penny of the $7,007,000 stolen funds has actually been repaid.
6. No investigation or effort has been expended to find out how this theft occurred, to report this crime to the authorities, or to disclose this crime to the people of South Lake Tahoe.
7. Redevelopment has been deliberately and criminally misrepresented to the public and those responsible for this economic debacle continue to hold decision making positions on the City Council and the RDA.
8. The recommendations of the El Dorado County Grand Jury have been virtually ignored.
9. There is a pattern and practice of stealing funds from road repairs and maintenance, in order to prop up the RDA, that has resulted in an unfunded liability of somewhere between 150 to 250 million dollars, just to get our roads back up to par.
10. An honest accounting of the city will show that it is hundreds of millions of dollars in debt. Currently, the city does not calculate huge, escalating, unfunded liabilities which include: road maintenance and repairs, retirements, health benefits, and unresolved litigation over past RDA mistakes.
11. The official policy of the city is to praise redevelopment and ignore past failures and criminal efforts to cover up those failures. The city attorney and city manager can no longer ignore the theft of $7,007,000 from the General Fund, nor can anyone continue to argue that the loan agreement of March 16, 2004 is legal or anything other than a fraudulent attempt to cover up a crime by agreeing to pay back a loan with money that was already due to the general fund.
12. The city of South Lake Tahoe could face astronomical lawsuits for its past redevelopment sins, because its claim of blight, can be shown to be bogus. That is exactly what is happening now in the case of National City, a suburb of San Diego, where the City Council wanted to seize their property under eminent domain to facilitate construction of a 24-story condominium building. To make the seizure legal, the city declared the property to be blighted and needing to be cleared for new construction.
As reported by Dan Walters for the Sacramento Bee, “taking property in that way was given broad clearance by the U.S. Supreme Court in its now-famous – or infamous – Kelo decision having to do with a similar case in Connecticut. But to exercise that power, National City still had to meet the state’s requirement that it prove blight.”
One property owner, the Community Youth Athletic Center, resisted and challenged the city’s blight designation. The center, which gives boxing lessons to underprivileged youth, received support from groups opposed to the broad exercise of eminent domain. And San Diego Superior Court Judge Steven Denton sided with the gymnasium as well.
Last month, Denton issued a 50-page ruling that found National City’s claim of blight to be bogus. “Because most or all of the conditions cited as showing dilapidation or deterioration are minor maintenance issues, the court cannot determine with reasonable certainty the existence or extent of buildings rendered unsafe to dilapidation or deterioration,” he wrote.
Dana Berliner, a lawyer for the Virginia-based Institute for Justice, an anti-eminent domain organization that backed the Community Youth Athletic Center, put it this way: “Their blight designation was a total sham.”
Denton’s decision, if it survives, is important because it indirectly upholds state redevelopment reform laws that have tightened up the definition of “blight” and compelled local redevelopment agencies to prove its existence to continue their activities.
Redevelopment agencies have chafed at those reforms, fearing that they won’t be able to comply as they seek to renew redevelopment projects facing expiration. And that’s become an issue in the legislative wrangle over Brown’s proposal.
The governor wants the property tax money that redevelopment agencies skim off the top of the local tax pool. The redevelopment industry has offered, in effect, to give the state some money if the state will ease the blight requirements on project extensions. But Brown’s not biting, at least so far.
The National City decision offers a cogent example of why redevelopment should either be abolished, as Brown proposes, or redirected toward cleaning up real blight, not the imaginary kind.
The City Council has forced nearly 50 businesses to close, based upon questionable claims of blight. If those claims can be successfully challenged in court, the city, our businesses, our homeowners and our residents will all find ourselves in a world of hurt and economic ruin. Perpetuating this cover up of the theft of $7,007,000 will only make our day of reckoning more painful. This is a serious matter that demands serious attention.
I will look forward to your response and plan for addressing the theft and the coverup.
Here are the relevant, smoking gun, document.
Respectfully submitted,
Steve Kubby, South Lake Tahoe
Get ’em Kubby!
Let’s see the names of those involved in the theft. You lost focus when you headed down to San Diego Kub. You have a right to file suit as well as anyone. Why talk about it here. Just do it!
Steve, have you ever asked those 50 property owners if they feel they were unjustly and unfairly treated? Most of those I know of were happy to part with their property and failed to maintain them for a few years leading up to the check they received.
McDonalds, Fantasy Inn, Chevron all got brand new properties out of it. Renters in old apartments got checks to move elsewhere. Cecil’s got a new spot.
I appreciate the fact that you’re asking Enright to look into this, but when you start talking about National City and how we’d face lawsuits, I’m not sure where this would head.
The outstanding Union 76 station and others were forced out of business, against their will, by the city redevelopment scheme. City taxpayers are now left with a useless and ugly hole in the ground, surrounded by an unsightly chain link fence and concrete barriers, right under the sign that says “Welcome to California”. Over $800,000 in public funds was wasted and could have clearly been spent better elsewhere when paid by the redevelopment agency to the owner of a pizza parlor also forced out of business.
Incredibly, no performance bond or irrevocable funding commitment were required before bulldozers were brought in. Those responsible for this outrageous debacle should be held fully accountable for their poor decisions and naivety.
Many valid points have been made here… No doubt. I just don’t feel we are looking at a conspiracy, that’s the thing. In article number 4, Steve has used the words “conspired to cover up”. I don’t feel at ease claiming conspiracy, I don’t like what the council have done, I don’t like how the people we have sitting at our local council lack honest to goodness qualifications to do the job. I know these people, they are not conspiring to do anything. I think they are a bit self centered and focused on their own agendas, I think they need to be guided by a governing body, such as the recomendations made by the El Dorado county Grand Jury… I don’t put it past these people to get together and discuss ways to buffer the mess they made,(most of them made). I don’t put it past them to exclude certain information given to the public. I just can’t see them sitting around, conspiring to do us harm, they do plenty of harm without organizing to do so. I would bet that if lawsuits were filed, several underhanded details would be discovered, I can’t see it leading to anything, perhaps it might even end up costing the city more money. I think the crimes our City Council are guilty of are mostly not intentional, but just plain stupidity and ignorance on how to deal with that stupidity. The only way I could see a lawsuit doing any good is if,(Steve), you feel that a lawsuit is an integral component to an overall planned process to which the goal is the prevention of such grand mistakes from happening in the future. The bottom line is just that, we need to prevent this type of thing from happening again. And if a lawsuit is going to help that effort, then have at it. Are you going to wait around for a response from Enright, or are you going to go with your evidence and get the ball rolling. If you have undisputable proof of conspiracy, then get down to the courts and get it started. Conspiracy to do harm to an incorporated city is a serious charge and should not be bandied about carlessly. I am neither for or against your statements, I agree with much of it, but I don’t agree with the allegations being made, rather say they were just plain stupid instead of conspiracies and intentional theft.
The most interesting part for me here is whether Mr. Enright or Mr. O’Rourke respond at all to this, as not much has changed in the City-communicating-with-their-citizenry category, which had the lowest (+/- 20%) rating of the things asked when Mr. Jinkins was aboard and conducted that survey.
The timing of the “change” in City council, a new City manager, and a relatively new City attorney, may conspire to emphasize a sense of ‘righting the ship”, but when things like this are left to fester, absent the purifier of “sunlight”, they probably won’t go away.
The “new” members of Council are seemingly being assured of a new course, which will not be able to measure up until some answers are forthcoming, which is still hard for folks to do in this place.
So, the question is “Will Mr. Kubby simply be thought of as a pariah, or will these questions elicit response on grown-up levels ?”
Nothing else has. . .
I was someone that was at ground zero, at the Hodges ski run BK in 89, Park Ave in 2000, and the new hole at stateline thats in BK. The attorney, lou feldman represented all three. He was smarter than staff. He drafted the mou’s, contracts ect. staff went along and the council rubber stamped them, except Bill Crawford. More than one had conflicts but voted anyway.
No other community in the basin used redevelopment and they all are doing better than So. Lake Tahoe in more ways than one.
“No other community in the basin used redevelopment and they all are doing better than So. Lake Tahoe in more ways than one.”
So true and so sad. Go to Truckee and see how it should be.
Time to stop looking back…..move forward.
Eminent Domain, whether one thinks it’s right or wrong, has been ruled legal. We did though lose some good businesses that I’m sure has cost our City some money. And I don’t believe the Union 76 wanted to go, but I know some others were quite happy to get their check and bail.
But with the 7 mil., the questions of who authorized it and whether it actually is being repaid, has never been clearly answered! Maybe that’s what the former City Atty., Mittlestadt, was raising questions about? And maybe that’s why the former Council worked so hard to keep her quiet?
But you know what the biggest problem is and has been? When the City made it so hard to do business in this town, through raising taxes and fees in this town, as it was doing nothing to help the private sector thrive!!, the City and Council would always retort, “Oh, but we’re doing redevelopment!” That the only thing the previous Council could do was to basically make the whole town a redevelopment zone showed how clueless they were!!
Redevelopment, if done correctly, can be a nice little add on to a community. But in the City of SLT it became the sole focus of what could be defined as progress! And thus a way, or an attempt, to take the light off so many other failings! Maybe that’s why someone was willing to divert 7mil. to keep it going?
Roni- I feel to properly move forward one must always look back. If certain questions are left unanswered and are not addressed, the wrongs that have occurred will only happen again and again.
Roni, If you don’t know the past, how can you plan for the future?
Steve Kubby, you should check the first oldie but goody !. The $1 million city loan to the Von Kluges redevelopment.
No body recalls the name of the person and or persons that approved that loan.
Ted Long may have that answer, as i recall Judge Suz appointed Ted foreman of that Grand jury. Hard to believe a complaint was not filed.
We always need to look back at past mistakes, we have to learn from those mistakes, it’s the only positive thing people can take from past failures… building blocks if you will, the building blocks you need to begin moving forward.
While Ted Long was a member of the El Dorado County Grand Jury for the year 2003-2004, he was not the foreperson of that body, nor was he appointed by Judge Kingsbury. Mr. Long was appointed by James R. Wagoner, who was the supervising judge of the Grand Jury for that year’s session. If any community member wishes to complain about the activities of local government, an action request can be submitted to the current Grand Jury by going to their website at http://www.co.el-dorado.ca.us/GrandJury.