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SB Bankruptcy Plan Talks Called “Intractable”

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Councilman Rikke Van Johnson urges outside financial help

Chris Levister

SAN BERNARDINO - As the public battle rages over fixing a $45.8 million budget deficit members of the San Bernardino City Council remained mired in acrimony on Wednesday raising the risk of deepening default, unnecessary layoffs and has some members asking the pivotal question: “Are we up to the task of adopting a plan acceptable to the bankruptcy court?”

“No”. That’s Sixth Ward Councilman Rikke Van Johnson. “We’re essentially in a state of paralysis.”

Johnson says the council’s lack of fundamental financial expertise compounded by the bickering, blaming and sniping between the council, mayor and city attorney has set off unprecedented partisanship and intensified accusations from warring factions on the council.”

He said negotiations on a “pendency” plan have become intractable. The pendency is a day-to-day budget designed to guide the council until the court approves a long-term plan to restructure the city's debt.

Under Chapter 9, bankruptcy rules courts lack authority to interfere with a city's "property or revenues" or its "political or governmental powers."

“The time has come to get some outside help,” said Johnson. “How are we going to come up with an actual pendency plan if we’re still deeply mired in acrimony over the Fire Department budget?”

The council’s lack of knowledge governing the Chapter 9 bankruptcy process reared its head last week when Councilman Robert Jenkins asked when the plan will go to the court.

“It won’t,” said City Attorney Jim Penman.

“You could see jaws drop” said Johnson. The city must give the court a balanced budget first. That means a lot more cuts.

Last month the council voted for bankruptcy to deal with the budget gap, and the city’s inability to make payroll for its employees. The local insolvency is attributed to loss of revenue from foreclosures, lost redevelopment dollars as part of the state mandate last year, and the police and fire departments’ salary and pension impact on the General Fund. Public safety including police, fire and code enforcement accounts for 75 percent of the city’s budget.

The pendency plan the council approved September 5 called for $22.4 million in cuts and another $9.4 million in labor negotiations. The council made several modifications to the plan which included delaying a recommended $3.5 million cut to the Fire Department. 89 employees have left voluntarily since July 10 when the city announced that it intended to file Chapter 9 bankruptcy. The cuts if fully implemented would leave a $7.1 million general fund deficit.

Much of the bickering has focused on union contracts. The biggest clash is over the interim fire chief’s plan for rotating closures of the three least-busy fire stations. Some council members have been adamant that stations in their wards not close. “There are some members of this body who have been brought by the unions. Now they’re cashing in their chips,” he said. This accusation was also made by Mayor Patrick Morris and other members of the council. Johnson points to campaign contributions by the San Bernardino Professional Firefighters and San Bernardino Police Officers Association.

“I think the fire union in particular has told elected officials who depend on union contributions for their election that they are unwilling to take any budget reduction or rank and file layoffs.”

Council members have also butted heads over a waste-disposal deal vetoed by the Mayor in August. The proposal has been discussed and rejected several times.

Johnson was incredulous that reasonable compromise proposals put forth have been patently rejected by “these elected members” despite recommendations from city staff including Finance Director Jason Simpson.

“We can’t expect to agree on a governing plan when we’ve got elected members who can’t distant themselves from the lure of union dollars,” said Johnson.

“I’m not optimist that we as elected leaders are capable of making the tough decisions to show the court we can fix this city. So far we’ve failed miserably.”

Southland Campaigning

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Last Saturday Congressman James Clyburn (D - SC) was in Riverside in support of Mark Takano, candidate for the newly drawn Congressional District 41. Several community activists were in attendance including Waudier (Woodie) Rucker-Hughes, President of the Riverside NAACP, (who introduced Takano) and DNC Delegate Linnie Frank Bailey. Says Bailey, "We were excited to have an appearance by a Representative of Congressman Clyburn's status! He spoke of the need to retake the House and the importance of the November election." Clyburn in the number three ranking Democrat in the House leadership. Pictured (l-r) Mark Takano, Nancy Takano and Congressman James Clyburn.

Million Father March Event a Huge Success

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By John Coleman

More than 100 men, women, and children recently participated in the Million Fathers March organized by Street Positive CEO, Terry Boykins. Photos by John Coleman

#670            "Let me hear you?" Terry Boykins asked the group to repeat the theme of the Million Fathers March "I Am My Child’s Superhero!"

#686            The march began at Cross Word Christian Church, Riverside who also hosted the event.  Bishop, Larry Sykes, Pastor praying for a blessed event, the participants, and the purpose for which the million fathers march was being held across the country: strengthening the roles of fathers in the families and in the lives of their children.

 #696           With military fathers in the front, the marchers lined up.

#697             The march begins.

#701             Participating family

#702             Participating family

#713             Registering voters, members of Riverside’s earliest African American families: Tina Caroline and her mother Gay Caroline, with Riverside Branch NAACP President, Waudier “Woodie” Rucker-Hughes.

#716             Marchers returned after covering the 2-1/2 mile route.
       
#725             Dr. D.C. Nosakhere Thomas along with his son Kamaal Thomas, performed as co-masters of ceremonies for the program based on the theme: "I Am My Child's Superhero".

#740             Dr. Thomas and son presented Bishop Larry Sykes and Karen Sykes a Proclamation from the City of Moreno Valley and a Resolution from the Riverside County Board of Supervisors.

#743             Poet, Richard O Jones read his poem:  "Letter to My Son".
               
#758             Keynote Speaker,  Keith 'Sarge' Gibbs.
 
#750             Father and sons listen during the program.

#755             Mayor of Moreno Valley offered brief remarks.

#759             The panel addressed issues involving stronger father roles and relationships in raising strong, healthy children

REDEVELOPMENT MAY NOT BE DEAD AFTER ALL

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Legislators pass bills that would revive anti-blight program

Chris Levister

A legislative compromise that would expand cities’ and counties’ ability to divert property taxes for local development projects may be too late for bankrupt San Bernardino but there is new hope for the state’s 60-year old redevelopment agency program intended to combat blight.

Four bills made it to the final sprint of the state legislative session, which ended August 31. The four bills would revamp the funding mechanism that allows cities and counties to divert property tax revenues from local agencies if an area is designated for development. Unlike the redevelopment law, however, none of the property tax diversions could come from the taxes that fund schools, a crucial difference from how redevelopment agencies were financed. Voters approved a proposition requiring minimum funding for education in 1988, which required the state to make up the difference for some of the money reallocated from schools to redevelopment agencies. That cut into the state general fund and was a major reason Gov. Jerry Brown and the Legislature pushed to end the program.

SB1156, by Senate Pro Tem Darrel Steinberg, D-Sacramento, would create new entities called Sustainable Communities Investment Authorities. Although similar to redevelopment agencies, they would allow counties and other agencies to withhold their property tax contributions if they don't support the development project. The previous model of redevelopment often pitted cities and counties against each other because it allowed cities to capture counties’ tax money.

The three other bills modify a little-used development tool known as infrastructure financing districts, which, like the former redevelopment agencies, use property tax revenue increases to fund projects. The bills would reduce the voter approval requirements for establishing a project area and issuing new bonds. Existing law requires cities and counties to get two-thirds of voters to approve a new project area before they can divert property taxes to fund it and take on debt. Brown and the Legislature threw hundreds of agencies out of business last year, saying that the property tax money flowing to their operations would be better spent to help close the state's budget deficit. The agencies fought the decree in court and lost in the state Supreme Court. The court traced the growth of redevelopment agencies in California back to Proposition 13, the 1978 initiative that slashed property taxes and limited governments' ability to raise new revenues. "Proposition 13 created a kind of shell game among local government agencies for property tax funds,'" Justice Kathryn Mickle Werdegar, wrote, quoting a planning guide.

"'The only way to obtain more funds was to take them from another agency. Redevelopment proved to be one of the most powerful mechanisms for gaining an advantage in the shell game.'" When Brown pulled the plug in February, $5 billion was being sent annually to 400 redevelopment agencies throughout California.

Since then, the Legislature has considered several proposals to mitigate the fallout as cities and counties struggle to wind down the agencies and fight to maintain control over tax dollars. So-called "successor agencies" -- usually city governments -- are now shifting assets into other public coffers, as local oversight boards and state officials keep an eye on their decisions. However, squabbles have broken out in several communities over who should administer the funds or who should sit on the oversight boards.

Some cities used a greater share of the money for administrative costs, paid for police, fire or other city employees, and some loaned the state money to their redevelopment agencies at above-market interest rates.

The loss of redevelopment funds cost struggling San Bernardino $30 million annually and put the spotlight on how redevelopment money was used. San Bernardino was using about $6 million of those funds to back fill its general fund.

"It was never intended to be a source of permanent revenue for cities," said Assemblyman Chris Norby, R-Fullerton.

In San Bernardino, where small businesses and empty storefronts dot the downtown, redevelopment funds paid the salaries of the city manager, code enforcement officers, human resources staff, the city clerk and the city attorney. They also paid for the operation of the city's public access television, its 5,000-seat minor league baseball stadium, and a renovated historic theater.

“Morris defended the city’s use of the funds for salaries and renovation projects saying the projects stimulated economic growth. He said, without that money, things only got worse. 
"One might say it was the nail on the coffin in terms of our unbalanced budget of losing redevelopment funds.

Redevelopment agencies were created in California in the 1940s as a way to provide more affordable housing and reverse urban blight. To encourage projects, the state dedicated a funding stream for the agencies and attached few restrictions to the money.

"Cities depended on redevelopment to make additional dollars in property and sales taxes down the road, and they were spending down their reserves in the meantime," said Chris McKenzie, executive director of the League of California Cities. 

Because there were no hard rules on how cities could spend redevelopment money — except that it had to somehow address or eradicate urban blight and 20 percent of it had to focus on affordable housing — cities interpreted the program liberally, said Marianne O' Malley, an analyst at the Legislative Analyst's Office.

UCR Franklin Fellow Gets Rousing Welcome in Washington

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Only tenured Black business professor in the UC system saw a sabbatical rescinded

In July when University of California Riverside professor, Dr. Waymond Rodgers stepped into the U.S. State Department’s Washington offices marking the long awaited start of his Franklin Fellowship, there were cheers, applause, high-fives and hugs. For Rodgers, the moment was the high mark of an emotional ride that began more than two years ago when he won the coveted honor.

The welcome was in sharp contrast to the cold shoulder send off he received from UCR in June, months after reaching an accord in a contentious disciplinary scuffle with the university. Rodgers, an accounting professor at the UCR School of Business Administration, is the only tenured African-American business professor in the UC system and according to the State Department website the acclaimed scholar is the first Franklin Fellow from a California school. The State Department sponsors the fellowship, which encourages work between academia, business and government.

It was Rodgers' world class research at UCR and his international reputation on matters of corporate social responsibility, and ethical decision making principles that caught the eye of the U.S. State Department which awarded him the prestigious Franklin Fellowship in August, 2010.

In the spring of 2011 without explanation UCR abruptly revoked Rodgers’ approved sabbatical prohibiting him from taking the fellowship which holds national and international benefits for the recipient and sponsoring organization. Nine months later University of California lawyers launched hearings on charges that Rodgers was inadequate in the classroom (based largely on student evaluations) and performed unauthorized work outside the university. The allegations put Rodgers’ 20-year often tumultuous career at UCR on hold and threatened to derail his fellowship. Things changed rapidly after the case touched off a firestorm in the region’s African American community. The Riverside Clergy Association called the charges against Rodgers’, who won a discrimination lawsuit against the university in 1998, “retaliatory” and “racially-mot ivated”. The group formed a united front in support of Rodgers, intent on sending a strong message to the University of California system and all systems that injustice is intolerable. In mid December, 2011, the university dropped its investigation of Rodgers and restored his rescinded sabbatical, allowing him to take the Franklin Fellowship. Rodgers was at the center of a tenure and compensation battle when he came to UCR in 1992. A year later he sued the UC System for race discrimination in federal court. The UCR School of Business Administration has seen its share of conflict. In August 2011 David W. Stewart abruptly stepped down as dean of the school, at least in part because of infighting within the faculty. State Department officials watched the fray from the sidelines, calling UCR’s action’s “surprising” and “unprecedented” at the Franklin Fellowship Program. August, 2010, State Department Senior Advisor for Fellows, Joanne M. Martin, Franklin Fellows Program wrote: "Dr. Rodgers' leadership and expertise are essential to getting an important initiative off the ground. We look forward to him joining Secretary of State Hillary Clinton's team."

The university maintained its move allowing Rodgers a sabbatical had nothing to do with government or public pressure. Citing personnel confidentiality, Rodgers and UCR officials declined to discuss the case.

Clergy members said that while their group doesn’t specifically seek out causes to rally behind, they took up Dr. Rodgers’ case because it was a blatant example of injustice that couldn’t be ignored. Rodgers, a certified public accountant has written five textbooks including his new book Ethical Beginnings: Preferences, Rules, and Principles Influencing Decision Making. He has published numerous papers in scholarly journals, lectured extensively worldwide and is known for his cutting- edge research in ethics, trust issues, intellectual capital, and knowledge management.

“This is a great loss for UCR the entire UC system and the Riverside community,” said Silvia Martin- James chairperson of the Dr. Barnett and Eleanor Jean Grier Concerned Citizens of UCR. “In this period of global uncertainty, the need for ethics in society is such an important factor. The rare opportunity to partner with the State Department on such issues of vital importance to the Uni ted States has been squandered,” said Martin-James.

“Someone once said by ‘perseverance the snail reached the Ark’,” said Riverside Clergy Association president Rev. Paul Munford, recalling Rodger’s obstructed road to Washington.

“This case raises serious questions about UCR’s commitment to justice and equal opportunity,” said UCR Librarian Ruth Jackson. “We’ve not only missed a high profile opportunity to walk the talk on diversity, but it sends the wrong message to prospective corporate and academic partners and undermines our ability to attract research grants and monies for other noteworthy faculty and students,” said Jackson Uncustomary to UCR’s policy of publically announcing distinguished faculty, staff and student achievements, the university to date has made no announcement of the Franklin Fellowship awarded to Dr. Rodgers.

Ironically in July the UCR School of Business Administration issued a media release announcing the hiring of five faculty members who will start this fall. (None of whom are African American). “We are thrilled to welcome a high caliber group of faculty members to the UCR business school family,” said Yunzeng Wang, interim dean of the business school. “These five individuals come with impressive backgrounds and bring great promise. I am excited about the impact that their teaching and research contributions will undoubtedly make.”

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