December 2015 – VOL 5, 12
YOUR COMMUNITY WATCHDOG
Community Common Sense
In this Issue... San Juan Capistrano Commission Explores More Public Access to Eastern Open Space Page 1 Guest Column Page 3 Rumors vs. Reality Page 5
Mission Viejo Pinhole Leaks Epidemic Page 1 Letter to Editor Page 6 Council Took Action in 2015 Page 7
San Juan Capistrano
Commission to Explore More Public Access to Eastern Open Space By Kim Lefner After six years and numerous requests to open up the publicly owned but privately controlled “Riding Park” property to the general public, the issue will finally be discussed by the City Parks and Recreation Commission at their meeting on December 21.
$30 million bond to purchase open space in town, and property taxes were increased to pay for the purchase. What City leaders did next was inexplicable. They allowed three private citizens to negotiate behind closed doors the purchase of property outside the City (in violation of the bond), from the Rancho Mission Viejo Company
Background The problem began in 2008, when City leaders “sold” voters on the concept of taxing themselves to buy open space in the City of San Juan Capistrano. In 2009, San Juan voters approved a
Mission Viejo During research on all of Mission Viejo building permits issued two years ago, I discovered that 126 homeowners pulled permits to re-pipe their homes. That number does not include those owners who did the repairs without getting that documentation. All of these owners experienced slab or internal pinhole leaks. It was not that long ago that a resident of the Ladera Ranch community spoke
(“the Ranch”). Nearly half of the property was already protected open space. Open Space Restricted The biggest bone of contention is that the most valuable and usable portion of the 132-acre “open space” property, the approximate 70-acre “Riding Park”, is leased to a private, for-profit equestrian events promoter. The company, Blenheim
Pinhole Leaks Epidemic By Larry Gilbert under Public Comment at a Mission Viejo City Council meeting, pointing out that many of the homes in his community had the same experience. They did not have this problem until after their new home warranties had expired. He hoped to start a Class Action lawsuit. I've not heard anything further from him or our city government. This past week, the topic of massive unexplained pipe leaks in South County was discussed at one of the weekly meetings I attend.
In looking into the pros and cons of re-piping or adding epoxy, I came across the following text in at www.leakbust.com. "If you have copper piping in your home, know that these pipes are under attack from the inside. According to leading studies of copper pipe corrosion and pinhole leaks, copper pipes in our area are failing due to a chemical reaction from chloramine, a new additive in the last 14 years that is eating away at copper pipes. This new treatment method, also called ‘OZONE’ is causing a system that used
Community Common Sense
Equisports, uses the publicly owned property to generate substantial revenue from equestrian events. As a result, the public is only “granted” access to the property they own six days per year. One potentially serious problem for the City is the fact that a “Public Purpose Bond” was used to purchase the open space. Because it is tax-exempt, it has restrictions on the amount of revenue that can be generated on the property Story continued on page 4... to last 30 to 40 years, to now some areas in Orange County failing within just 5 years of new. It is these newest areas in OC and similar areas in the country that are failing the fastest." At this point, homeowners can address the problems by either using epoxy pipe restoration or undertake a re-pipe of the home. I have had to make that choice, and in soliciting estimates, I've discovered that the costs are very close. One difference is that with re-piping, the plumber will need to cut holes in the sheet rock walls to access the existing lines. We've used PEX ("crossStory continued on page 6...
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San Juan Capistrano
Guest Column
No Victory for Ranch Owners on Vermuelen Case “There are no winners and losers here.”
- Judge Dunning
By Mayor Pro Tem Kerry Ferguson The OC Register has written some whoppers over the years, but the article in last Thursday’s Capistrano Valley News entitled “Ranch SJC Mayor Pro-tem Owners CorKerry Ferguson. ral Victory” leads me to conclude that instead of discovering the facts for themselves, they once again relied on the propaganda from one side of the case. The November 18th hearing referenced in the article was a “Demurrer” to the petition and complaint, as an initial challenge to all the allegations lodged by the Vermuelen Family and Spieker Development. In actuality, the judge threw out their due process claim altogether, and the other complaints will be heard after all the evidence is gathered and presented to her. Specifically, the judge stated: “Whether Petitioners can prevail is not the question before the court at this stage.” The judge only looked at whether there were sufficient facts and legal arguments made by the plaintiffs to get past this first and early stage of the case. Even if they had not had a “snowball’s chance of carrying the day,” according to the judge, she would have still had to wait to hear all the evidence.
The City looks forward to upcoming steps to further narrow the case to ultimately have the court rule in the City’s favor. This is because there is no legal justification for the court to require the City to effectively change the zoning of the Vermeulen Ranch Property from agricultural uses to dense residential uses when there is no proof that the property cannot be viably used for the many land uses allowed by the current General Plan designation. Also, the property has been leased to Armstrong nurseries since 1998, as well as a T- Mobile facility and the Retail Center. A mere desire to build a more lucrative project than historically existed is not a “taking” by the City. They also seek to undermine the will of the voters as exercised in their inherent referendum powers requiring either a repeal of the Spieker project or a special election, which made no sense on the heels of an election where it was one of the main issues. More than 60% of the electorate voted for candidates who opposed the development. In any case, it is timebarred by the statute of limitations. Also time-barred is the recitation of decisions dating back to 1990. The City looks forward to having their defense to this lawsuit heard by the court next year. Have a question for Mayor Pro Tem Ferguson? She can be reached via email at: kferguson@sanjuancapistrano.org
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San Juan Capistrano (see inset box “Public vs. Private Purpose Bonds”). It also restricts the percentage of public property that can be allocated (leased) to a private business. As stated previously in the CCS, we believe the City may have violated the terms of the bond by leasing such a large portion of the property to a for-profit company that generates revenue far in excess of what is allowed by a Public Purpose Bond. The CCS has joined several residents in questioning whether this arrangement constitutes a gift of public funds.
Story continued from page 1... private equestrian events company] and an elite group of equestrians from out of town.”
Another beneficiary is the seller of the “open space”, the Rancho Mission Viejo Company. They are selling the surrounding acreage to developers to build 14,000 homes and 5 million square feet of commercial and retail business. The developers are listing San Juan’s “open space” including the riding park, as an amenity in their marketing material. Another speaker from out of town At the November Equestrians who currently enjoy whose daughter almost exclusive use of the Riding 16, 2015 Parks is an equestrian, Park claim that equestrians from out and Recreation expressed of town generate revenue for SJC Commission concern for the retailers however, 5 million sf of meeting, retail/commercial is being constructed homeowners several speakers across the street from the Riding Park. living across the encouraged the street from the Commission to keep the Riding Riding Park should the property Park in private hands. The problem, be used for sports like baseball, for according to San Juan residents, example. “If I lived in those houses is that the vast majority of these [across the street], that would be a supporters are equestrians from major problem for me…” But the out of town. Thus, they enjoy the houses she is referring to are not benefits but do not pay the increased in San Juan. Neither she nor those property taxes to purchase the park. homeowners pay the increased property taxes for the Riding Park One out-of-town equestrian who property, yet derive the benefit from owns a horse products retail store in having the park across the street. San Juan, talked about the amount of money she generates from The issue of public access has equestrians who attend events at been raised repeatedly over the the Riding Park, including some years by residents however, the from Europe. But that is exactly the previous council majority of Sam problem, says Commissioner Kim Allevato, Larry Kramer and John McCarthy. “This open space was Taylor, stymied efforts to allow never intended to generate revenue free public access. In 2013, thenfor retailers or service providers; Councilman Roy Byrnes requested it was intended for the enjoyment that the council re-visit the many of all residents of San Juan who restrictive clauses in the purchase are paying for it.” Another San contract that negatively impact San Juan resident who asked to remain Juan residents. However, despite unnamed asked, “Why should we the fact that the seller, Tony Moiso pay for a park that we can’t use? of the RMV Company, agreed to The only ones benefitting from this discuss possible re-negotiation of Riding Park are Blenheim [the some of the restrictive clauses in
the purchase agreement, Allevato, Kramer and Taylor refused to review the contract. They also refused to terminate the lease agreement with Blenheim which would open up the riding park property to the general public. In fact, the out-going “old guard” council majority, which was soundly rejected by voters in the last election, increased Blenheim’s lease to two years, from its previous oneyear contract and reduced the lease amount.
The Commission intends to discuss the issue at their December 21 meeting. The Parks and Recreation Commission meeting will be held in the Council chamber at City Hall, beginning at 6pm on Monday, December 21. The public is encouraged to attend, or watch it on streaming video on the City website at: www.sanjuancapistrano.org.
Definition of 'Private Purpose Bond'
A type of municipal bond that is issued to finance a project for which at least 10% of the benefit will go to a private sector entity. Municipal bonds are usually associated with tax-free income. However, the Tax Reform Act of 1986 requires municipal bonds to be categorized as either public purpose or private purpose, and makes the interest payments that investors receive from private purpose bonds taxable unless the bonds are specifically exempted.
Breaking Down 'Private Purpose Bond'
A bond used to finance a sports stadium would be considered private purpose because much of the income generated by the stadium will go to sports team owners.
Definition of 'Public Purpose Bond'
This type of bond is used by municipalities to finance public works facilities and improvements. However, the vast majority of the benefit provided by the project being financed by a public purpose bond must be directed at the public at large, and not at private individuals. Public Purpose Bonds are generally employed to fund such projects as road construction and maintenance, libraries, swimming pools and other municipal facilities.
Breaking Down 'Public Purpose Bond'
As with all other types of municipal bonds, the interest paid from Public Purpose Bonds is exempt from federal income taxes (and often state and local taxes as well). Public Purpose Bonds were first defined in the Tax Reform Act of 1986. Municipalities that are authorized to issue this type of bond must have the ability to tax their residents, plus eminent domain or police power. Source: Investopedia; http://www.investopedia.com/terms/p/public-purpose-
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San Juan Capistrano
Rumors vs Reality In our ongoing effort to separate fact from spin, we have listed below several rumors that have been floating around town about City governance, versus the facts based on our research and documentation. Rumor: A City Commissioner wants to shut down the Boys & Girls Club. Fact: False. The Boys & Girls Club of Capistrano Valley is an independent charitable organization that is not controlled by the City. No Commission has the power to “shut it down”. The issue raised at a Parks and Recreation Commission had to do with ending taxpayer-funded subsidies to all charities. The question is why this charity gets $78,000 of taxpayers’ dollars per year plus free use of a $2 million City-owned facility, when other worthy charities get nothing – especially charities that have little to no money. There are many deserving charities whose staffs are all-volunteer and unlike the Boys & Girls Club Director, take no salaries. The most recent tax return for the Boys & Girls Club (2013) posted online at Guidestar.org shows net assets of $5,749,000.00, and collected contributions of $1,549,000.00. The Director’s compensation was listed at more than $111,000, plus expenses (undefined). It is unknown whether he has received a salary increase in the past two years. Rumor: Bicyclists cannot ride on the portion of trail along San Juan Creek between the Eastern open space and town, adjacent to the property formerly owned by “The Oaks” equestrian facility (now being developed for residential homes). Fact: Bicyclists continue to use the trail, as they have for many years. The push to pave the trail is, according to Councilman Sam Allevato, to serve the Ranch's bike trail through Reata Park. By extension, it will serve the massive development of 14,000 homes and 5 million square feet of commercial/retail business being built on our Eastern border. Some commissioners question whether San Juan should accommodate trail users to get from the new Ranch development, through San Juan to the beach and if so, why San Juan taxpayers should pay to maintain a trail to accommodate the new Ranch development. Rumor: Councilmember Kerry Ferguson directed staff to remove items at Reata Park that were incorrectly installed by the Open Space Foundation, when she had no authority to do so. Fact: False. Former City Manager Karen Brust directed the items be removed for safety reasons.
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Mission Viejo
Letter to the Editor
Raths is “Odd Man Out” During Mission Viejo's Dec. 8th city council meeting, Councilman Frank Ury was elected mayor for 2016. The vote was 4-1, with Councilman Greg Raths dissenting. Outgoing Mayor Cathy Schlicht completed her 2015 term with Ury's election.
for mayor pro tem. Within a few months, conservatives who supported him said he had changed sides. By midyear, he was consistently voting with his former opponents, Frank Ury and Wendy Bucknum.
In July, Raths apparently thought he had waited long enough to become mayor, and he tried to remove Cathy Schlicht in the middle of her term. While Ury and Bucknum might have found some humor in it, Raths withdrew The titles of mayor and mayor pro his agenda item prior to the meettem are supposed to be rotated ing. He was wrong if he thought among all five council members. the public wouldn't hear about it. However, the titles are usually At a subsequent meeting when rotated only among the majority Raths denied he had ever agenmembers, who seem to skip over dized the item, a citizen presented anyone who doesn't agree with the information from the public them. microphone and supplied a city document to prove it. Before the Raths was mayor pro tem during city clerk could process the docu2015 and, under normal circumment, it "mysteriously" disapstances, he would move up to peared from the file on her table, mayor. Since very little has been launching a police investigation. normal about Raths' first year No one admitted to taking the in office, he was presumptuous document, and the citizen proabout the celebration he said he vided another copy for the public was planning. record. The role of mayor pro tem went to Wendy Bucknum with a 5-0 vote after Raths and Ed Sachs declined being nominated for the position.
After Raths was the top votegetter in the November 2014 election, he told his council peers he should jump to the front of the line for the 2015 mayor's seat. After some contention, he settled
Mission Viejo Story continued from page 1... linked polyethylene flexible tubing") to fix pinhole leaks. PEX will not corrode like standard copper piping. If you experience a slab leak, after paying your deductible, the insurance company will pick up the tab. In our experience, pinhole leaks inside the walls are not covered. Perhaps it is time for the insurance industry and hundreds of victims
According to campaign finance reports, Raths is carrying a considerable amount of debt from his failed run for Congress in 2014 plus his council campaign last November. His votes favorto work together to initiate a Class Action lawsuit against the water districts that, I believe, have added some chemicals to our water supply which accelerate the pinholes being found in our pipes. Larry Gilbert, a retired electronics industry executive, has lived in Mission Viejo since 1977. He is a former board member of the California Alliance to Protect Private Property Rights and is a Mayoral Appointee to the M.V. Oversight Board to the (redevelopment) Successor Agency.
ing special interest throughout the year might have gotten him a hearty handshake from the “money boys”, but not much else. After one year in office, he has cut himself off from most conservatives and he has attacked the city's watchdogs. Raths is odd man out in county politics as well. Prior to the Dec. 8 meeting, Raths was still promoting himself as the next mayor. As the meeting began, several of his supporters sat in the audience, but no one spoke on his behalf. The election for mayor went quickly, with Ed Sachs nominating Ury, and Ury seconding the motion. After Raths voted against Ury, he wouldn't accept when Bucknum nominated him for the consolation prize of mayor pro tem.
but he couldn't get even one vote for mayor from his council peers. After the Dec. 8th election, some of his former supporters said he eluded to "making some mistakes." Just a few of his errors include selling out to special interest, crossing swords with conservatives, trying to oust Cathy Schlicht in the middle of her term as mayor and becoming abrasive with anyone who disagrees with him. His biggest mistake may have been thinking Ury or Bucknum would support him for mayor after he switched sides to vote with them.
Raths may have been the top votegetter in November 2014 election,
Joe Holzman Mission Viejo
For Greg Raths' lesson learned: "You have to sleep in the bed you made, even if you soiled it.'"
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Mission Viejo
Guest Column
Council Took Action in 2015 By Cathy Schlicht, Mayor, City of Mission Viejo 2015 I loved being the mayor of Mission Viejo for 2015. It was a wonderful year and a labor of love as I continued to be an advocate for our great city.
We addressed the need to add restrooms to our parks that are heavily used by our children engaged in AYSO and other organized sports. Prior councils had not added a single restroom since the one at Melinda Park dating back to 2006. Out of an urgent need, the first new restroom will be installed at Pavion Park.
Unfunded liabilities are a state, federal and local concern. In an effort to take on this issue, the city council directed staff to make a lump-sum payment of $1.5 million to Calpers The greatest victory was the removal in an effort to reduce our unfunded of the unnecessary Special Fire Pro- pension liability. We also agreed to tection Maps that had been heavily pay off the unfunded retiree healthpromoted by former council memcare liability in full by June 2016. bers Rhonda Reardon, Trish Kelley and Dave Leckness. With a major statewide call for water conservation, we have converted The Orange County Fire Authority to smart irrigation controllers and agreed that the city already had in low-flow sprinkler heads. Newer place tougher requirements to deal landscaping is utilizing droughtwith any potential fires. The fire tolerant planting materials. In our maps were a burden to our homecontinuing conservation effort, the owners and had the potential to city has also converted many areas to recycled water. suppress property values. In March 2015, the new council voted to adopt Additionally, realizing that we need an ordinance to remove the Special to be competitive, the city set aside Fire Protection Area designation $300,000 in support of economic from the city. development to retain, sustain and gain new businesses. Our Economic As the first step in establishing the Development Ad Hoc Committee need for a dedicated youth center, has been proactive in looking for the council asked the Community ways to encourage renovation of the Services Commission to explore Village Shopping Center across from opportunities to bring in a youth organization to run programs for our the Civic Center. teenagers. In their research, it was So as you can see, in a sense, I discovered that there is a lack of would say under my term as mayor, programming opportunities for teens this council will be remembered as in our community, and some of our the “take action” team. We were youth are underserved. Consequent- certainly busy. ly, starting in January 2016, The Kids Factory Program will expand Despite the council’s disagreements, with an After School Enrichment we found a way to balance our difProgram at Carl Hankey, La Paz and ferences and came up with a great Los Alisos Middle Schools. year, putting our citizens first.
Mission Viejo Councilmember Cathy Schlicht
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