October 2015 – VOL 5, 10
YOUR COMMUNITY WATCHDOG
Community Common Sense
In this Issue... San Juan Capistrano The Facts Regarding the Vermeulen Lawsuit Page 1 Guest Column Page 3 City to Correct MisLabeled Trails Page 4 DA's Investigation Concludes No Wrongdoing Page 6
San Juan Capistrano
The Facts Regarding the Vermeulen Lawsuit By Kerry Ferguson, San Juan City Councilmember
You may have heard rumblings about the City being SJC Councilmember sued by the Kerry Ferguson Vermeulen family and Troy Bourne of Spieker Develop-
ment (“Plaintiffs”), over the unsuccessful development of the Vermeulen property. Some supporters of the development have gone so far as to predict that the lawsuit will bankrupt the City. Allow me to set the record straight. Here's what our critics haven't told you: The City strongly disagrees with the claims alleged in the lawsuit and on Friday,
Beware the Risks of PACE Solar Financing
Mission Viejo Mission Viejo Beware the Risks of PACE Solar Financing Page 1 Should City be in the Wi-Fi Business? Page 7 Letter to the Editor Page 9
Ladera Ranch Future of Local Governance Explored Page 1
Property Assessed Clean Energy (PACE) or “HERO” financing is a taxpayerbacked government loan program available for property owners to finance
of the Comptroller issued warnings to its national banks not to approve financing for a voluntary tax assessment, and it becomes a "super lien," a property carrying PACEjumping ahead of all existing type financing. Councilman Ed Sachs and I cast the liens on the property. dissenting votes. On August 25, our city council passed the PACE/ Earlier this month, I received HERO financing with a an e-mail from the Director 3-2 vote, even with the knowledge that the Office Story continued on page 8...
By Cathy Schlicht, Mayor, City of Mission Viejo energysaving upgrades such as solar power. The loan is attached to the property as
Ladera Ranch The Ladera Ranch Civic Council (“LRCC”) has been working with key decisionmakers at the County and the Local Agency Formation Commission (“LAFCO”) to determine what options exist for local governance of Ladera Ranch. At the
September 18, 2015, the City This is filed a motion challenging the contrary lawsuit on many grounds. to California It is the City's position that Law. the lawsuit improperly seeks to usurp the City's broad The Plainpolice powers and to dictate tiffs' position is also not suphow a City Council should ported by the facts. Although the Vermeulen property has exercise its discretionary legislative and zoning author- been used for farming and ity by effectively forcing the other agricultural uses since City to “up-zone” the proper- 1938, Plaintiffs' claim that it ty from Agricultural-Business can no longer be viably used uses to dense residential uses. Story continued on page 4...
Future of Local Governance Explored
regular October meeting of the LRCC, Carolyn Emery, LAFCO Executive Director, previewed findings that will be presented to the commission for formal adoption. Ms. Emery reported that LAFCO will find little op-
portunity for incorporation or annexation to bring local government to Ladera in the next five years. Timeframes remain 15 years
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out and are constrained by the progress of the Rancho Mission Viejo development and the absence of financial support from the state and county. Several short-term options exist, including some that have been considered and ultimately adopted by other nearby communities. One example is the City of Story continued on page 10...
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San Juan Capistrano
Guest Column
The Case for Moving SDG&E Substation Out of San Juan By Dominic Fergus-Bentall I am puzzled by SDG&E’s continued pursuit of the doubling of the substation in the middle of San Juan Capistrano residential neighDominic Fergusborhoods when a Bentall (center) with his children. better alternative exists. SDG&E’s “Option F” plan would move the substation away from homes and people, by putting it on vacant Ranch-owned property east of town.
it to the Ranch property, considering that their new developments are creating the need for increased power, not San Juan. San Juan is built out; it’s not us who need it. While I understand the concept behind the Chamber of Commerce’s promotion of SDG&E’s expansion plan in general, I am concerned by the Chamber Board of Directors' vote to promote it in the middle of our town when so many in our community will be adversely affected by it, and when we are not the
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And yet the proposal by SDG&E, which claims to be a good neighbor by sponsoring our annual Fourth of July fireworks display, will no doubt be destructive to the property values of hundreds of homes. More importantly, the doubling of the electro-magnetic fields (“EMF”) which will result from the expansion, pose a potential health risk to the people who live, work and play The Chamber of Commerce's 2015-2016 Visitor's near the high voltage Guide includes this full page ad promoting transmission lines. SDG&E's proposed expansion It is unclear why SDG&E continues ones who will be benefitting from it. to pursue building a huge substation What’s troubling is that the Chamhub in the middle of historic San ber purports to represent businesses Juan. According to their own docuthat want and need support from the mentation, moving the substation to community but are unwilling to supvacant Ranch-owned property away port the community in return. This from homes and people, is indeed an clearly is not a two-way street. option. And it makes sense to move
In a recent article in the OC Register, watchdog Teri Sforza offers a glimpse into the enormous amount of money entities such as SDG&E spend to meet their objectives: “The big players on the Orange County business scene poured nearly a quarter-billion dollars into flexing their political muscle in California over the last five years, according to a Register analysis of records kept by the secretary of state. But the most prolific spenders on campaign donations were not the big banks, or even big retail, as many consumer groups often suspect. They were, instead, the utility companies that provide gas and electricity to Golden State residents and must win the California Public Utilities Commission’s approval to hike rates.
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The top political contributor was Pacific Gas & Electric, followed by Sempra Energy, parent of San Diego Gas & Electric, and Edison International, the parent of Southern California Edison. Together, the state’s three major utilities spent $105.3 million on political contributions, general lobbying and PUC lobbying over the years examined.” Despite the gloomy scenario presented by the specter of bought-andpaid-for regulation and legislation, I still believe there is power in numbers. The people prevailed when SDG&E wanted to build a power station close to homes in Ladera Ranch in 2008. That project was rescinded thanks to push back from the residents. SJC residents can do it here too. To learn how you can help, visit: http://www.stopsdgeexpansion.com. Dominic Fergus-Bentall lives in San Juan Capistrano with his wife and two children. PAGE
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San Juan Capistrano
City to Correct Mis-Labeled Trails In the September edition website. The videos of the CCS, we printed subsequently made an article about the City their way onto Youhaving illegally re-labeled Tube. The Chamber equestrian-only trail easeof Commerce has also ments as multi-use (hikpromoted the incorrect ing/biking/equestrian). trail maps. Residents in several neighborhoods have complained We reached out to the about hikers, bikers and City to determine what ATVs accessing trails if any, action was Residents in several on private property being taken to correct neighborhoods have the misthat were intended complained about only for equestrian labeled trails. Acuse. According to resicording to Assistant hikers, bikers and dents, break-ins have Interim City Manager ATVs accessing increased, fencing has David Ott, City staff trails on private been removed to allow property intended for are currently finalaccess for recreational izing the review of equestrians only vehicles in areas with all trail easements. dry brush, people using the trails for “Staff will very soon be walking any parties have left trash and other para- identified trails that have easements phernalia behind, and bikers have indicating for equestrian use and spooked horses on equestrian-only [will] remove signage that indicates trails, posing a risk to riders. multi-use trails. New signs will be ordered and installed when they are The City has printed and distributed received” said Ott. The City has maps, posted signs on the various already removed videos of the trails trails and on Ranch Viejo Road (with from their website. a receptacle for maps), posted the exists does not provide any basis, incorrect trail map on their website and videotaped the trails which until constitutional or otherwise, for forcrecently were also posted on the City ing the City to change the General Plan designation.
Multi-Use Trail
San Juan Capistrano Story continued from page 1... for agricultural and other uses allowed by the Agri-Business General Plan designation of the property is patently false. The property has been leased to Armstrong nurseries since 1998, a T-Mobile facility provides extra beneficial use, and the Retail Center, which is part of the Vermeulen Ranch, continues in business to this day. The Agri-Business zoning allows many different types of uses, but the Plaintiffs never applied for any of those uses. A mere desire to up-zone and build a more lucrative project than historically existed or currently
It is also the City's position that the lawsuit improperly seeks to undermine the will of the voters. Last November, well more than the required number of voters in the City exercised their inherent referendum powers by challenging the resolution that had approved a General Plan Amendment and Specific Plan for Spieker Development's Project. Once the voters have spoken by referendum petition, the California Elections Code requires the City to repeal the resolution or hold a special election. The City Council voted to repeal it since the very recent election had yielded 60% of the votes cast rejecting candidates who favored the project, including two incumbents who had voted for
The City's Recreational Trails Map incorrectly designates several trails as being "multi-use" when the easement for them was granted to the City as "equestrian use only". Source: City of San Juan Capistrano
it in a very unfairly conducted City Council Meeting that sought to ram it through - no matter what. It should be noted that Spieker did not challenge the repeal of the Project approval and cannot do so now because the 90 days for filing a legal challenge has expired. It is also important to keep in mind that the California Election Code prohibits the City from taking an action within 12 months contrary to the issue presented by a referendum. The City has also challenged the Plaintiffs’ constitutional claims for regulatory taking, due process and equal protection on procedural and legal grounds. A substantial part of the lawsuit is based on complaints that the City treated the Plaintiffs unfairly by using Measure D and Measure Y funds to buy other properties, claim-
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ing the City should have bought the Vermeulen Ranch with those funds. Electing to acquire one property over another using Measure D or Measure Y funds that are designated for specific uses, such as open space and preserving the rural character of the City, does not violate Plaintiffs' equal protection rights nor provide any basis for trying to dictate how the City should use those funds. Again, this is an untimely attempt to challenge decades-old discretionary legislative actions by the City, including the City's decisions between 1990 and 2009 on how to spend bond funds that were approved by over two-thirds of the voters. For all these reasons, the City looks forward to having the City's defense to this lawsuit heard by the court in November. We will keep you posted. To subscribe to Councilmember Ferguson’s free monthly e-newsletter, email your request to: kerrykfergusonsjc@gmail.com PAGE
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AN INVITATION FROM OCEAN HILLS LEAD PASTOR, JEFF PRIES 32222 Del Obispo San Juan Capistrano “We are in a fun season here at Mariners Ocean Hills. A season where we are focusing on community and working through our series on Romans called Transformed, because if we are honest, we all are looking for life change. We are now heading into the holiday months where there will be so many fun things to be a part of. It will be a great time for people in all seasons of their life. So if you are looking for a community focusing on Jesus and each other, we invite you to join us and give us a try.” Blessings, Jeff
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Over the last few weeks, we’ve been talking about this battle of sin that we all face, and learning that Jesus came to free us from sin. Jesus came not only to free us from the penalty of sin, but from the power of sin. We talked specifically last week about the battle of wanting to live the right way and do the right thing, yet we find we just can’t at times. We don’t do what we want to do, and to make matters worse, we actually do what we hate. We learned we’re not the only ones struggling with this; the Apostle Paul had this battle too. So we do what we think is the answer: try harder. Then we fail and feel guilty. What a miserable cycle! This weekend we’ll be talking about how we can combat this vicious cycle. It’s an essential part of the whole series - one you will not want to miss.
Christmas Eve at Mariners - 3:30pm and 5:30pm Community Common Sense
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San Juan Capistrano Another door in the saga of the Urban Village referendum was closed recently with the conclusion of investigations sparked by complaints filed with the Orange County District Attorney’s (“OCDA”) office. The complaints alleged wrongdoing by Council members Kerry Ferguson, Pam Patterson and [unnamed] community member, and voter intimidation by the proposed developer during the Urban Village referendum process. According to OCDA Spokesperson Roxi Fyad, the claims were investigated, insufficient evidence of wrongdoing was found and no charges will be filed. The ”Urban Village” downtown hotel and residential development was the subject of a referendum after
DA’s Investigation Concludes No Wrongdoing the City Council majority of Sam Allevato, Larry Kramer and John Taylor voted to approve it over the objection of many in the community. Residents voiced concern about traffic and other negative impacts. After their concerns were dismissed by the council majority, a group of residents quickly raised more than the required number of signatures for a referendum in December 2014, to repeal the council’s approval of the project. A lawsuit was also filed challenging the project approval, alleging that it violated the Historic Town Center Master Plan on a
number of fronts. The lawsuit is ongoing. Two complaints were subsequently filed with the District Attorney. One alleged that Council members Kerry Ferguson and Pam Patterson had acted
improperly with respect to the referendum, although the specific complaint was not divulged. The second complaint alleged voter intimidation by the proposed developer. Both claims were investigated by the DA’s office and resulted in dismissal. “We are closing our inquiry into this matter,” stated Deputy District Attorney Angela Hong in letters to the complainants.
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Mission Viejo
Should City be in the Wi-Fi Business? By Larry Gilbert Should the city of Mission Viejo get involved in providing wireless Internet service to tenants in one of our strip malls? If so, what added support would be required should we become a “partner�? At the October 27 City Council meeting, staff added Agenda item (#12) to offer support of high-speed wireless internet (Wi-Fi) connectivity at one of our original strip malls across the street from our city library. The proposal included a spreadsheet of possible charges to the (15-20 interested) users/tenants in the Village Shopping Center based on their projected bandwidth needs. For years, the City has attempted to get cooperation from the dozen-plus property owners in this Center to modernize their parcels. Council member Ed Sachs was very vocal and frustrated with representatives from Cox cable, who basically holds the keys to our City communication, for failing to work with the small businesses after five years of interfacing to install the required infrastructure. This fight is between the tenants and the property owners. While Mr. Sachs points out possible sales tax leakage (as consumers may not shop in this center due to the lack of Wi-Fi) what is overlooked is that the tenants knew in advance what they are getting from the owners. It's called their leases. If Wi Fi capabil-
ity is not included in their lease, that is a factor they should have considered when signing or renewing their leases. I am certain that their lease rate per square foot is likely less than similar parcels in the City and surrounding areas that offer Wi-Fi service. After hearing from an owner and a few tenants, along with a representative from TelePacific, a potential vendor who identified themselves as having a new agreement with Saddleback Lanes, this council decision was tabled until the first meeting in December. The City proposal is being called a back-up plan as we do not wish to be in the business of providing this technology to the private sector. In order to determine whether Wi-Fi was available at the Center in question, I did a "drive-by" with my cell phone. I confirmed that some of those listed as interested parties in the City report already have Wi-Fi including Saddleback Lanes, Moore's Sewing, the Shirt Cannery and It's a Grind. Even Panera Bread located across Marguerite Parkway, has open access. We counted around 20 store locations that currently have either "open" or "secure" systems confirming that the capability is present. Michael's, the Party Store, Saddleback Lanes, It's a Grind are all open access. SteinMart, Round Table, Big Lots, Trader Joe's and Zee Pizza plus
several others are also connected. The wireless router providers included Net Gear, Verizon and Direct. As I stated to the City Council during Public Comment, I support wellthought out, cost-effective economic development; however, singling out one Center in our entire city for an investment of up to $500,000 raises a few questions and concerns; 1. Do all 24 shopping centers in our City have their own Wi-Fi infrastructure? 2. Have the Village Plaza owners taken any initiative on their own to accomplish this capability for their tenants? If so, why is the City involved in this effort? 3. If the City is focused on providing this capability solely to the Village
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Plaza properties, isn't this a form of favoritism? 4. As we want the strip mall owner to upgrade their properties, what concessions are we getting from these multiple owners in exchange for this proactive initiative? I am hopeful that our elected representatives on the City Council will seriously consider these points before making a decision about how best to spend taxpayer dollars. Larry Gilbert, a retired electronics industry executive, has lived in Mission Viejo since 1977. He is an elected 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.
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Mission Viejo Story continued from page 1... of Finance for New Jersey PACE, asking me to share my reasons for rejecting PACE-type financing. Following is my (paraphrased) explanation. I voted “No” on the PACE programs because these programs are nonbank consumer loans that are not regulated by standardized disclosure laws enforced by governmental financial regulatory agencies. So, consumers, especially those on fixed incomes, are at risk of signing up for the program without understanding the true expense of the financing or the actual energy cost savings. One problem with this type of financing for homeowners is that the cost of it reduces their home equity. As a result, when they sell their home, they must either negotiate with the buyer to take over the financing; decrease the sale price to pay for the financing, or pay off the loan with the proceeds of the sale. In the latter case, the seller has paid in full for a product without realizing full benefit. There also appear to be constitutional issues with creating these super liens, as they interfere with the contractual relationship between homeowners and mortgage lenders. A bank's security in the property is the equity, and these super liens take away or reduce the equity position of the bank. I believe the banks have the legal right to foreclose on a homeowner for placing its lien in jeopardy. While I am not aware of any financial institution taking those steps, I believe they have the contractual authority to do so for violating the terms of its contract. California has created a $10-million reserve fund to protect lienholders from defaults, but that does not address the real risks associated with
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this type of financing. The super lien runs with the land, and any subsequent property owner, whether it be the foreclosing bank or a bidder at the sale, will be responsible for paying off the PACE financing. On a personal note, I do NOT believe it is the role of government to be a collection agency for such financing. This is a bad precedent and a gateway to allow other forms of “creative financing” that benefit the investors by reducing their risk, while at the same time putting at risk the equity of the property, jeopardizing both the property owner and the bank. The consequence of super liens will be added costs to all our institutional loans, as rate and risk go hand in hand. PACE super lien financing creates a bigger risk to financial institutions; therefore, the costs for our conventional loans will increase in both rate and fees. The only real benefactors behind these municipal-funded loans are the investors, the contractors and the various PACE agencies. Fortunately, there are other alternatives. Some companies now offer what are called “Power Purchase Agreements,” which allow the customer to purchase solar power at a rate lower than what electricity providers are charging. The customer agrees to purchase solar power at a fixed rate; no down payment is required; the solar company installs and maintains the panels and should the homeowner decide to sell, the company removes the panels. Of course, potential customers should check out the solar provider’s reputation and read contracts thoroughly to understand what they are agreeing to long-term, but at least options exist. Mayor Schlicht can be reached via email at: cschlicht@cityofmissionviejo.org
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Mission Viejo Letter to the Editor
The Vicious Cycle of Costly Replanting Vegetation can be both beautiful and drought-tolerant. This is a dry climate, and Mission Viejo residents should wonder if city hall's landscape planners acknowledge where we live.
medians, corners and roadsides. Traffic is disrupted, and the area is unsightly for months. Thriving vegetation is removed for the new plants, which take years to fill out.
During droughts, the city says the medians must be replanted with drought-tolerant vegetation. During a year with normal rainfall, they decide to beautify and upgrade with thirsty sycamores and Hall's Honeysuckle. If they're not replacing turf with jagged rocks, they're adding pillars, obelisks and big, brown pots. The vegetation is inconsistent.
By the time the plants mature, the area is targeted again, either for refurbishment or drought-tolerant replanting, depending on what's there. Some targeted areas are allowed to deteriorate "because they'll be replanted," and other areas in north and south Mission Viejo are ignored. The medians near city hall are constantly redone while the Alicia slopes are the poster child for neglect. Apparently, the drought hasn't affected the weeds along Alicia Pkwy.
When the city targets a street for landscaping, it can involve
Along Marguerite and Los Alisos, hundreds of sycamores have withered or died. This was the second attempt, as dead sycamores were replaced with more sycamores. Typically, sycamores are waterabsorbing trees, naturally found in lowlands and river bottoms, not flatlands. Before selecting trees, find out if they are sensitive to dry climates and mineral-laced recycled water.
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If I understand correctly, the medians rely on recycled water, so replacing the vegetation to "save water" during the drought didn't affect the water supply. If that's true, the primary beneficiaries of the replanting projects are the landscape contractors. Joe Holtzman Mission Viejo
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Ladera Ranch Story continued from page 1... Laguna Hills, where community leaders faced similar challenges for establishing governance in their area. The LA Times on June 25, 1989 listed the following options which were considered at that time by residents and taxpayers in Laguna Hills. These options could also apply to Ladera Ranch: “- Asking the County Board of Supervisors to create a Municipal Advisory Council (“MAC”) for the Laguna Hills area. Such a council has elected members from a community who function as advisers to the Board of Supervisors. - Petitioning the supervisors to create a community services district, which has more authority than a council. The community services district establishes a fund for property taxes that otherwise would go to county government. A district board, which is elected, allocates the funds for such things as street cleaning and lighting. - Seeking city incorporation one more time. State law forbids the same area from seeking incorporation within two years of a failed effort at the polls. But the two-year ban does not apply if the area seeking incorporation is "substantially different." - Doing nothing and allowing Laguna Hills to remain as it is, an unincorporated area ringed by cities or cities in the making.” Laguna Hills officially became a city in 1991 with the help of state Vehicle License Fee (VLF) funding, and subsequently annexed several adjoining areas into the city. Emery reported that LAFCO will find a “MAC” to be feasible for Ladera in a short timeframe. However, this would make Ladera a mere extension of the County and the benefit this would bring to Ladera residents is uncertain. The LRCC
itself is on record preferring that the County form a Community Services District (CSD), which would provide greater fiscal transparency of County operations that support Ladera Ranch. Emery explained that either a MAC or CSD could be an interim step toward local government formation or annexation, but suggested that the County had less incentive to support a CSD while the surrounding areas of Rancho Mission Viejo continue to develop. While County leaders profess a desire to be out of the municipal services business in unincorporated areas, the county government as a whole is not inclined to give anything up without compensation. There is no present path that doesn’t end with Ladera taxpayers “owing” the County for infrastructure and general services. A LAFCO staff member cited as an example the City of Rossmoor,where 75% of voters were in favor of incorporation during the election, but 75% also voted against the tax that would have made up the shortfall necessary to fund the proposed city government. In their case the referendum failed due to the latter vote.
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The shortage of tax revenue to operate a new municipality while paying off the County is an obstacle that was previously overcome by state apportionment of the Vehicle License Fee; however, the state no longer provides VLF support to incorporating areas. To further explore the options available for establishing local governance and to obtain input from the community in making decisions about Ladera Ranch’s collective future, the LRCC put together a community outreach program, “Imagine Ladera”. For more information, visit the Ladera Ranch Civic Council’s website at: http://lrciviccouncil. org/cms/imagine-ladera.
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