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Part 1 of this series, giving the broad strokes of what the City of Anaheim is trying to accomplish through litigation — unchecked power for a bare 3-person Council majority to commit the City to as much future spending as it and its big donors fancy — appears here. Part 2 of the series, which addresses the complex structure and function of the system that Anaheim is using to prevent public votes on very large public expenditures, and will be a good reference for anything you don’t understand later on appears here. Each part will make more sense if you read the parts preceding it, but we’re trying to make each of them stand alone as well.
3. The Case That May Determine Whether Anaheim Has Any Real Democracy Left at All
The case of Coalition of Anaheim Taxpayers for Economic Responsibility and Inland Oversight Committee v. City of Anaheim, et al. was decided on Friday August 26 in Orange County Superior Court — although it will be appealed. Let’s begin by unpacking those names.
The first party noted above is better known as “CATER,” a good government watchdog group operating in Anaheim. (Your humbel author is General Counsel of CATER, but is not writing in that capacity, but rather writing because there’s just a couple of us in the blogosphere who appears able to do so — and given the stakes to the City it must be done.) The second party is better known as “IOC,” and is represented by the law firm of Cory Briggs, who has successfully challenged the City of Anaheim on behalf of Orange County Communities Organized for Responsible Development, better known as OCCORD. Briggs has a wonderful track record of success, especially at the appellate level, in cases involving improperly constructed municipal bond offerings.
The “et al.” after Anaheim’s name refers to various other entities that are all governed by the members of the Anaheim City Council, wearing “different hats” when acting as different agencies. So we have the Successor Agency (“SA”) to the Anaheim Redevelopment Agency (“ARA”) and the Anaheim Public Financing Agency (“APFA”), the offspring of City and the ARA, now being sustained by the City and its step-parent, the SA.
For those who haven’t read the previous installments — and why not? — the City claims that when the Council puts on a given hat, it can evade any democratic restrictions on its power, allowing it to commit essentially unlimited future City funds to present-day financing without a public vote.
The whole central issue in CATER and IOC v. Anaheim boils down to this:
If the City wants to commit public monies to pay for a new bond indenture for the purposes of construction, where the bonds are issued by a Joint Powers Authority now managed by the City and the Successor Agency, do they have to take it to a public vote?
That’s what we’re fighting about. CATER could ultimately be proven right, or be proven wrong, but the startling this at this moment is that the City is taking this to court, rather than settling this case, to defend the principle that they DON’T have to let the people vote!
That’s your Anaheim City Council majority in action!
CATER and IOC say: “YES, you have to take it to a public vote.” In the example of CATER and IOC v. Anaheim, the city is putting obligating the city’s to repay over half a billion dollars over the course of somewhere between 30 and 38 years in order to, primarily, fund the expansion of the Anaheim Convention Center (“ACC”), without which Anaheim might allegedly lose two large annual conventions. (The conventions may leave Anaheim anyway, of course, even if the ACC expands; the City has no binding long-term contract with them.)
The City says: “NO, we don’t have to take it to a public vote.” Note that we’re not even talking here about a 2/3 vote that would be required by Proposition 13 and other provisions if the City were issuing the bonds itself. We’re talking about a simple majority vote. The City doesn’t want to put this half-billion dollar project to a vote because it is afraid that it would lose. And, if it doesn’t have to put this project up for a vote, it also doesn’t have to put any other similar project up for a vote.
The City of Anaheim does not want citizens to be allowed to vote on approving half-billion dollar expenditures of public money — or billion dollar or ten billion dollar expenditures, for that matter. The City wants citizens to vote only on the members of the City Council — a majority of whom, once elected, can use the JPA, in this case the APFA, to spend pretty much as much city money as they want on whatever they want, with the profit going to whomever they want.
It’s “the tyranny of the trio.” See — we told you that this was about to get interesting.
OJB can sense some disbelief in its reading audience. You don’t have to take our word for it. We will soon have a transcript of the arguments that took place in the Courtroom — and you will be able to read with your own eyes what a partner in Rutan & Tucker, the City’s outside Counsel, told the Judge while the City Attorney for Anaheim, Michael Houston, looked happily on from the gallery. This “Keep the People from Voting” position REALLY IS the position of the City Council majority — unless they are simply too dense to understand the meaning of their own votes.
Here is that meaning, as stated by CATER’s President Cynthia Ward:
Imagine if you will that there IS NO CODE that these agencies have to abide by. That once they are created, no matter what basis they were founded on, they no longer answer to that legislative code because they have become their own monster, unstoppable, and unaccountable. The State may giveth, but according to Rutan and Tucker the State may not taketh away, or even make demands once the JPA is formed.
Beyond the law, able to spend without consequence (to them), and controlled only by the results of one election every two years — into which the very interests that benefit from this City Council spending can pour unlimited amounts of money.
Look at your mailboxes and your cable TV ads, Anaheimers! If Disney and the other folks who are flooding them get at least three seats on the City Council — which means electing ONLY ONE AMONG Lucille Kring, Kris Murray, and Gail Eastman — this is what they claim the right to do to the City. Any and all major construction spending and subsidies through the JPAs — and as much of it as they and their big donors want.
If you didn’t realize that the states were this high — they are. And that is why you may soon be finding yourself in a position that you never expected: reading a trial transcript. Stay tuned.
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