Sandoval Calls For Redirection In GT
Bernardo Sandoval is vying for a position on the Grand Terrace City Council this year because he says the city is in need of serious redirection.
“I believe there has been serious financial mismanagement in the past that needs to be dealt with in order to deal effectively with the challenges the city faces,” he said. “I believe I have the strength, leadership capability and the creativity to think out of the box.”
Sandoval offered his view that “The number one challenge facing our city is the debt that we have accumulated through deficit spending over the last 20 years. It is to the point that for us to pay it back would require diverting $340,000 per year for the next 14 years. Adding to that challeng
e is this is not an expected expenditure and it comes not while the economy is booming or even normal but during an economic downturn when money is very hard to come by.
“We must live within our means as a city,” Sandoval continued. “I believe the accounting practices Grand Terrace has used in the past are no better than what Enron was doing. Enron used offshore companies to make their financials look better than they were. What Grand T
errace did was it took on debt in the redevelopment agency to strengthen the general fund and operational budget and build up its reserves. Overall, it was artificial because the debt was being booked in the redevelopment agency. It is fundamentally dangerous to be operating this way.
“I’d like to see the city create an audit committee that would be made of members of the public and a subset of the city council members that would be able to meet directly with the certified public accountant that is responsible for for the city’s financial audit to go through the findings without them being colored or filtered through by the city manager,” Sandoval said. “Had we done that in the past it would have established a clear transparency with regard to the true fina
ncial position of the city. We would have known exactly where we were financially.”
Sandoval is running for the four year term on the council that is up in this year’s election. That position is now held by Bea Cortes, who is seeking reelection. Another candidate for the four year post is Tom Schwab, who was Grand Terrace’s finance director from 1984 until 1989 and its city manager from 1989 to 2008. Schwab was the architect of most of the city’s policies for nearly two decades. Sandoval is highly critical of many of those policies and is basing much of his campaign on reforming the city away from Schwab’s municipal
management formula.
In the past, Sandoval said, “The financial audits went through the city manager, who shaded and colored and then presented it to the city council. Our mayor and council were unaware this practice of borrowing from the redevelopment agency was going on.”
Schwab said that the councils were always informed of how the city was diverting money from the redevelopment agency into the city’s general fund.
“They were told about it,” Schwab insisted. “They may not have understood it, but they were told about it.”
Sandoval, however, said that was “grossly inaccurate. They [past city councils] were not aware of this debt. Tom Schwab has said that at the time the money was borrowed that he had no intention of ever paying that money back to the redevelopment agency and that when the charter for the redevelopment agency expired and before the city chartered a new one the debt would just be forgiven. We have since discovered it isn’t possible to do that. At the end of the day, the state will hold the city responsible for paying that debt off.”
The city needs to embrace the principles of greater transparency and accountability, Sandoval
said, and get away from both the reality and the perception that there is favoritism at City Hall. “I also believe we need to make sure vendors are held accountable and that we have the proper metrics put in place to hold every vendor and contractor Grand Terrace uses to the highest performance standards possible,” he said. “We can thus bring to an end the culture of no bid contracts issued on the basis of friendships without performance.”
The atmosphere of favoritism bleeds into the specter of intimidation, Sandoval said, explaining that it appeared something venal was afoot at City Hall whereby certain connected individuals were profiting by means of their association with the city’s power elite and that those who questioned such arrangements were threatened with retaliation for merely observing what was going on.
“I think there is a culture of control and intimidation whereby citizens involved in both normal everyday activities and those who participate in volunteer or service groups in the c
ommunity have become afraid of speaking on different issues for fear of retaliation,” Sandoval said. “We have seen a pattern of this. We have had individuals who desire to support me and do privately support me but they have said that if they do publicly support me there will be retaliation against them or their group. This is not right.”
Sandoval said the city has to facilitate the generosity of its residents and the growth of its businesses and tax base, and prioritize its goals.
“I believe we need to strengthen the volunteer organizations in the community,” he said. “We need to identify those services that are critical within the city. We need to make sure the the widening of the freeway takes place as quickly as possible to have the infrastructure we require to support businesses in Grand Terrace.
Sandoval said he represents the best choice among the current crop of candidates for the four-year position on the council now held by Cortes.
“I believe that my experience recommends me to the job,” he said. “My first management position was at the age of 27 with a CPA firm that was in the top five of the Western United States. I understand financial audits. I also know what it is to manage a multi-million dollar budget and how to hold people accountable to perform. On the other side, I deeply care about
our youth and I have worked in youth programs. I understand what challenges face in engaging their young people I have mentored young people and provided leadership training. I have established a youth leadership group at Cal State San Bernardino. I worked on a transitional housing program for young people. I understand the importance to non-profits of raising funds and getting volunteers to serve.”
Sandoval, 38, was born in San Bernardino and attended Colton High School. His post high school schooling took place at several technical institutes, including instruction from the Microsoft Corporation. He is a Microsoft Systems certified engineer. He is employed as director of t
echnical operations for a $200 million dollar regional healthcare provider group, in addition to owning a small business franchise.
He has lived in Grand Terrace for 20 years. He is married with two daughters.
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Robles Hits RDA Debt In GT Race
Sylvia Robles said she was prompted to run for city council in Grand Terrace because as the county’s second smallest municipality it has been dominated by a very limited group of people who have perpetuated fiscal policies that are detrimental to the interests of its citizens.
Robles, who has a master’s degree in public administration and worked for 25 years as a budget analyst and department manager in the county’s special district’s division, said the city of Grand Terrace for all of its 32 years of incorporation has suffered from leadership that lacked a comprehensive understanding of municipal governance and the principles of sound fiscal management.
“I have lived here for thirty-three years,” Robles said, “and I have noticed a pattern. There
have been a limited number of people elected to the council. Many who were elected did not serve out their full term and someone was appointed to replace them, someone who was the choice of the council and the establishment, the clique that runs this town. The council has been one of appointments and social popularity. This has engendered a culture where the entire city is in the redevelopment project area. The city leaders have an agenda where the taxpayers are spending tax money for retail establishments and grocery stores to subsidize entities that should have money to do their own capital improvements. We are spending money to enrich developers and companies when that money should be used for street improvements and lights and youth services and libraries.”
Robles said “The major issue in this campaign, at least for me, is how we are funded as a city. Right now the city is 100 percent in the redevelopment agency. As a result, we must incur debt before we see the benefit of tax revenue. The latest amendment to the redevelopment plan is to do $25 million in capital projects, but that means we will have to take on $25 million in debt where we will have 17 million in interest and almost $2 million administrative costs. That is almost a 2-to-1 ratio between what we are paying
for and what we are actually getting.
Robles said the problems facing the city are the result of policies designed by former city manager Tom Schwab which were ratified by a city council that was not sophisticated enough to understand the full implication of what it was voting on.
Redevelopment agencies are adjuncts to cities intended to assist in the eradication of blight and the propagation of urban renewal. By creating a redevelopment agency project area, the city can have its city council issue bonds that do not have to be approved by the city’s voters. The bonds are sold to investors at a given interest rate over a specified number of years. The proceeds from the bond sales are used to do infrastructure or public improvements to facilitate the urban renewal and the property tax in the redevelopment project area is then utilized to repay the bondholders.
Schwab convinced past councils to place the entire city of Grand Terrace into a redevelopment project area. He left the city last year and is now running for a position on the city council. Robles said Schwab made the city’s financial books way too complicated with no advantage and much actual disadvantage.
“When Tom Schwab was running this city he was the only one who understood the complex scheme of budgeting everything in and through the redevelopment agency for financial purposes,” she said. “It should not have gotten that complex. When citizens cannot understand how the city is taking in its money and how it is spending it, we have gotten too far off track.
There used to be transparency in the way cities were run. You had sales tax and property tax revenue coming in and expenditures going out. Anyone could understand it from that standpoint. Even the use of the redevelopment agency was straightforward. You could declare small areas blighted and use the authority to clean up the blight. Now, though, everything is declared blighted and our city wants to make use of unblighted land to get revenues from bond issuances up front. But that creates debt and the need to service the debt. And we are coming up against violations of constitutional rights to develop property. We are threatening to use eminent domain to get land to profit developers to see improvements to redirect tax revenue to satisfy that debt we are creating. It is a vicious cycle.”
The problem, Robles said, was that Schwab’s formula was to tied into future debt and did not avail the city of other options to deal with its funding necessities.
“Instead of using the redevelopment agency as an opportunistic quick fix, I would propose that we approach the state legislature and request that certain revenues due to the city be made available and be rerouted to the general fund. By doing that you reestablish transparency because if there is going to be any kind of bond issuance the citizens get to vote on it and we would save money because we are not going into debt and we do not have to pay interest on money we are borrowing.”
Robles said that unfortunately, the issue had been made too complicated by past practices of
the city for residents to comprehend what they had been gotten into by their civic leaders. “The function of the redevelopment agency gets real esoteric but the most simple thing to say is you have yourselves in a situation where you have to borrow money and pay high interest to get the service you have. An alternative is to negotiate with the legislature to get a major portion of the money now being taken up by the redevelopment agency redesignated as simple property tax revenue to be put into our general fund. By that you report what is happening, you have transparency and they cannot use backroom votes and deals to issue bonds and create debt. Those votes then must go to a vote of the people. If local government has gotten so complex the citizens can’t understand it, then it is time to change it and make it simple again.”
Robles said that Schwab had created a circumstance where no one understood the situation sufficiently to ask meaningful questions. “Expecting people who work all day who come from circles other than high levels of finance to understand and deal with this is not realistic. People who do not understand this are trying to defend Tom Schwab and the past council that ratified this as a policy. Yet, we can give money away to developers who are wealthy and we cannot afford to provide basic services for our youth in this town.”
Things will only get worse, Robles predicted, as there is no chance that the city will grow out of its current circumstance. “We are in a period of time - within the next five to ten years – where there will be no more money. No new housing is going to be built. The bubble has burst. We must retrench back to pre-1999 levels. The reality at this point is there is not enough money available to service the debt we have accumulated for ourselves and run the city.”
Robles is not running directly against Schwab in this year’s race. She is vying for a two year term necessitated by the resignation of former councilman Jim Miller. Schwab is running for a four year term represented by the position now held by councilwoman Bea Cortes. But Robles said she is vying against someone who is part of the Old Guard that supports Schwab. It will take someone who understands the problem to fix it, Robles said. She suggested that her opponent in the race, planning commissioner Darcy McNaboe, is part of the establishment that blindly supported Schwab.
“The group Tom Schwab was a part of put the city incrementally into a redevelopment project area,” she said. “They say we have now gotten into a position where we are fully in a redevelopment project area and they are afraid that without the redevelopment agency they will have to dissolve the city. That is not true. I worked for 25 years in government and 20 of those years were spent working on complex issues in government relating to the running of special districts not unlike running a city. I worked on getting services to special districts in the largest county in the nation [San Bernardino County]. I understand bonds and assessment districts and
alternate sources of getting projects done. There are methods of getting funding other than going into debt for thirty years and spending half of our tax money on interest payments. City’s have certain advantages. We provide services not for a profit. We do not have to answer to stockholders. We should not artificially create a circumstance where we are answerable to bondholders. I do not know my opponent [McNaboe] but my sentiment is this is part of the Tom Schwab slate and she represents more of the same and keeping the status quo. My feeling she is representing the status quo and special interests.”
In this vein, Robles acknowledge having lodged a complaint with the Fair Political Practices Commission against the Grand Terrace Area Chamber of Commerce relating to its use of its publication – The Blue Mountain Outlook – to promote certain candidates. The basis of that complaint, she said, was that the chamber receives money from the city to publish the Outlook and that such use of taxpayer money to promote political candidacies is illegal. She said she felt McNaboe, a chamber board member, was unfairly using the chamber as a promotional device in her campaign.
Robles said she believed the chamber constituted a special interest and that its forums for the candidates were slanted in favor of those candidates willing to perpetuate the city’s subsidization of the chamber, which she opposes.
Robles said she is in favor of way greater transparency at City Hall than has been the norm over the years.
“The main thing for me is that I want to get the citizens involved and have them understand the issues,” she said. “If that means we take longer to deliberate on items before us, than I think we should do that. I think we should go beyond the 72 hour requirement for dropping the agenda before the public. We should make it available as much as a week ahead of time. I want to change how the public gets its information about what action the city is going to take on its behalf.”
Robles said she is the superior choice for election to the council. “I think that at this time and with the issues facing us, my work experience and my education are a perfect fit for Grand Terrace right now. I don’t think degrees and master’s in public administration should be required, but when you get into this arcane of a way of running government, you need to have someone who knows what is being done to correct it and simplify it.”
Robles was born in San Bernardino and graduated from San Gorgonio High School. She
obtained a bachelor of arts degree in business administration from Redlands University and took her master’s from Cal State San Bernardino. She is married with three adult children.
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Court Filing Contradicts Cortes’ Form 700s
The following quote from the court documents was not included in the story. "Throughout our relationship, and even prior to the marriage, Mr. Moore promised that he would take care of me financially and make sure I was secure and that I was to able to maintain the kind of lifestyle that he and I enjoyed together and that included having spending money, certainly having a nicer home than the one I have in Grand Terrace and ability to travel and go out."
The Sentinel:
Grand Terrace City Councilwoman Bea Cortes consistently failed to disclose a significant portion of the income she received on the financial interest disclosure forms she was required to fill out throughout her tenure as an elected official, court documents Cortes herself filed in conjunction with her divorce show.
Cortes, who was elected handily in 2002 and reelected by a comfortable margin in 2006, is involved in a campaign for reelection in the upcoming November 2 election and has come under exacting scrutiny this election season.
Cortes succeeded in avoiding any major controversy during her first six years in office but courted acrimony in 2008 when she worked in concert with then-acting city manager Steve Berry to spark an investigation into her then-council colleague Jim Miller. Miller was later charged with a violation of state conflict-of-interest law for voting with the rest of the council to approve consent calendar items on the city council agendas that affirmed payments made to the
Grand Terrace City News for municipal legal notices that ran in that newspaper. The City News is a publication owned by Miller’s wife.
The popular Miller was eventually forced to resign his council position as a consequence of the ensuing controversy.
Cortes’ involvement in Miller’s political demise, along with reports that she had engaged in an affair with San Bernardino County District Attorney Mike Ramos, a married man, significantly undercut her popularity in Grand Terrace and has earned her the enmity of a contingent of that city’s residents. Several of those have carried out a concerted effort to prevent her reelection. That campaign has included intensive research of the public record for any potentially derogatory information relating to Cortes.
Perhaps the most damaging information unearthed relates to Cortes’ 2008 divorce from James Moore. The Moore/Cortes union lasted a single day, from February 21, 2008 to February 22, 2008. Previous reports were that the marriage had been annulled. But documents filed with the San Bernardino County Superior Court show that the marriage ended in a divorce, initiated by Cortes. One of the documents filed in conjunction with the matter reveals that Cortes was receiving money from Moore from shortly after their relationship initiated in 1999 continuing up until the time of their marriage – including the first six years that Cortes was serving on the city council.
Moore has been described as a wealthy Newport Beach entrepreneur.
In a declaration Cortes signed under penalty of perjury on August 21, 2008 and filed with the court on August 22, 2008, Cortes stated, “Mr. Moore and I have been in a relationship since 1999. He insisted throughout our relationship that I limit my professional and business activities so that I would be available to him. He consistently gave me between $1,000 and $3,000 per month prior to our marriage. He also bought me a Mercedes automobile.”
The declaration continues, “Prior to our marriage, he made it very clear to me that if we married, that he would provide for all of my needs, including a home, automobiles, travel, food, etc., and that I would have in addition to all of that, I would minimally have every week $500 in spending money (sic). He would also pay all expenses connected with my daughter who had graduated from college, in working on her Masters Degree and he would provide her with a Toyota automobile. He specifically indicated it would be up to approximately a $30,000 automobile.
“He also promised me,” the declaration continues, “that I would have an interest in an apartment partnership he has in Texas and that I would receive $1,000,000 as an irrevocable heir to his estate.”
Cortes made the declaration as part of a motion to convince the court to increase the amount of alimony to be paid to her.
In California, elected and other government officials are required to annually fill out statements of economic interest, known as California Form 700s. In her Form 700s filed with the Grand Terrace city clerk’s office for the years 2002 until 2008, Cortes makes no mention whatsoever of any money she received from Moore. Those documents require the signature of the office holder and contain an affirmation, under the penalty of perjury, that the information contained therein is accurate.
District attorney Mike Ramos in 2009 filed felony charges against former assistant assessor Jim Erwin for failing to disclose on his Form 700 filed in 2008 to cover the year of 2007 that he had received $14,265 worth of travel, accommodations and gifts from a real estate developer. Those gifts included airline tickets to New York and Washington D.C., hotel accommodations there and a Rolex watch. Ramos filed ten felony counts against Erwin for his failure to disclose those gifts.
No such charges have been lodged against Cortes, who was widely reported to have had a physical relationship with Ramos. Ramos has acknowledged knowing Cortes and being associated with her politically but has declined to respond to questions about the exact nature of his personal involvement with her. Previously, Cortes said her relationship with Ramos was “friendly” and “political.” She declined at that time, December 2009, to enlarge upon the exact nature of her relationship with the district attorney.
Cortes did not return phone calls seeking comment on the apparent discrepancy between her declaration filed in conjunction with her divorce and her Form 700s.
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See the Documents that support this story below in the blog.
