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Scandal in San Fernando: Mayor Divulges Affair with Fellow Council Member During Meeting

Fasten your seat belts. Here at CityNews we almost don’t know where to start when it comes to the shenanigans going on in the city of San Fernando. Let’s just say that it’s never a good sign when city council business resembles more of a soap opera than a functioning local government. We’re not sure what compelled Mayor Mario Hernandez to fire off a few truth bombs, but somehow he decided a city council meeting was the proper setting for revealing a series of very personal details. To start, the mayor noted that he had filed for personal and corporate bankruptcy and then stated that he was separated from his wife. If that wasn’t already awkward, then guess again. Mayor Hernandez went on to say that he had been having an affair with a fellow council member. The mayor stated, “I’d like to put out there, ‘to squash the rumors,’ that yes, I have been in a relationship with Councilwoman (Maribel) De La Torre.” It is one thing to admit an affair during a council meeting, but the admission occurred while the mayor’s wife was sitting in the front row. Yikes. In response, the mayor’s wife stood up and commented that they were still married and she was ultimately escorted from the chambers.

And furthermore, we’re not so sure about the logic of “squashing” a rumor few probably knew about to begin with by telling the truth during a council meeting. Here is audio of the council meeting. You can scroll to minute 64:00 out of 66:26 to hear the mayor’s comments:

San Fernando city council minutes by Los Angeles Times

The drama we’ve relayed so far doesn’t even capture all of the intrigue going on in this city. Here’s a breakdown in the others scandals playing out in San Fernando:

• The police chief is on leave for having sex with a much younger cadet
• A police dispatcher was caught exposing himself; and
• A council woman reportedly had a sexual affair with one of the police department’s sergeants and there are concerns her votes regarding the department were therefore swayed by a conflict of interest

More details can be found at the San Fernando Sun here. The council reportedly is slated to meet again next week, and we’re guessing a lot more people will be paying attention.

Court Strikes Down City’s Occupancy Tax for Online Companies; Fight’s Latest Development

For years now cities in multiple states across the country have set their sights on targeting online travel companies like Expedia as a way to recuperate millions in lodging taxes that local governments argue are unfairly kept by such companies due to a tax loophole. The root of the matter is that online companies collect taxes from customers on the retail price of hotel rooms, but only pay cities the tax on the wholesale price. The question is whether online travel companies should pay taxes based on the wholesale price or the price consumers actually pay the companies for lodging. More than 80 municipalities have filed lawsuits in 22 states across the country, but the Denver Post points out that “Several recent court decisions support the online travel companies while some states such as Missouri have forged legislation preventing local cities and towns from taxing the online travel companies. California courts in three cases recently ruled in favor of online travel companies.” Many cases are still pending and courts have often avoided forcing online companies to pay back taxes to cities.

The latest court update stems from New York City. The Big Apple passed a law in 2009 that required online travel companies to pay taxes on the price consumers pay for rooms. However, this week an appeals court struck down the law, thereby reversing a trial court decision. The appellate court declared the ordinance unconstitutional. The ruling is sure to cost New York millions in revenue, much like other cities who have taken up similar legal battles. Reuters reports:

“But the ruling means that the city may still owe a refund of the taxes collected on the sites' fees during that year. The exact amount was unavailable Tuesday, but city projections for the law prior to its approval by the City Council estimated $4 million in new annual revenues. ‘We are very disappointed in the decision and are considering all of our legal options,’ said city attorney Joshua Wolf.”

The record against these sites has been a mixed bag, but more often than not, courts have ruled in favor of the travel companies---doing no favors for cash-strapped cities eager for revenues.

The Cost of Doing Business: Study Ranks Most Expensive Cities in CA for Business

The 17th annual Kosmont-Rose Institute Cost of Doing Business Survey has been released by Claremont McKenna College’s Rose Institute of State & Local Government and the rankings determine which cities in California, as well as the nation, are the most expensive for doing business. The rankings were based on business fees and a variety of tax rates. Larry Kosmont, President and CEO of Kosmont Companies, which partnered on the study, commented that “California puts its own cities in a difficult spot. If a municipality succeeds in attracting a new or expanding firm, that new employer is inevitably squeezed by increasing local fees and the underlying cost of the state’s high tax schedule. The truth is, companies want to be in California. But somewhere a CEO is pondering, ‘how small an office in California can I get away with and still service that market?’ The sales office then goes up in LA or the Bay Area, but the bulk of jobs and back office functions end up in Tennessee or Texas.”

The most expensive cities for business in CA are ranked as follows:

• Berkeley
• Beverly Hills
• Culver City
• Inglewood
• Los Angeles
• Oakland
• San Bernardino
• San Francisco
• Santa Monica

The least expensive cities for business in CA are as follows:

• Apple Valley
• Costa Mesa
• Dos Palos
• Hesperia
• Moorpark
• Roseville
• Sutter Creek
• Unincorporated El Dorado County
• Unincorporated Lake County

Other highlights from the study include:

• California remains an expensive state in which to do business, even after the state sales tax rate dropped by 1% after July 1, 2011.
• Los Angeles County and the Bay Area remain some of the most expensive areas in the state, while San Diego is one of the most affordable for business.
• All of the least expensive cities are located west of the Mississippi River, with five cities in Texas and eight in Washington.
• Seventeen of the twenty least expensive cities are located in states that do not impose income tax, and two are located in states that do not impose sales tax.

 

Recall Petition for Mayor Quan to Hit Oakland Streets Any Day Now

It’s been a bumpy road for embattled Oakland Mayor Jean Quan and it was announced this week that a recall campaign has been cleared to hit the pavement for signatures. Once signature-gatherers begin circulating petitions, they will have 160 days to collect 19,800 signatures. Quan reportedly has an approval rating below 20% and has faced anger from both Occupy protesters and businesses for the Mayor’s handling of the demonstrations. The mayor is basically getting it from all angles and has seen members of her administration resign and the defeat of a parcel tax that the mayor had argued was crucial for resolving the city’s budget woes. In an interview with KQED, Quan commented the following about the recall: “I hear that sour grapes of certain candidates that lost in the past might be funding the signatures. I think that’s a shame. [...] A recall can be very divisive and it can be very time, energy and money consuming, so most business people I’ve talked to have said they’re not supporting the recall.”

The recall petition lists the following as grounds for the recall:

“The people of Oakland seek to recall Mayor Quan because she has willfully ignored the City's most pressing issue: public safety. As crime continues throughout our city, she has offered no rational solution to mitigate the chaos. She ignored the call of Oakland residents to significantly increase the number of police officers and instead supported a regressive 11 million dollar parcel tax on top of the existing Measure Y parcel tax of 200 million dollars. Moreover, she is squandering an opportunity to shape the largest development project in Oakland's history -the Oakland A.rmy Base. After nearly a year in office she has exhibited no leadership or insight to develop and implement a sustainable solution to our growing unemployment and depressed economic development. The management of these requisite elements requires a competent, adept civic leader with a vision of a vibrant prosperous and safe Oakland. We have no confidence in her ability to lead, listen or collaborate. To stand idly by is to abandon Oakland's rich tradition of ingenuity, cooperation and good governance. This recall is not rendered lightly; for the survival and future of our City, we demand a new Mayor."

You can read the full petition here. Reportedly there is a divide between the legally designated head of the recall effort and a second group named the Committee to Recall Jean Quan and Restore Oakland. Quan has been in office for less than a year.

San Fran, You’ve Been Served: McDonald’s Works Around City’s Happy Meal Ban

The city of San Francisco attracted a lot of attention when it ultimately approved the Healthy Food Incentives Ordinance, and officials even overrode a veto from then-Mayor Gavin Newsom to get the law on the books. This ordinance, which will officially go into effect this week, is better known as the ban on happy meal toys. Basically, restaurants like McDonald’s are banned from providing free toys with kid’s meals if they don’t meet certain nutritional standards. The scrutiny that the city attracted for the law looks as though it will be all for nothing, as McDonald’s franchises in San Francisco found a very easy way to get around the law: charge 10 cents for the toy. Funnily enough, due to the law, McDonald’s has made some rules of its own, namely a customer must buy the Happy Meal if they want to pay 10 cents for the toy (the 10 cents will go toward Ronald McDonald House charities). So if a kid wants a toy, the parent won’t be able to select a healthy item and then just purchase the toy. It's the slippery slope (or should we say "greasy" slope) of nanny-state policies. The Chronicle reports:

“The 10-cent fee came from surveying customers, said Danya Proud, director of media relations for McDonald's USA. ‘They told us 10 cents is fair and reasonable,’ especially after being told the money would go to a charity, she said.”

Even the Daily Show with Jon Stewart poked fun of the city’s ban, video of which you can see below:

The Daily Show
Get More: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

Richmond Councilman Wants Peace and Quiet: Train Horn Dispute with FRA; Tells Off Staffer

The city of Richmond has taken issue with the use of loud train horns and over the years has battled the Federal Railway Administration over the issue. In what was clearly perceived as a patronizing and insulting offer, an FRA staffer suggested hosting a community meeting about why train horns are used, and in response Richmond City Councilman Tom Butt gave the staffer a piece of his mind. You can read Butt’s email below:

“Ms. Dickson,

While I appreciate the offer of an informational meeting about train horns, I respectfully suggest that explaining horn use it is not what is really needed.

I think people understand what a train horn is, and the City of Richmond probably knows more than any city in California how to establish Quiet Zones.

If there is going to be a meeting, it should include the following:

• Why the FRA has never taken an enforcement action against a Quiet Zone violator in Richmond.
• Why the FRA has set up rules that require cities to pay hundreds of thousands of dollars just to silence horns at one grade crossing.
• Why the FRA allows railroads to use horn signals in yards at night when radios are clearly acceptable.
• Make the top managers from BNSF come and explain why their engineers continually lay on their horns when they don’t have to.
• Make the businesses along Canal Boulevard come and explain to the people of Richmond why their convenience is more important than people’s sleep.
• Make the CPUC come and explain why they exercise even less flexibility than the FRA with respect to train horns.
• Invite our state legislators to explain why they can’t rein in the CPUC with respect to train horns and protect public health.
• Invite our congressional delegation to explain why Congress doesn’t take action to protect people against the health impacts of nighttime train horn use.

If we could get these people and these items on the agenda, it would have the possibility of being a really productive meeting. Otherwise, it would probably be a waste of time.

Tom Butt, Vice-Mayor, City of Richmond
Richmond City Councilman”

All We Know about City Government We Learned From (iPhone) SimCity

By Robb Korinke

Were CityNews staff members the only ones with an excess of time over the holiday weekend?  At any rate, while not a new diversion, SimCity for the iPhone gets an overdue review from one CityNews editor, who fashioned a thriving metropolis between meals and football this holiday weekend.

For the uninitiated, the objective of SimCity is to build and design a city, acting out the entirety of the Council-Manager role, with parts Planner and Monarch laced in. You can control everything from zoning to tax policy, create landmarks from the Brandenburg Gate to, in one version of the game, Walnut Creek's California Center.  SimCity for iPhone is roughly the tenth offering of the City Development game from Electronic Arts, and as long-time government nerds, we've played most of them even going back as far as the Commodore 64 version released lo these many years ago.

What did we learn in guiding our humble village, Funkytown, into a thriving Megaoplis of 1.1 million residents?  Some lessons:

--You can't please everybody. At one point, Funkytown held the distinction of having nearly zero taxes, being the "Cleanest City" in the region, robust infrastructure ranging from Fusion Power to 10,000 acres of parkland and a free subway, and still residents and business leaders complained.  Sheesh!

--Industry Matters. For all of our dreams of a Gotham of gleaming skyscrapers, the city's economy collapsed without substantial industrial development and jobs for the "Sims" who couldn't seem to make it through our various universities.  Not everyone wants to work in a cubicle, evidently.

-- Don't Waste Money.  In one of many amusing dynamics of the game, overfunding City Departments yields few benefits while angering City residents.  No sooner did a briefing from our Transportation Director boasting of 'velvet subway' seats arrive than angry petitioners flooded our mayor's office with critiques of our spending policies.  No one gave us credit for balancing the budget and building a top-tier Performing Arts Center.

-- High-End Residents Won't Pay Taxes.  Political commentary or not, one clear dynamic of the game is that wealthy residents and high-end commercial development simply do not materialize until tax rates are low... non-existent in some cases.  At one point, we were able to generate a surplus by zeroing out taxes on residential and commercial, while imposing nearly Soviet-level taxes on industry.

-- Listen to Your City Staff.  OK, so they all want something (all the time), but woe is the Mayor/Manager/King who ignores them.

Now if we could just figure out what to do with the "Occupy Funkytown" movement.

Anybody else playing SimCity on the iphone?  First person to post a screenshot on our CityNews Facebook page with a city larger than our bustling 1.1 Million gets a free CityNews mug...

Strong Cities, Strong State Campaign Hits the 50 Mark; Gilroy and Laguna Hills the Latest

The Strong Cities, Strong State campaign now has 50 cities! Gilroy, sitting at the very southern tip of the San Francisco Bay Area in Santa Clara County, is the 50th city featured on the website. The city enjoys a beautiful and unique location within its valley setting. Despite its growth, Gilroy continues to harbor a rural and historic character, especially in the older neighborhoods where buildings dating back to the mid-1800s can be found. Today, Gilroy’s growth is closely linked with economic activity in the Bay Area as a whole, and with Silicon Valley in particular. Gilroy’s success stories include the following:

• The Gilroy Garlic Festival: The Gilroy Garlic Festival is one of the largest food festivals in the United States and held annually on the last full weekend in July at Christmas Hill Park. The three day festival is attended by well over 100,000 garlic lovers.
• Gilroy Gardens: This one-of-a-kind park is unique to California as it is designed to educate guests and to foster a greater appreciation of horticulture.
• Shopping Destination: Gilroy is also known for its Premium Outlets, with more than 150 stores offering a unique shopping experience at name brand, national outlets at a discounted price.

Read more, see photos, and connect with the city here.

Orange County’s Laguna Hills is today’s newest city on “Strong Cities | Strong State.” This city of only 6.6 square miles is home to 30,344 proud residents. Most of the areas in the City have a distinctive residential character, yet the City has a very strong commercial base as well. In September of 2000, the City grew by another 150 acres as a result of the successful annexation of residential neighborhoods identified as the Westside Area. Laguna Hills’s success stories include the following:

• Public Art and Cultural History: This is an innovative preservation project that also enhances the cultural identity and history of the City.
• Community Center and Sports Complex: A key motivation behind the City’s incorporation effort was to build community parks and recreational facilities for local residents, which were lacking at the time.
• Award Winning Circle of Friends Program: The award-winning “Circle of Friends” program is designed for individuals with disabilities over the age of thirteen. The activities of the program help foster social skills, provide athletic events, increase leisure opportunities, and create lasting friendships while enhancing developmental needs for teens and adults of all abilities.

Read more, see photos, and connect with the city here.

Richard Dixon, Former SCAG President and Lake Forest Councilman, Passes Away at 63

We have sad news to relay here at CityNews, as former Lake Forest City Councilman Richard Dixon has died at the age of 63. Dixon was elected to the city’s inaugural council in 1991 and also served as mayor. In addition to being a part of the city's original City Council in 1991, Dixon was re-elected in 1994, 1998, 2002 and 2006. Dixon was a longtime board member of the League of Cities and served as President of SCAG. Lake Forest Mayor Peter Herzog, who became good friends with Dixon during their course of service, commented that “Everything that has been accomplished, he's been an important part of. The changes and improvements here are part of his legacy. Transportation was a key focus for him and with that his impact went far beyond the city. He was most proud of being a founding father of a joint power authority that helped defeat the idea of an airport at the former El Toro MCAS."

Dixon was also a founding member of the Lake Forest Chamber of Commerce and once received the Small Business of the Year Award from the South Orange County Chamber of Commerce.

The OC Register reports that “Dixon is survived by his mother and two sons. A memorial service for him is being planned in Lake Forest on Dec. 10.” More about his distinguished career can be found here.

Judge Rules State Can’t Raid First 5 Funds from Counties; Deemed Illegal Maneuver

Among the “legally questionable maneuvers” the governor considered under the state budget was not only the elimination of redevelopment but also the taking of $1 billion from First 5 commissions. The First 5 programs are funded by Proposition 10, a 50 cents-a-pack cigarette tax voters approved in 1998. While lawsuits from various counties ultimately caused legislators to back away from the idea as a budget solution, the governor has been defending the proposal in court. If the law had been enacted, counties would have had to turn over millions of dollars to the state. Well, a judge has now ruled that taking millions in these local funds to patch up the state budget is illegal (do those arguments sound familiar?). The judge wrote, “To claim that transferring decision-making from local communities to the state legislature is 'consistent with' Prop 10 is like asking the court to find that black means white.” Perhaps in a small way the ruling bodes well for Prop 22 and the fate of the redevelopment lawsuit, as the state's hands have been slapped away from the cookie jar. The governor’s administration has not announced yet whether it will appeal the ruling.