Happenings: Open Space Saga, Part 458 (at least)

Last July, Claritans gave their support to establishing an Open Space Preservation District. Since then, things have gotten progressively more complicated with no end in sight. Below, Jim Farley--Open Space watchdog extraordinaire--details the newest chapter in this story. But first, I think we could do with a little recap.

1. In 2007, a measure to establish an Open Space Preservation District was presented. Open space was to be funded by a $25/year assessment on home owners. The assessment was to potentially increase by $1 per year as well.

2. Roughly similar attempts to have property owners foot the bill for open space acquisition historically failed, as in 2005.

3. This most recent attempt was much better funded. Scott Wilk, who needs no introduction, ran the campaign. Where the money to support Wilk's efforts came from remains unclear (or at least I haven't heard anything about it).

4. When it came time to vote, the open space initiative was approved by a large majority.

5. It was discovered soon after the vote that 7 large property owners (e.g. Whitaker-Bermite and a few developers) held about 25% of the voting power. Their ballots were supposed to be weighted based on how much of the assessment they would pay. However, the large property owners were being assessed as little as 6% of the assessment amount used to weight their votes. This troubling voting scheme is dictated, apparently, by Proposition 218. Click here for more details and figures. For the City's interpretation, click here[1].

6. The City was charged with appointing an Open Space Financial Accountability & Audit Panel. Despite having five qualified applicants by the first deadline, the City chose to extend the process to accommodate [supposedly] those affected by fires.

7. But all in all, about $35 million worth of open space should be a good thing, right?

Actually, #7 is exactly the problem. Jim Farley discusses a memo below that says parks and park facilities, not just open space, would be valid uses of the assessment money. [NOTE: the City's website says 10% or less of the assessment will go towards "improved active parkland"; where park facilities fit in I'm unsure]

Last years passage of the Open Space Preservation District happened largely because the voters were led to believe that revenue from the assessment could be used solely for the purchase of vacant land to be held into perpetuity as open space. The voters were lied to.

Here is the background:

In 2007 the property owners in the City of Santa Clarita approved the Open Space Preservation District that applies an assessment to their property tax to be used to purchase vacant land. The measure was essentially the same as a measure that was voted down by the property owners in 2005. In the campaign to convince the citizens of Santa Clarita to vote yes on the Open Space Preservation District the number one selling point used was that the measure “was different this time” (2007 vs. 2005). In 2005 the measure failed largely because the money from the assessment could be used for any purpose within the cities Open Space, Park, and Parkland program. The money could have been used for maintenance or construction of facilities in existing parks in addition to being used to purchase open space. The “difference”, being sold in 2007, was the assurance that the money from the assessment could only be used for the purchase of vacant land. This was being promoted by council members, city employees, and the Open Space Committee. The promotion was instrumental in moving enough voters from their 2005 NO vote to a 2007 YES vote and helped to ensure the measures passage. The promotion was also a lie.

The lie has now been exposed in a memorandum to Santa Clarita Councilmembers from Special Legal Counsel Maryann Goodkind dated November 27, 2007. The memorandum was a response to a question Councilmember Boydston raised concerning the use of funds for the district. The memorandum states “The short answer is that Assessment District funds may be used to construct park facilities by law” [emphasis added]. In order to ensure that the funds are used solely for the purchase of vacant land the council must approve the issuance of Certificates of Participation for that purpose. Certificates of Participation (COP) are a financial instrument used by the city to borrow the money for land acquisition, and are paid back by the 30 year revenue stream from the property tax assessment. When they are issued, and only then, do they by contract tie up the money only to be used for the purchase of vacant land.

On November 13, 2007 the council approved the issuance of COP’s in the amount of $17,200,000. This is about one half of the projected revenue stream of approximately 35 million dollars. The difference can still be used for any other purpose within the Park and Parkland program. Why is the city not moving forward and issuing the COP’s for all of the money so it will be used only for the acquisition of land as promised? The city has finally seated the Financial Accountability and Audit Panel for the preservation district. While I was not chosen to serve on the panel I have relayed this information to panel member Alan Ferdman so the panel can be diligent in following up on this.

My organization had many dedicated people who were committed to getting the true message to the citizens on this measure. It is unconscionable that there were those in the city who were willing to do anything to see this measure approved, even lying to their constituents. I spoke early on during the campaign about the lack of trust coming from our city on this issue. The lack of trust continues. This is not likely to change with the council election coming up. All candidates have expressed their endorsement of this measure. Most have bragged that they were active participants in bring this measure to the city.

Jim Farley
jimfarey@noscassessmenttax.com

Farley is right that this memo is troubling. I'm not sure the lies were intentional, though; it would be easy to inadvertantly overlook some of the legal ramifications of the assessment language. However, there’s a simple solution: at the next City Council meeting, each member of council could clarify their position on what the assessment money should be used for. Saying something as simple as “Even though the money could be used for other purposes, I’m committed to using it to acquire open space only.” This would allow us to chalk up the legal complexities of what assessment funds can purchase to nothing more than unintentional oversight.

As the current chapter in the on-going open space debacle, and I’m sure we’ll be seeing the memo mentioned in letters to the editor and at the next City Council meeting. As for the next chapter, I’d like to see more attention paid to how land acquisitions are being prioritized, a hugely important consideration.


[1]They use some questionable reasoning. For example, just because one group represents 65% of voters doesn't mean they "control the vote"--things are a little more complex than that.

Happenings: Open Space Questions Linger

Jim Farley voices his concerns in the video above[1].

The continuing controversy over the Open Space Preservation District/Assessment has been largely eclipsed by the more palpable controversy over Henry Mayo. In case you have short-term memory issues, I'm referring to the recently approved plan to have homeowners pay $25/year towards preserving open space in and around the City of Santa Clarita. Proponents claimed it was a step towards controlling sprawl and saving wilderness. Opponents, in turn, called it an unnecessary burden on homeowners who would reap none of the benefits bought with their tax dollars.

Jim Farley led the opposition alongside Sterling King, and he [Jim] recently sent me a copy of a letter he's sending to the City regarding voting "irregularities." (Mr. Wilson of SCVTalk has posted this letter in its entirety here.) His concerns regard the fact that votes on the measure were supposed to be weighted based on how much of the assessment a property owner would pay. It seems that 7 developers/landowners were given votes weighted for $148,737 in assessments, but they'll pay only $9,413--just 6% of the figure used to determine their voting power. Jim Farley summarized the figures he gleaned from City voting records below.

Farley says that obtaining these data was no easy task: "The ballots were found by others in my group painstakingly thumbing through all of the ballots to find them. Then it required an additional effort to get the worksheets showing the voted vs actual assessment for the 7 developers."

So What Does It All Mean?

1. Most Claritans wanted the measure to pass, and it did.

2. Just seven major land-holders had a huge impact on the measure; they represented a quarter of the weighted votes.

3. One would expect that the voting assessment would correspond with the actual assessment, but this does not seem to be the case for "the Big 7." Collectively, they cast a vote weighted 15-times more than they'll actually pay. At some point, houses built on their land holdings will presumably make up the difference, but that could be a long way off.

4. Still, if more voters had returned their ballots, the power of the developers would have been diminished. Of course, it's easier to turn in one vote worth $31,000 than to gather 1,240 ballots from homeowners with votes worth only $25 each.

In the above chart, "Small Property Owners" include plain old homeowners and other landowners whose voting assessments were valued less than the 7 Large Property Owners. The mean voting assessment for small property owners was about $30. The mean voting assessment for the 7 large property owners was about $21,000.

Overall, Claritans are left to ponder whether the system by which Open Space votes were counted matters. SCV got what it wanted in the end, and that will be fine for some--no need to dissect a system that gave the desired result. Others, however, will be unable to dismiss the discrepancy between votes cast and dollars paid so easily. Indeed, the call for the City to become more transparent has been fueled by actions just like this voting peculiarity.

Most immediately, though, the Financial Accountability and Audit Panel for the Open Space District is being assembled. As Farley suggests, "If the council chooses one or more of us 'outsiders' it would go a long way in assuring the citizens that their money is being spent properly. It will also rebuild trust with the community on this issue."

[1]Filmed by Sterling King--who else? Taken at the September 12th City Council meeting.
[2]Throughout, I'm referring to numbers that Jim Farley has provided me. I have no reason to doubt his figures, but if you spot a mistake please let me know.