Resolution No. 80521
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RESOLUTION NO. 8052
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON CLARIFYING CERTAIN CITY MINUTES
WHEREAS, the City of Vernon (the "City") is a Charter City
and exercises its authority consistent with its Charter and the State
of California; and
WHEREAS, the Constitution of the State of California
provides a Charter City with substantial discretion in making
decisions on home -rule issues; and
WHEREAS, Leonis C. Malburg has been the Mayor of the City of
Vernon since 1974; and
WHEREAS, the Mayor owns certain real property in the City
that he rents to various tenants, and has other financial interests;
and
WHEREAS, the California Political Reform Act ("PRA")
(Government Code §§ 81000 - 91014, et. seq.), requires all public
officials in California to disclose their economic interests; and
WHEREAS, the Fair Political Practices Commission ("FPPC")
has provided forms (previously Form 721 and now Form 700) for purposes
of such disclosures; and
WHEREAS, since the Mayor became a City of Vernon elected
official, he has filed the required FPPC forms with the FPPC and the
City Clerk of the City of Vernon; and
WHEREAS, certain real property that the Mayor owns in the
City has been the subject of recent Public Records Act requests,
including the following:
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1. 3094 and 3200 East Vernon Avenue (property rented by
Clougherty Packing/J BLAK/Farmer John ("Clougherty
Packing"))
2. 2833 Leonis Boulevard (property rented by McKinney
Travers Oncor Inc. ("McKinney Travers"))
3. 3801 Santa Fe Avenue (property rented by the Vernon
Chamber of Commerce)
4. 2833 Leonis Boulevard (property rented by Cleveland
Wrecking Company and Hickey Properties)
5. 4323 Santa Fe Avenue (property condemned for City of
Vernon City Hall addition in 1991);
and
WHEREAS, the Mayor is required by the PRA (a) to disclose his
real property interests and his tenants as sources of income and (b) to
disqualify himself with respect to the making of all governmental
decisions in which he has a financial conflict of interest; and
WHEREAS, the Mayor has properly disclosed the interests in
his tenants that are referred to in the Public Records Act requests in
his 700 Forms; and
WHEREAS, the only interest that was not disclosed was the
landlord -tenant relationship that the Mayor had established in January
1999, with Hickey Properties because Hickey Properties did not provide
the Mayor with more than the limit of $10,000 of income per year that
was established by the FPPC in Form 700 in order to be disclosable; and
WHEREAS, Government Code § 1090 also prohibits the Mayor and
any other public official in California from being financially
interested in any contract made while serving in his official capacity,'
or by any body or board of which he is a member; and
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WHEREAS, the Mayor has advised the City Council that he has.
never participated in making any contract in which he had a prohibited
financial interest; and
WHEREAS, the City Council is not aware of any instance in
which the Mayor has participated in making a contract in which he has a
financial interest; and
WHEREAS, the Mayor has advised the City Clerk and the City
Administrator that he has reviewed the City Council minutes, the
Redevelopment Agency ("RDA") minutes and the Industrial Development
Authority ("IDA") minutes for the meetings during which all of the
transactions involving his tenants were considered or approved; and
WHEREAS, the Mayor has advised the City Clerk and the City
Council that the City, the RDA and IDA minutes support the Mayor's
belief and recollection that he has always abstained from voting on, or
participating in the making of decisions in which he had a financial
interest; and
WHEREAS, the FPPC has determined that if a public official
abstains from voting on a decision by the public agency, he has not
participated in the matter; and
WHEREAS, the Mayor has advised that the City Council minutes
for September 8, 1998, are unclear and has requested that the City
clarify the minutes to properly reflect his intent and his recollection
that he abstained on the relevant matter reflected in those minutes;
and
WHEREAS, the Mayor has requested that the remaining members
of the City Council review the record and determine, on their own,
whether such minutes should be clarified; and
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WHEREAS, the City Council, RDA and IDA records show the
following with respect to the Mayor interests:
The City's Acquisition of 4323 Santa Fe Avenue
WHEREAS, in 1991, the City was considering the expansion of
the Vernon City Hall and believed that it would be in the public
interest to acquire property that was adjacent to the existing City
Hall, 4323 Santa Fe Avenue, and which was owned by the Mayor; and
WHEREAS, the Mayor's interest in the subject property was at
all relevant times made known to other members of the City Council as
reflected in the Mayor's annual FPPC 700 Forms filed with the City; and
WHEREAS, courts have ruled that condemnation proceedings
involving the acquisition of a public official's real property will not'.
trigger Government Code § 1090 where the public official disqualifies
himself from the process and the sale of the property occurs by
operation of law; and
WHEREAS, the City Attorney for the City of Vernon advised the
Mayor on January 15, 1991, that the City would be initiating a
condemnation proceeding against the Mayor's property and that the Mayor
would be required to abstain from such proceedings; and
WHEREAS, on February 5, 1991, the City Council passed a
Resolution of Necessity to acquire the Mayor's real property at 4323
Santa Fe Avenue through a condemnation proceeding; and
WHEREAS, the City Council minutes of January 31, 1991,
indicate that such resolution was passed by a four to nothing vote
with the Mayor abstaining; and
WHEREAS, the condemnation case was filed in the Los Angeles
County Superior Court, Case No. BC 021711, and the Superior Court
determined the fair market value of the subject property and held that
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Ithe transaction did not violate any of the State's conflict of interest
flaws; and
WHEREAS, the Mayor did not participate in any action by the
City Council concerning the subject property or the project for which
the subject property was required; and
The RDA's Agreement with Woodbury University
WHEREAS, Government Code § 1091 provides that when a public
official is an officer of a nonprofit corporation which contracts
within the public official's jurisdiction, the nonprofit corporation is
considered to be a remote interest and the official is not deemed to be
interested in a contract entered into by a body or board of which he isi
a member if the fact of that interest is disclosed to the body or board)
and noted in its official records, and thereafter the body or board
authorizes, approves, or ratifies the contract in good faith by a vote
of its membership sufficient for the purpose without counting the vote
or votes of the officer or member with the remote interest; and
WHEREAS, the Mayor has disclosed to the City Council his
position as a nonsalaried Trustee of Woodbury University, a nonprofit
corporation; and
WHEREAS, on or about May 23, 2001, the City of Vernon
RDA entered into an agreement with Woodbury University School of
Business for consulting services related to the implementation of a
business incubator by the City; and
WHEREAS, the RDA minutes for May 23, 2001, show that the
Mayor abstained from voting on the RDA contract with the Woodbury
University School of Business; and
The City's/RDA's Contracts with the Mayor's Tenants
WHEREAS, Government Code § 1091 provides that when a public
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official is a landlord of a contracting party, the contracting party is
considered a remote interest, and the official is not deemed to be
linterested in a contract entered into by a body or board of which he is
a member if the fact of that interest is disclosed to the body or board
and noted in its official records, and thereafter the body or board
authorizes, approves, or ratifies the contract in good faith by a vote
of its. membership sufficient for the purpose without counting the vote
or votes of the officer or member with the remote interest; and
WHEREAS, as reviewed above, the Mayor has properly disclosed
(a) all of his real property interests and (b) all his tenants which
are a source of income on his annual FPPC 700 Forms filed with the
City; and
WHEREAS, the City Council, the RDA Board of Directors,
(and/or the IDA Board of Directors has entered into several contracts,
or certain transactions with the following tenants of the Mayor: (a)
Clougherty Packing, (b) McKinney Travers, (c) the Vernon Chamber of
Commerce, (d) Hickey Properties, and (e) Cleveland Wrecking Company;
and
WHEREAS, the Mayor has advised the City Council that he has
always intended to and believes that he has disqualified himself by
abstaining or being excused with respect to every contract or
transaction where his tenant was involved; and
The Approval of an IDA Bond with Clougerty Packing
WHEREAS, on November 16, 1993, the City Council approved the
issuance of $10,000,000 Industrial Development Revenue Bonds (the
"Bonds") by the IDA for the purpose of providing financing for the
acquisition and construction of a slaughterhouse facility at Clougherty
Packing located at 3094 East Vernon Avenue; and
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1 WHEREAS, on December 7, 1993, the City Council voted to
2 approve Bond Counsel with regard the Bonds; and the IDA approved and
3 authorized (a) the issuance, sale and delivery of the Bonds, (b) Bond
4 Counsel for the Bonds and (c) the execution and delivery of an
5 Indenture of Trust and other loan documentation related to the Bonds;
6 and
7 WHEREAS, on May 2, 1995, the IDA approved a First
8 Supplemental Indenture and Redemption Agreement to the Indenture of
9 Trust; and
10 WHEREAS, City Council minutes for November 16, 1993 and
11 December 7, 1993, and the IDA minutes for December 7, 1993 and May 2,
12 1995, indicate that the Mayor abstained from voting and did not
13 participate in the approval of any matters related to the Bonds; and
14 The RDA's Approval of an Agreement with McKinney Travers
15 WHEREAS, on August 5, 1997, the City Council and the RDA
16 approved a Confidential Agreement between the City of Vernon, the
17 Vernon RDA and McKinney Travers for property brokerage services; and
18 WHEREAS, under the agreement, McKinney Travers was required
19 to reimburse the City and the RDA one-half of its commission on any
20 property transaction where its brokerage services were used for the
21 City or the RDA. In exchange, McKinney Travers was allowed to serve as
22 the City and the RDA's exclusive broker; and
23 WHEREAS, the minutes for the City Council meeting and the
24 City RDA meeting on August 5, 1997, show that the Mayor was not present
25 and, therefore, did not participate in the approval of the McKinney
26 Travers Agreement; and
27 WHEREAS, on September 8, 1998, the City Council and the City
28 RDA approved Amendment No. One to the Confidential Agreement between
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the City, the City RDA and McKinney Travers for property brokerage
services thereby extending the term of the Agreement; and
WHEREAS, the Mayor has advised the City Council and the RDA
that he intended to abstain and clearly recalls that he had abstained
with regard to this Amendment No. One to the Agreement; and
WHEREAS, the City Council and RDA minutes for September 8,
1998, failed to reflect the yeas and the nays that occurred on that
particular matter, but simply indicate that the matter was approved;
and
WHEREAS, on January 26, 1999, the City Council and the RDA
approved Amendment No. Two to the Confidential Agreement between the
City, the RDA and McKinney Travers for property brokerage services,
thereby again extending the term of the Agreement; and
WHEREAS, the City and RDA minutes on January 26, 1999, show
that the Mayor abstained and did not participate in the approval of the
Amendment No. Two to the McKinney Travers Agreement; and
The Cleveland Wreckinq Transaction
WHEREAS, on August 17, 1999, the City Council approved the
execution of a Letter Agreement by and among the City, the RDA, and
Dynamic Builders regarding a property line adjustment for real property
located at 3170 Washington Boulevard owned by Cleveland Wrecking; and
the City RDA approved the execution of (i) an Agreement to Purchase and
Sell Real Estate and (ii) Escrow Instructions by and between the City
RDA and Dione Fenning (President of Cleveland Wrecking) for real
property located at 3170 E. Washington Boulevard; and
WHEREAS, the City and RDA minutes for August 17, 1999, show
that the Mayor was excused from the City Council meeting and did not
participate in the approval of the Letter Agreement with respect .to the
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property line adjustment, as well as from the RDA meeting and that he
did not participate in the approval of the Purchase and Sale Agreement
with Dione Fenning; and
WHEREAS, the City's records also indicate that, although the
City and the RDA were interested in purchasing property owned by
Cleveland Wrecking and had approved the Purchase and Sale Agreement,
the transaction was never fully consummated or finally approved because
of contamination issues on the property; and
The Vernon Chamber of Commerce Reimbursement Agreement
WHEREAS, on November 2, 1999, the RDA approved a
Reimbursement Agreement with the Vernon Chamber of Commerce
for a two-year period during which the RDA would reimburse the Chamber
for hiring an employee to provide assistance to the RDA in connection
with international redevelopment activities; and
WHEREAS, the Reimbursement Agreement paid only the expenses
to the Chamber of hiring an employee for a limited period, who would
provide services through the Chamber for the RDA and did not provide
the Chamber or the Mayor with any identifiable financial benefit; and
WHEREAS, as with his other financial interests, the RDA
minutes for November 2, 1999, show that the Mayor abstained and did not
participate in the approval of the Reimbursement Agreement; and
WHEREAS, all municipal corporations, including the City of
Vernon, are required to maintain records that accurately reflect the
transactions of the City; and
WHEREAS, the City is not required to record a vote on a
transaction by recording the yeas and nays of the City Council
(McQuillan, Municipal Corporations, § 14.04); and
WHEREAS, the City Council minutes do not record the
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1 individuals who have voted for or against a matter, but simply reflect
2 that a motion was made and by whom, that there was a second and by
3 whom, and whether the motion passed; and
4 WHEREAS, the Chief Deputy City Clerk attends all City Council
5 meetings and is supposed to record the transactions of the City Council
6 in shorthand, and then use those notes to prepare the official minutes;
7 and
8 WHEREAS, under the law, the City, like all other public
9 agencies, may take action to correct its records so that they properly
10 and accurately reflect the actions that have been taken; and
11 WHEREAS, the City Council of the City of Vernon has reviewed
12 all of the facts set forth in this resolution and believes that, based
13 upon the Mayor's consistent record of abstaining on all matters that
14 impact any of his economic interests, no matter how small, as he has
15 advised the City Council, he intended to and did abstain on the
16 approval of Amendment No. One to the McKinney Travers Agreement, as he
17 clearly had for the original agreement with McKinney Travers and the
18 Second Amendment to that Agreement, that the City's minutes for
19 September 8, 1998, regarding that matter should be corrected in order
20 to clarify that such action was taken.
21 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
22 CITY OF VERNON AS FOLLOWS:
23 SECTION 1: The City Council of the City hereby finds and
24 determines that the recitals contained hereinabove are true and
25 correct.
26 SECTION 2: The City Council of the City of Vernon hereby
27 approves an amendment to page 2 of the September 8, 1998 City Council
28 minutes regarding the approval of the Amendment No. One to the
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1 McKinney Travers agreement, so that they properly reflect that the
2 Mayor abstained from voting on the matter.
3 SECTION 3: The City Council of the City of Vernon hereby
4 directs the City Clerk, or his designee, to make such corrections.on
5 the official minutes for September 8, 1998, and orders that such
6 corrected minutes shall become the official minutes of the City of
7 Vernon.
8 SECTION 4: The City Clerk of the City of Vernon shall
9 certify to the passage of this resolution, and thereupon and
10 thereafter the same shall be in full force and effect.
11 APPROVED AND ADOPTED this 4th day of September, 2002.
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14 THOMAS A. YBAR , Mayor Pro Tem
15 ATTEST:
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18 BRUCE V. MALKENHORST, City Clerk
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ESTATE OF CALIFORNIA
ss
(COUNTY OF LOS ANGELES
I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution No.
8052, was duly adopted by the City Council of the City of Vernon at a
regular meeting of the City Council duly held on Wednesday,
September 4, 2002, and thereafter was duly signed by the Mayor Pro Tem
of the City of Vernon.
(SEAL)
BRUCE V. MALKENHORST, City Clerk
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SUPPORTING
DOCUMENTS
CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro—Tem
WM. "BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL MCCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator/ City Clerk
FAX (323) 826-1438
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CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
EDUARDO OLIVO
City Attorney
FAX: (562) 869-1883
KEVIN WILSON
Director of Community Services & Water
FAX: (323) 826-1435
KENNETH J. DeDARIO
Director of Utilities
FAX: (323) 826-1425
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
BRUCE W. OLSON
Police Chief
FAX: (323) 826-1481
September 3, 2002
Bruce Malkenhorst, City Administrator Vv /
CITY OF VERNON
4305 Santa Fe Avenue
Vernon, California 90058
Re: Clarification of City and Agency Minutes
Dear Bruce:
I have previously been advised that the Los Angeles Times has made
several Public Records Act requests in connection with the City of
Vernon and the City of Vernon Redevelopment Agency. I have reviewed a
Public Records Act request dated June 17, 2002, that relates to various
transactions that involve companies or individuals who are my tenants.
I have asked the City Attorney about the status of the requests and he
has generally advised me of the issues.
I have now reviewed several City Council and Redevelopment Agency
minutes in connection with some of the transactions that were identi-
fied in the Public Records Act request. Consistent with my recollec-
tion and my practice, the minutes reflect that I either abstained or
was excused from the City or the Agency meetings when such matters were
considered. Further, as you know, it has never been my practice or the
practice of any other City Council member or Agency Board member, to
participate in the making of any of the City's contracts or the Rede-
velopment Agency's contracts. Such tasks have been assigned to City
staff, such as yourself, the City Attorney and other relevant indivi-
duals. Our only participation in such matters has been to consider and
review the issues presented at City Council or Redevelopment Agency
meetings.
Bruce V. Malkenhorst September 3, 2002
RE: Clarification of City & Agency Minutes Page 2
In spite of the above, the City Council and Redevelopment Agency
minutes for September 8, 1998 are unclear as to the votes that were
taken. On August 5, 1997, the City approved the Confidential Agreement
between the City, the Agency and McKinney Travers, Inc. McKinney
Travers is my tenant. Therefore, as the minutes indicate for the
approval of the initial agreement between the City and the Agency I was
absent from said meeting and, as for the Second Amendment on January
26, 1999, to the same agreement, I abstained from voting on that
matter. I recall abstaining on the same matter.for the First Amended
Agreement and believe that the record should clearly indicate such
abstention.
Additionally on August 8, 2000, the City and the Agency considered
whether to approve a Purchase and Sale Agreement from Hickey Properties
in connection with the Agency's intent to build a business incubator
center. Hickey Properties became my tenant in January 1999 pursuant to
a month -to -month tenancy at $250 per month. As with all my other
tenants, I recall abstaining on the approval of that matter.
Nevertheless, the minutes do not clearly reflect my abstention.
As we have discussed, and as I have advised the City Attorney, my
record on such abstentions is very clear and consistent. I have always
intended to, and to the best of my recollection, have always abstained
on any such matters that involve my tenants.
Pursuant to our prior discussions, as well as my discussion with
the City Attorney, I have asked the City Council and the Agency Board
to consider amending the relevant City Council minutes and Agency
minutes to clarify that I in fact did abstain in such matters.
If you should have any questions, please feel free to contact me.
Sincerely,
Leonis C. Malburg,
Mayor
cc: City Council Members