City of Ione

Summary

The Grand Jury received two complaints alleging misconduct by paid and elected officials of the city of Ione. The allegations covered a wide range of issues from violations of the Brown Act to an illegal attempt by the City Council to break the lease between the city and Portlock International.

There were allegations of malfeasance, misfeasance, and nonfeasance involving members of the city council and the police department. After an extensive investigation, the Grand Jury concluded that most allegations were unfounded.

Findings

  1. There is a lawsuit between the city of Ione and Portlock International.
  2. In June of 1997, the Securities and Exchange Commission (SEC) contacted the city about an investigation they were conducting regarding bonds issued by the city for the Castle Oaks project.
  3. The California Alcoholic Beverage Control Board (ABC) investigated allegations that the city allowed a business to operate in violation of state liquor laws and found no violations.
  4. The city issued building permits in each instance cited in the complaint. The Building Inspector inspected all construction for compliance with the Uniform Building Code (UBC) and the Americans Disability Act (ADA).
  5. The city issued a temporary permit allowing a business to use the grease trap of an adjoining business pending the Amador County Health Department’s inspection. The business will be required to install a separate grease trap if the Health Department finds it necessary.
  6. The California State Fire Marshall’s investigation of the Ione Hotel fire did not find faulty wiring as the cause. The cause is undetermined because of extensive damage to the structure.
  7. There was an investigation and report taken by the California Highway Patrol (CHP) of an accident involving the chief of police while he was driving a patrol car. The CHP concluded that the chief of police was not intoxicated when involved in the accident.
  8. All City Council agendas for the period of May 5, 1997 to December 2, 1997 containing closed sessions regarding litigation contained the name of the parties as required by the Brown Act. All but two City Council agendas for this period containing closed sessions also included the agenda item "Disposition of closed door session."
  9. The city manager and City Council renegotiated the terms of the city manager’s employment contract eliminating the residency requirement. The chief of police does not comply with the residency requirement of his employment contract.
  10. On advice of counsel, a City Council member left closed sessions where the subject of discussion created a possible conflict of interest. The same City Council member voluntarily left open sessions where the subject of discussion created a possible conflict of interest.
  11. City records are stored in two locations.

Conclusions

  1. The Grand Jury cannot investigate any issue in litigation.
  2. The City Council properly hired attorneys to represent it in matters relating to possible SEC violations with respect to Mello-Roos bonds issued for Castle Oaks Development.
  3. The city did not allow a local business establishment to sell or serve alcohol in violation of state law.
  4. The city did not allow a business to operate in violation of building permits or city ordinances or health permits (grease traps). There is no evidence to support the claim that the Ione Hotel burned down because of faulty wiring.
  5. There was no cover-up of the vehicle accident involving the chief of police.
  6. The city complies with the Brown Act regarding notice of closed sessions.
  7. The police chief has not established residency within the city as required by his employment contract. The City Council is aware of the police chief’s living arrangements and has given informal approval.
  8. No one forced a council member to leave any council meetings. The council member left closed-door sessions on advice of the city attorney when a possible conflict of interest existed.
  9. Documents and records are misplaced or missing because the city relocated some files to the city’s corporation yard during remodeling of City Hall.

Recommendations

  1. Conduct an inventory of city records stored at the corporation yard and City Hall. Consolidate these records in the City Hall.
  2. Require the chief of police to comply with his employment contract or re-negotiate the contract to eliminate the residency requirement.

Comment Requirements

The Grand Jury requests that the City Council respond within 90 days from the official filing date of this report as required by Penal Code 933(c).

Authority to Investigate

Penal Code Section 925(a) provides that the Grand Jury may look into the misconduct of public officers and examine the books and records of any city. Because of its deliberations and a vote of at least twelve members as required by Penal Code Section 916 to conduct this investigation, the Grand Jury determined the complaints warranted investigation.

The Grand Jury decided to focus its investigation on allegations that the city:

Method of Review

The Grand Jury interviewed the following people:

Background

Liquor Licensing

The city of Ione does not license establishments that serve alcohol. The ABC regulates this activity. The ABC issues liquor licenses for specific business establishments and specific areas within the establishment. Selling or serving liquor outside the designated areas constitutes a violation of the licensing laws.

The process for obtaining a temporary license is not complicated. The business owner or civic group completes an application at the local police department. The police department then forwards the application to the ABC, which usually approves temporary liquor license requests.

The Grand Jury reviewed the applications for temporary liquor licenses filed with the Ione Police Department and the corresponding temporary licenses issued by the ABC. Each time the business in question applied for a temporary license, the ABC approved and issued a license.

The Grand Jury contacted the ABC regarding complaints filed with the Police Department and the ABC alleging violations of liquor license laws by a local business. The ABC advised they had investigated each complaint and found no violations.

Brown Act

Because of the notification of a possible SEC investigation and the legal issues between the city and the various parties to Castle Oaks Development, the city has held numerous closed session meetings. The complainants alleged that these meetings were in violation of the Brown Act.

The Grand Jury examined all but one agenda for the period of May 1997 to December 1997. Most agendas included a closed session. Under the Brown Act, government legislative bodies can hold closed sessions for specifically identified reasons. Two acceptable reasons are litigation and anticipated litigation.

Each agenda contained notice of a closed session. However, merely noting the closed session does not satisfy the requirements of the act. Before convening a closed session, the act requires that a representative of the legislative body announce the items to be discussed in closed session. Referring to the item(s) by agenda number is usually sufficient. (See Appendix B)

With one exception, the Grand Jury determined the City Council properly gave notice of closed sessions during the period reviewed.

City Manager and Police Chief Employment Contracts

The city contracts for its Police Chief and City Manager. Originally, each contract required the employee live within the city limits. Neither employee complied with this requirement. The city and the City Manager renegotiated the employment contract. The new agreement allows the City Manager to live outside the city.

The Police Chief’s contract requires he live within the city. He does not live within the city. He rents a room during his workweek. The City Council is aware of this situation and has given informal approval to this arrangement.

Building Permit Violations

One allegation contended that a local business was in violation of the Uniform Building Code (UBC). Another allegation stated that the City Council had knowledge of and allowed these violations to continue while requiring other businesses to comply.

Another complaint alleged that the city allowed illegally installed wiring which caused the Ione Hotel fire.

The complaint also alleged a business failed to comply with the ADA relating to a staircase between floors. The building inspector told the Grand Jury that the original design did not comply but that he required the business to use a design meeting ADA requirements.

Part of the allegation claimed the city allowed a business to operate in violation of health regulations by letting the business share a grease trap belonging to an adjoining business. The city allowed this use pending a ruling from the County Health Department. The conditional use required the business to install a grease trap if the combined use proved unsatisfactory.

The Grand Jury obtained copies of the building permits issued to the business in question and talked with the city’s contract building inspector. All construction complied with the UBC.

Vehicle Accident Involving the Police Chief

The Chief of Police was involved in a vehicle accident while driving a city vehicle. Standard police procedure for these types of incidents is to request an outside agency conduct the investigation. The CHP conducted the investigation and the investigation report is on file.

Lost City Records

During a remodeling project at City Hall, the city moved some records to the city’s corporation yard. Some records remain at the corporation yard.

SEC Investigation

The city acquired about 500 acres of surplus property from the State of California. The city then transferred the land to a developer who developed a community of high-end homes and commercial properties. For its part, the city retained over 200 acres for a public golf course. The city then leased the golf course to Portlock International, a private company.

Funding for the project included both private and public funds. The city issued two Mello-Roos bonds totaling over $10,000,000 to fund the publicly financed portion of the project. It is in reference to these bonds that the city received information from the SEC about a pending investigation of the city. The SEC subpoenaed individual council members. In May of 1998, the Amador Ledger Dispatch reported the ongoing SEC investigation of the City of Ione regarding Mello-Roos bonds.

The complaint alleged that there was no SEC investigation and that the real reason for hiring an outside law firm was to break the lease between the city and Portlock International. The Grand Jury learned the city sued Portlock International. This suit is unrelated to the SEC investigation. The SEC investigation relates to Mello-Roos bonds issued by the city. The city hired a law firm to defend itself and its council members in matters relating to this investigation.

Supplementary Information

City Council agendas from April 1997 through December 1997

Building permits

Engineering studies

City police reports alleging illegal alcohol sales

Applications for temporary ABC licenses

Copies of temporary ABC permits

Employment contract between the city manager and the city

Reports from the city engineer

Reports from the city planner

The Brown Act, Open Meetings for Local Legislative Bodies (Attorney General’s Office, Public Inquiry Unit, 1994)

The Brown Act, 1997 Supplement, California Attorney General’s Office, State of California, 1997

California Highway Patrol Accident Report