RATES RATES  

Socialize

MEGATAXERS: Did Citrus College Pass Its $300 Million Bond Illegally?

August 8, 2021

By The Irishman and Brian Hews

The study of public school bonds is nothing more than an analysis of abuse, fraud, and waste throughout the 1,037 school districts in California and the small basket of community colleges.

With the first installment of our exposé,  we have now outlined the existence and presence of the Megataxers.  A few Bassett school board members and their lawyers altered the bond resolution, misrepresented the tax measure, and did not meet the requirements of law on the ballot label.

This is occurring in a number of school districts.

The bond process starts with the Educational Facilities Master Plan (EFMP) – the golden ticket to local and state funding, followed by several trips to the Office of Public School Construction.

As John Karns cautioned, “everyone works for the government.” Wally Karabian proclaimed, “the larger the appropriation, the less the argument.”  Retreating to Ararat results in being surrounded.

We mentioned the small basket of community colleges involved with the Megataxers; we will now focus on Citrus College.

On January 15, 2019, the Board at Citrus College awarded $312,000 to Westberg & White, an architectural firm, to craft the 2020-2030 EFMP; the initial indicator that a bond measure is imminent.

The President-Superintendent of Citrus College at the time,  Geraldine Perri, also served as the Executive Director of the Citrus College Foundation; no one called her out for the conflicts of interest arising from her dual roles.

A mere three months later, the Board of the Citrus College Foundation held a meeting with Ms. Claudette Dain, VP of Finance and Administrative Services at Citrus. At the meeting, Dain introduced Mr. Sillings and Ms. Pavon, consultants from MIG, Inc. With a team of consultants from MIG and Westberg & White Architects, Citrus was ready to develop an EFMP.

That is the cowbell for the Megataxers. Law firms sweep in ready to author the mandatory paperwork: resolutions, full text of tax measures, the ballot labels, tax rate statements, arguments for, and preliminary and final official statements.

Law firms that provide these services read like a who’s who of big firms:  Best, Best & Krieger; Foley & Lardner; Fulbright & Jaworski; Hawkins, Delafield & Wood; Jones Hall; Kronick, Moskovitz, Tiedemann & Girard; Lozano Smith; Nixon Peabody; O’Melveny & Myers; Orrick Harrington & Sutcliffe; Quint & Thimmig; Sidley, Austin, Brown & Wood; Stradling Yocca Carlson & Rauth; Richards Watson & Gershon; and a new entrant, Cerritos-based Atkinson, Andelson, Loya, Rudd & Romo.

They are the law part of the Megataxer network, and they use their skills in writing to “comply” with the law.

Reading the resolutions, full text of taxing measures, and ballot labels show a shared network; there’s plenty of tax-payer funds to go around.

Next up are the financial advisors, again a who’s who of influential firms:  Caldwell, Flores & Winters; Dale Scott & Company; Feldman, Rollap & Associates; Isom Advisors; Kelling, Northcross & Nobriga (KNN);  Kithata & Company; Lalo “click” Trujillo and his Mission Trail Advisors; Northcross, Hill, & Ach; C.M. de Crinis & Co; Government Financial Strategies and Urban Futures.

The advisors suggest the underwriters: Bank of America; Citibank; George K. Baum & Company; Piper Jaffray; Morgan Stanley; ; Salomon Smith Barney; Stone & Youngberg; UBS PaineWebber; RBC Capital Markets; RBC Dain Rauscher; O’Connor SWS Securities; and, Wedbush Morgan Securities.

They are all in the business. They say for the children. Indeed.  Graham Beck, Esq. at Nixon Peabody bills out at well over $600 per hour.

Combined, the advisors and underwriters are the money changers of the Megataxer network.  They can turn dimes into dollars, using bricks and mortar.

Yet the lawyers, financial advisors, and underwriters all depend upon their clients – school and community college district Boards – for the advancing of documents and for the right to process bond elections with the aid of the County. 

If the Official Documents are in order, the Megataxers make sure the bond measures are good to go.  Los Angeles County Counsel does not even check the tax measures and ballot labels for compliance.

The fundamental question is:  who qualifies the tax measures for the ballot?  The sponsor or L.A. County Counsel?  Who makes sure the documents are compliant?

The Beginning

In June of 2019, just two months after their initial meeting, the Citrus Board engaged George Pla’s Cordoba Corporation for management services and Fagan, Friedman & Fulfrost, LLP (FM3) for legal services, the same firm that worked to pass Basset’s bond.

The Board paid Cordoba $75,000 and Fagan $340 per hour.

It was a clear indicator the Board was going to propose a bond measure.  Well over a year in advance, just the time needed to be successful.

Time passed, finally a July 2020 presentation was made by FM3, along with the Lew Edwards Group, KNN Public Finance, and Nixon Peabody as bond counsel, guided by Lisalee Wells.

Wells had a hand in the LACCD bond issue.

They were the “subject matter experts,” they get the ball rolling toward a resolution along with a tax measure and ballot label.  The Board passed the resolution and official exhibits at one meeting.

The election process requires the resolution and measure, but most importantly a ballot label. There are certain criteria under the California Education Code that a ballot label must follow; for example, by law, the ballot label is not allowed to exceed 75 words.

The label must also be impartial, non-argumentative and have the following: “Shall the measure (insert the rate and duration of the tax) be adopted?”

FM3, just like they did with Bassett, produced the first iteration of the ballot label:

 

“CITRUS COLLEGE CAREER EDUCATION, REPAIR, AFFORDABLE HIGHER

EDUCATION MEASURE.  To upgrade job training and vocational, science,

technology classroom and labs; improve security and fire safety systems;

expand career and educational resources for students and veterans to

prepare for university and jobs: repair aging classrooms; remove asbestos,

mold, lead paint: shall Citrus Community College District issue $298 million

in bonds at legal rates, levy on average $25 per $100,000 of assessed

valuation, generating $16 million annually while bonds are outstanding,

requiring audits, citizen’s oversight, all funds staying local.”

 

The label was 87 words, violating the Code. In addition, the adopted phrase, the rate and duration of the tax was missing with the firm using, “while bonds are outstanding”.

Would the bond have been approved by residents had they known the rate and duration, otherwise known as the repayment period, was thirty years, lasting until 2051?

Official documents were due by August 7, 2020; the Board’s agenda included Resolution 2020-21-01 to place the measure on the November 3, 2020 ballot.

The Board had to hurry.

Nixon-Peabody revised the ballot label:

 

“CITRUS COLLEGE CAREER EDUCATION, REPAIR, AFFORDABLE HIGHER

EDUCATION MEASURE.  To retain qualified teachers/improve education

by: upgrading job training, science, technology classrooms, laboratories;

meeting earthquake/fire/clean drinking water safety; providing resources

for students/veterans preparing for university transfer/jobs; removing

leaky roofs, mold, lead paint: shall Citrus Community College District issue

$298,000,000 in bonds at legal rates, levy an average $25 per $100,000

assessed valuation generating $16,300,000 annually while bonds are

outstanding, requiring audits, oversight, all funds staying local?”

 

Nixon eliminated the word million twice, adding zeroes for hundreds of thousands of dollars.  Striking “citizen’s oversight,”  they also presented an awkward and confusing question, but this time in 76 words.

Both iterations violated the  California Education Code.

The Code requires that “the ballot shall also be printed with a statement that the Board will appoint a citizens’ oversight committee and conduct annual independent audits to assure that funds are spent only on school and classroom improvement and for no other purpose.”

The statute does not say voter information guide, the statute says, “the ballot shall be printed. with the statement.”

Ballots that do not comply with the law are not to be counted, but that’s only if laws are enforced.

The Official Documents had to be adopted and delivered to the County Registrar, with a copy to L.A. County Counsel.

Counsel checked for compliance and passed them on to the Board of Supervisor; this needed to be completed by the first week of August.

The notice of election and the arguments for and against were published.

Meanwhile, someone inside L.A. County Counsel qualified the measure with the bogus ballot label and gave it to County Counsel Mary Wickham and the Board of Supervisors for their blessing.

The Citrus Superintendent and staff had done their job and placed the bond on the ballot; the staff included Claudette Dain, Wade Ellis, Director of Fiscal Services, and Fred Diamond, Director of Facilities and Construction.

Soon after, money started pouring in.  But not from residents of the District, except for a few very modest contributions. The money came from the Megataxers;  Cordoba Corporation, along with many architects, engineers, and law firms.

In September 2020, Cordoba contributed $25,000 to the campaign even before the committee formed.  Superintendent Perri, and the Citrus College Chief Information Officer all made modest contributions.

A week later, Torrance-based Keenen & Associates contributed $2,500; San Diego-based MWE Engineering contributed $5,000 and Westberg & White, Inc., who received $312,000 from the Citrus College Board, shelled out $25,000.

That same week, Lisa Conyers, Vice President of Academic Affairs at Moreno Valley College and a member of the Riverside County Board of Education, contributed $1,000.

So did Fred Diamond, Director of Facilities and Construction at Citrus, who listed himself as an Executive with Diamond Diasol Corporation, a suspended California corporation.

The same day, Masadi Enterprises/Diamond Precision Tool Group in Calabassas, contributed $1,000.

Stepping up to the trough, Moreto Matheson & Associates, architects from Glendora contributed $12,500; and Pezeski Engineering from Santa Ana contributed $5,000.

KNA Structural Engineers out of Irvine put in $2,500 and Fagen, Friedman & Fulfrost, engaged at $340 per hour at the beginning of the process, contributed $1,000 as well.

Within the first ten days, companies had contributed more than $85,000 to the campaign for Measure Y.

Geraldine Perri, President-Superintendent of Citrus College, had a hand in the process, both with Citrus College and the Citrus College Foundation.

Perri’s Director of Fiscal Services, Wade Ellis, formed the Committee for Citrus College – Yes on Measure Y 2020 and hired high-priced treasurer Jen Slater of the Irvine-based Campaign Compliance Group to run the committee.

Wade Ellis signed on as the controlling officeholder and proponent for Measure Y, cashing his taxpayer-funded Citrus paycheck while accepting contributions to the committee.

HMG-CN obtained the committee’s campaign statements – they contained the first glimpse at the evidence.

Forms-1

Forms-2

Wade Ellis, CPA, and Jen Slater signed the first campaign report on September 22, 2020, and sent the package overnight to the County Registrar 9/23/20. But it was stamped September 28, 2020.  They had been sending in 497’s for weeks.

Perri’s Citrus College Foundation donated $100,000 on September 23, 2020, using monies donated from the same Megataxers who supported the bond.

 

The $100,000 donation from the Citrus College Foundation.

 

Anyone can make a tax-deductible contribution to the Foundation, and the Foundation can contribute to the Yes on Measure Y 2020 Campaign.

HMG-CN published an article in 2020 concerning the Rancho Santiago Community College Foundation donating to the $500 million bond Measure L, seems like no one pay attention.

Some call it money laundering; companies giving to the foundation knowing it will go to the campaign committee.

The documents show that several companies who donated money to the Campaign for Measure Y Committee, a total of $68,500, later landed lucrative bond construction contracts:

  • Cordoba donated $25,000
  • Keenan and Associates Insurance – $2,500
  • Westberg & White, Inc. – $25,000
  • Pezeshki Engineering, Inc. – $5,000
  • John A. Martin & Associates, Inc. – $5,000
  • FM3 – $1,000
  • HMC Architects – $5,000.

A breakdown of the campaign statements:

Date Company or individual Nature of business Amount Contract with CCD
09-08-20 Cordoba Corporation

1401 N. Broadway

Los Angeles, California  90012

Infrastructure 25,000 Yes
09-15-20 Keenan & Associates

2355 Crenshaw Boulevard

Torrance, California 92121

Insurance and Risk

Management

2,500 Yes
09-15-20 MWE Engineering, Inc.

4115 Sorrento Valley Boulevard

San Diego, California  92121

Engineering 5,000 ?
09-15-20 Westberg & White, Inc.

14471 Chambers Road Suite 210

Tustin, California  92780

Architects 25,000 Yes
09-16-20 Lisa Conyers (College President)

21457 Tennyson Road

Moreno Valley, California 92557

Education 1,000 ?
09-16-20 Maasadi Enterprises, Inc.

Diamond Protection Tool Group

Calabassas, California  91302

1,000 ?
09-16-20 Moreto Mathison & Associates Architect, Inc.

1315 S. Grand Avenue, Suite 202

Glendora, California  91740

Architects 12,500 ?
09-16-20 Pezeshki Engineering, Inc.

1920 E. Walnut Ave.  3-H

Santa Ana, California  92705

Engineering 5,000 Yes
09-17-20 D’Autremont- Helms & Associates

150 S. Arroyo Parkway Suite 100

Pasadena, California 91105

Engineers 2,500 ?
09-17-20 John A. Martin & Associates, Inc.

950 S. Grand Avenue, 4th floor

Los Angeles, California  90015

Architects 5,000 Yes
09-17-20 Jamie Ray-Clibon

25652 La Cima

Laguna Niguel, California  92677

Friend 1,500 Probably not
09-18-20 KNA Structural Engineers, Inc.

9931 Muirlands Blvd.

Irvine, California  92618

Engineers 2,500 ?
09-19-20 Fagen Friedman & Fulfrost

6300 Wilshire Boulevard #1700

Los Angeles, California  90048

Lawyers 1,000 Yes
09-21-20 VCA Engineers, Inc.

8136 2nd Street Ste 208

Downey, California 90241

Engineers 1,000 ?
09-23-20 Citrus College Foundation

1000 West Foothill Boulevard

Glendora, California  91740

Tax Deductions 100,000 ?
09-23-20 HMC Architects, Inc.

3546 Concourse Street

Ontario, California  91746

Architects 5,000 Yes
09-28-20 P2S, Inc.

5000 E. Spring Street, Ste. 800

Long Beach, California  90815

Engineers 5,000 ?
09-29-20 Steinberg Hart Corp.

818 W. 7th Street, Ste 1100

Los Angeles, Califonia 90017

Architects 1,500 ?
10-01-20 Southland Industries Corp.

12131 Western Avenue

Garden Grove, California  92841

Construction and

Engineering

2,500 ?
10-02-20 Sillman Wright Architects, Inc.

7515 Metropolitan Drive, Suite 400

San Diego, California  92108

Architects 2,000 ?
10-05-20 Valley Pipeline Services, Inc.

47-110 Washington Street, Suite 201

La Quinta, California  92253

Utility 5,000 ?
10-05-20 Bernard’s

555 First Street

San Fernando, California  91340

Contractor 15,000 ?
10-05-20 C. W. Driver LLC – Dana Roberts

468 North Rosemead Boulevard

Pasadena, California 91107

General Contractor 20,000 ?
10-05-20 Miyamoto International Inc.

1450 Halyard Drive Suite 1

West Sacramento, California 95691

Seismic engineers 5,000 ?
10-06-20 Inland Pacific Tile, Inc.

1817 Commerce Center

San Bernardino, California  92403

Tile Contractor 5,000 ?
10-07-20 Helix Electrical, Inc.

6795 Flanders Drive

San Diego, California 92121

Electrical 5,000 ?
10-07-20 Nuway, Inc.

8992 Jurupa Road

Riverside, California  92509

Masonry 5,000 ?
10-08-20 Salsbury Engineering, Inc.

2465 W. La Palma Avenue

Anaheim, California  92801

Engineering 2,500 ?
10-09-20 B N Builders, Inc.

2601 4th Ave, Suite 350

Seattle, Washington  98121

General Contractor 5,000 ?
10-13-20 LPA, Inc.

5301 California Avenue

Irvine, California 92617

Architecture 5,000 ?
10-13-20 Moving California Forward

249 E. Ocean Boulevard, Ste. 685

Long Beach, California  90802

 

Low Emisson Pathways 2,500 ?
10-15-20 Bonas Company, Inc.

3197-C Airport Loop Drive

Costa Mesa, California  92626

Painting and Wall Coverings 1,000 ?
10-16-20 Elljay Acoustics, Inc.

511 Cameron Street

Placentia, California  92870

Interior Contractor 1,000 ?
10-16-20 RVH Constructors

1571 Parkway Loop Suite B

Tustin, California  92780

Prime Contractor 5,000 ?
10-19-20 Ridge Landscape Architects, Inc.

8841 Research Drive Suite 200

Irvine, California  92618

Landscape Architects 1,000 ?
10-19-20 The Hill Partnership, Inc.

115 Twenty Second Street

Newport Beach, California 92663

Architects 20,000 ?
10-19-20 BKF Engineers, Inc.

255 Shoreline Drive, Suite 200

Redwood City, California  94065

Engineers 2,000 ?
10-19-20 Corgan Associates, Inc.

401 N Houston Street

Dallas, Texas 75202

Architects 1,000 ?
10-19-20 MHP Structural Engineers, Inc.

3900 Cover Street

Long Beach, California  90808

Engineers 2,000 ?
10-20-20 HED Corporation

Harley Ellis Devereaux

225 Broadway

San Diego, California  92101

Architects 2,000 ?
10-20-20 Pace of California – CSEA

555 Capitol Mall, Suite 400

Sacramento, California 95814

Union 2,400 ?
10-26-20 Balfour Beatty, Inc.

3100 McKinnon Street, 6th floor

Dallas, Texas 75201

Construction 3,000 ?
10-26-20 Nuvis Landscape Architecture, Inc.

3151 Airway Avenue, Suite J-3

Costa Mesa, California  92626

Landscape Architecture 1,000 ?
10-26-20 Psomas, Inc.

100 Corporate Center Drive

Culver City, California  90230

Construction Management 2,500 ?
10-27-20 Climatec – Brian Marron

2851 W. Kathleen Drive

Phoenix, Arizona  85053

HVAC ?
10-31-20 Interior Resources, Inc.

1761 Reynolds Avenue

Irvine, California  92614

Interiors ?

 

Citrus covers the cities of Azusa (population 49,753), Claremont (36,090), Covina (48,095), Duarte (21,559), Glendora (51,801) and Monrovia (36,810).

The Megataxers; the architects, engineers, and lawyers, were the true proponents of the tax measure, not the residents of the District.

Measure Y was moved on to the ballot by Megataxers from out of the area, out of the county, even out of state, not by the residents of the Citrus Community College District.

The Megataxers worked to assemble an EFMP that would keep them employed over the next ten years while drawing on $298 million in public school bonds – at a tremendous cost to the taxpayers.

The bond passed.

The overall cost, more than $500 million; a mere pittance to the Megataxers.

Superintendent Perri, a resident of the area, resigned just three months later in December 2020 but it was not made official until Jan 19, 2021.

Next up…Duarte Unified School District, introducing Ken Bell, Bradley Patterson, and Erickson-Hall Construction.