Torrance City Council – A Town Hall Style Conversation About Local Politics

At its last meeting, the School Board authorized a complicated lease financing arrangement that would allow the District to borrow $12 Million. According to the approved resolution, the monies are needed to fund the construction of gymnasium facilities and school modernization projects such as roofing, electrical and pavement improvements, science labs, lockers upgrades, painting, and related site work.

Gymnasium facilities and the aforementioned school improvements were previously listed among those projects that would be completed with funding from the nearly $200 Million voter approved bond measures T and U passed in 2014.

In addition to the listed projects, the monies may be used to fund a reserve fund. District reserves have plummeted in recent years as TUSD deficit spending has soared. As recently as Fiscal Year 2013-14 the District had a budgeted $46.1 Million in reserves. Shortly after receiving a qualified certification from the California Department of Education last June, the District released a budget showing the reserve amount was expected to drop to only $5.2 Million by FY 2019-20. That figure was $2.3 Million below the state mandated minimum.

Per the approved resolution, the terms of the lease financing agreement shall not exceed 30 years and true interest costs shall not exceed 4.50% per annum. The transaction will cost TUSD approximately $417,374 in fees. The total payment amount of the $11,870,561 loan was calculated to be $19,148,454.

As part of the complicated financial transaction the District authorized a ground lease of the Levy Adult School, and the Griffith Adult School (including the Gene Drevno Community Day School) to the Torrance Unified School District Public Facilities Corporation. If the valuation of those properties is deemed insufficient, then the District authorized that J.H. Hull Middle School and the District offices could be added to the Lease Agreement. The District will then sublease the property back from the Corporation.

Per one resource, an advantage of the complicated financial instrument is that it allows a government body to fund a project without incurring a debt that might normally be subject to voter approval. Potential risks include high interest rates and risk that the government body could lose its accumulated equity in the leased property if it cannot make the lease payments and is forced to return the leased property to investors.

The District will be obligated to make the payments owed due to the lease financing agreement from its General Fund. The School Board passed the measure without discussion.

Torrance teachers picketed outside District offices on Monday during that evening’s School Board meeting in protest to stalled contract negotiations. At the meeting, Torrance Teacher Association (TTA) leaders and several of their members either spoke or read letters submitted by other teachers in the District. The speakers commented on the lack of respect and support felt by individual teachers and echoed talking points providing to TTA members.  Some of the concerns raised by the TTA and its members were:

• The administration implemented expensive programs (i.e  Solution Tree, RTI, FWEC, and Power School) and a pricey phone system without seeking input from teachers;
• Expensive training for new programs takes teachers away from the classroom;
• New programs do not seem to be yielding any benefits to students;
• Classroom instructional time is being supplanted by extraneous testing (i.e. GATE, ELPAC, Interim CASPP, F&P, and PSAT);
• New programs seem designed to extract more and more data from the students versus enhancing their education;
• When TTA demanded that TUSD spend down its reserve, TTA didn’t think that the administration would be allowed to go on a spending spree that would place the District in a position to not be able to afford salary increases and class size reduction.

After 10 months of bargaining, the TTA negotiation team had actually reached a tentative agreement with TUSD last October. In a newsletter to members at that time, TTA leadership noted that:

Over the past two years, TUSD has seen an increase in spending, programs, and position restoration/creation that has, for better or worse, significantly impacted the TUSD budget putting TUSD in a position to be staring at a funding shortfall in 2020. The TTA bargaining team feels that this agreement represents the “best deal possible” given the current priorities of the school board and TUSD administration.

In the last negotiated labor agreement, effectuated July 01, 2016, teachers received a 4% across the board raise, a $2800 cash bonus, and a $500 increase to their health and welfare contribution.

In comparison, the tentative deal included only a paltry 1% raise. The tentative agreement also included a controversial move to a new school year calendar that would have a pre-labor day start date beginning in the 2019-2020 school year.

The proposed deal fell through when it was not ratified by the TTA membership.

During the meeting, the School Board also accepted the 2016-17 audit report. That report reflected a $10 Million decrease in the District’s net worth as it fell from negative $18.6 Million in 2016 to negative $28.7 Million in 2017. The decrease was due in part to a 15.2% increase in costs for all programs and services which raised total expenditures to $311.3 Million from $270.3 Million in 2016. The report noted that a significant contributor to the expenditure increase was due to increased salaries and benefits.

Eve Irvine was sworn in last Tuesday as the first female police chief to lead the Torrance Police Department. In the same meeting, two key roles within the City Attorney’s office were filled. Tatia Strader was appointed as Assistant Attorney while Brandon Gonzaque received an appointment as Deputy City Attorney. The appointments followed the recent elevation of former Assistant Attorney Patrick Sullivan to the City Attorney post. These new leaders will take on the challenge of heading beleaguered City Departments beset by recent scandals.

The Police Department, in particular, has experienced a series of eye opening incidents. Signs of trouble began to show when it was discovered that former Chief Matsuda was suspended due to reports that he made hostile remarks about women, blacks, gays, and muslims. Oddly, news of that suspension did not initially come from City officials. It was the Daily Breeze that broke the story after being contacted via e-mail by persons that appeared to be officers within the department. Matsuda returned to his post after a personnel investigation, but the results of that investigation were never made public.

Shortly after Matsuda returned to work, the Daily Breeze printed another bombshell report. In that article, it was revealed that Lieutenant Hector Bermudez filed a lawsuit alleging that Matsuda obstructed an internal criminal investigation and retaliated against Bermudez. According to the lawsuit, Bermudez, as head of internal affairs, was leading an investigation into unlawful uses of police databases. The suit alleges that Bermudez discovered that a department employee was illegally utilizing a police database in furtherance of an off duty job providing security for the Los Angeles Lakers and other professional athletes.

Bermudez claimed that during the course of his investigation he was confronted by a former captain in the department who told him not to follow up on leads and interview potential witnesses. When Bermudez complained about the obstruction to his superior he received an unfavorable performance evaluation and was denied a possible promotion to Captain.

The outcome of that internal investigation initially led by Bermudez has yet to be made known to the public. A week after Bermudez filed his lawsuit former Chief Matsuda unexpectedly retired. City officials did not comment at the time on whether they played any role in Matsuda’s exit.

The Police Department has also been plagued by several lawsuits involving police shootings and other matters. One of the most recent was filed by the 14 year old son of San Diego woman who was killed after a short car chase.

The City Attorney’s office has also been embroiled in an number of controversial matters over the past few years. In one of his last acts, for example, former City Attorney John Fellows announced that anyone having a relationship with any of the attorney’s in his office was effectively immune from prosecution. The pronouncement stemmed from the failure of his office to prosecute Mayor Furey for criminal violations of the City’s campaign finance laws. Fellows retired from the City’s attorney’s office as the highest paid city employee in terms of Salary. His salary in 2016 was $290,318 with total compensation of $385,168.

The City’s self insurance fund, used to pay for outside legal services, has been depleted so much due to legal fees that it has required the Council to divert large sums from other sources to replenish the fund. The City, however, has provided scant information about how these outside firms are selected to represent the City and how much they are paid. The law firm of Rutan and Tucker, for example, has enjoyed a cozy relationship with the City for many years receiving untold millions in legal fees.

As one reference point, the City of Torrance paid Rutan and Tucker $410,000 to prohibit a 33 year old woman who suffered from cerebral palsy from obtaining a designated handicapped parking space in front of her home. The City eventually lost the case and the curb was painted blue. The embarrassing legal loss, however, appears to have had no impact on the City’s relationship with Rutan and Tucker as the firm has been hired to represent the City on several other cases since that time.

Interestingly, former City Attorney John Fellows was named a partner at Rutan and Tucker shortly before beginning his employment with the City.

Given the above, the City could improve transparency and communication with the public by implementing the following measures:

• Solicit competitive bids for outside legal services and allow public and Council to comment in open session on the merits of each firm seeking to represent the City;
• Disclose to the public how much each outside firm it utilizes is paid in legal fees on an annual basis;
• Provide a listing on their website of all active lawsuits in which the City is a party and their current status;
• Publish on their website publicly available court documents pertaining to active lawsuits;
• Notify the public immediately of all legal settlements;
• In high profile matters, such as police shootings, inform the public of what measures were taken and notify the public of the results of any internal or independent investigations.