By John Earl
Surf City Voice
Editor’s Note: This is the first of a 3 part story
Since 1957 a vote of the people has decided who would be the Huntington Beach City Attorney. Since 1978 no incumbent holding that office has lost an election. Gail Hutton, who defeated incumbent city attorney Don Bonfa in the city election that year, easily remained in office until her retirement 24 years later in 2002.
Her replacement, Jennifer McGrath, was elected to the office next with 48.2 percent of the vote in a race against three opponents, but she ran unopposed in her 2006 reelection campaign.
Next November she will have one opponent listed on the ballot, T. Gabe Houston, who officially signed his candidate’s papers at the City Clerk’s office on Aug. 6, the last day to file.
Like other City Attorney challengers, Houston may also end up as election fodder. But his late entry reveals a serious flaw in the Huntington Beach City Charter—despite nine months of work by the City’s Charter Review Commission that recommend reforms—and exposes the hidden attempts (and not so hidden attempts) by various members of the Huntington Beach City Council to gain political power by manipulating the reform process for better or worse.
Previously, the Voice showed how the council’s backroom political dramas have come to center stage at city council meetings. But recent e-mails obtained by the Voice give a sharper picture of the passion and acrimony flowing through the political veins of the city.
Some of the conflict centers on the office of City Attorney. One side wants the city attorney to be elected by vote of the people; the other side thinks that he or she should be appointed by the council or the City Administrator.
Related to that debate is the larger issue of how best to control the city’s budget when residents face severe cuts in essential services; specifically, how to take care of the city’s infrastructure shortfall and deal with public employee union pension costs that the city is obligated by contract to pay.
Houston’s last minute appearance at City Hall might have gone barely noticed if it had not followed a recent wave of discontent against McGrath stirred up by Chip Hanlon, publisher of Red County, the popular Republican blog, and city Councilmember Devin Dwyer, over McGrath’s interpretation of Section 617 of the City Charter.
Section 617 was entered into the City Charter by the city’s voters in 2002 as an amendment. It requires 15 percent of the city’s budget revenue to be spent on infrastructure.
City councils since then have interpreted Section 617 to allow the fund to include debt service for bonds that finance infrastructure.
Consistent with the obligations of her office, McGrath gave the current council a legal—not personal—opinion in favor of that interpretation last February.
McGrath’s ruling was reasoned, based on an analysis of the wording in Section 617 and the charter overall as well as in-depth research of case law as noted in four citations of court rulings.
Despite a warning by City Administrator Fred Wilson that public safety services would have to be cut, remarks by Councilmember Dwyer at the June 7 City Council meeting left little room for doubt that—by excluding debt service for infrastructure financing from the infrastructure fund in the future—he hopes to force a budget crisis that will require renegotiation of existing union contracts that he believes create bloated pensions for public employees and are the root cause of the city’s financial troubles.
“We are no longer going to be able to hire police officers, firemen, anybody that can retire at 50 years with 90 to 98 percent of their wage,” he predicted. “We can’t continue to do that. That is where the savings is going to be.”
Red County Revolution Vs. the Messenger
Due to her legal guidance to the council on Section 617, McGrath, a Republican, is at direct odds with the “Second American Revolution” declared by Orange County Republican Party Chairman Scott Baugh in a speech to the party’s governing committee last January.
“These are times that try men’s souls,” Baugh said, almost crying as he officially announced the revolution. He issued stern edicts for purging the Party of apostate candidates who take money from or are endorsed by public employee unions and don’t act to cut back public employee pensions.
McGrath has pledged not to accept public employee union money, but Baugh made it clear he doesn’t want just any Republicans in office, but “reformers” who will follow the straight and narrow path of “limited government” no matter the political risks.
Outraged by McGrath’s legal ruling, Hanlon, who has a complex background as a an investor and is regularly featured on CNBC as a market analyst, has taken a lead role in Baugh’s Red brigade by using his blog to expose what he calls the “Surf City Swindle,” namely “…pilfering mandated infrastructure dollars for other purposes” by the Huntington Beach City Council—using McGrath as the poster enemy of the Revolution and the target for his Red wrath.
In his analysis on Red County, Hanlon called McGrath’s legal opinion “tortured” and “mindless” but did not cite any wording in Section 617 that prohibits the inclusion of debt service for infrastructure in the 15 percent set aside of city funds, nor did he attempt to refute the application of any of her case law citations.
But he accused “big-spending city councils” without the backbone to stand up to unionized city employees of relying on a “compliant City Attorney” to give them carte blanche to “avoid spending the required percentage [15 percent] of the budget on infrastructure,” even though McGrath’s ruling was based only on the interpretation or meaning of “infrastructure” as contained in the charter and did not give the council that authority.
Hanlon warned McGrath, also a Republican, that she would probably face “the strongest challenger she could imagine this Fall (sic),” one who is “Extremely close in [Republican] party politics…close with the Rohrabachers…very recognizable name…connected to the donor community in a big way,” and that she would faint when she heard about it.
“It’s a stunning development,” Hanlon added, “and we’ll be watching like hawks for an official announcement on this one.”
Dwyer’s Wrath Vs. McGrath
Next, Councilmember Devin Dwyer, a Red County favorite, also picked up Baugh’s Red hammer and repeatedly hit McGrath (and, a couple of times, Councilmember Jill Hardy) with it during a June 7 council meeting in a long discussion about what charter reforms recommended by the Charter Review Commission should go on the November ballot.
One of the most controversial agenda items was the recommendation to exclude all debt service from the city’s infrastructure fund, exactly what Hanlon and friends say Section 617 called for in the first place.
In her officially impartial role as City Attorney, McGrath helped the commission to write the new language that closes the so-called loophole in current version of Section 617, a fact noted on the Red County blog by commission member Joe Shaw who made the motion to create the revision (Shaw also served on the Public Works Commission as an appointee of Dwyer and is currently a city council candidate).
But Harking back to her 617 legal opinion, Dwyer repeatedly snapped at McGrath for being “another lawyer” who uses “legalese” to “twist things,” in this case the meaning of the word infrastructure, to thwart the true will of the voters.
McGrath shot back. “Excuse me…Councilman Dwyer. I have to take exception. I am not twisting the definition of infrastructure … I am reading it out loud, what was voted on by the people. So, that’s not a twist and that’s not legalese.”
But Dwyer continued to accuse McGrath: “It gets twisted,” he said; “You see, that’s where I think the interpretation gets twisted by a lawyer. I don’t see how we can define it so finite that you keep lawyers out of it,” and so on.
The 617 revision was placed on the November ballot by a 4 -3 vote of the City Council, but even if it passes it won’t kick in until 2017, when the current council members won’t be in office to make the tough budget decisions they say so urgently need to be done.
“Lacking the courage or fortitude to address the issue as part of the budget process, they are relying on the knee jerk reaction of voters to support a measure that purports to be about infrastructure,” former Huntington Beach mayor Debbie Cook told the Voice.
Cook helped to write the arguments against the upcoming ballot measure.
“It’s more likely a ruse to create a wedge issue for the next election and to attack their favorite target—public employees,” she concluded.
Dwyer’s attack gave McGrath more reason to take Hanlon’s threat seriously, even if it might turn out to be Red hot air.
On June 19 McGrath informed the Voice that she had been told personally by Scott Baugh that he was considering running against her. Her campaign literature would reference that he is a potential candidate, she said.
Dwyer, whose forte is political mini dramas in which he plays the leading role, rubbed more salt onto McGrath’s wounds on Aug. 2 when he heroically—at least in the eyes of Red County and the OC Register’s editorial writers—delineated his vision of the good vs. evil side of the budget debate by announcing that he had arranged, in keeping with a previous promise, for the Howard Jarvis Taxpayers Association to donate $8,800 to the city for the cost of placing the Section 617 revision on the November ballot.
“It’s taxpayers vs. the special interests, those who would rather preserve bloated contracts than spend on the most basic needs of our citizens,” he righteously proclaimed, drawing a line in the political sand with Taliban like precision.
A PAC was being formed, he said, and the city would get the check within a week.
Meanwhile, McGrath nervously waited for the possible arrival of her secret opponent.
End of Part I. Next, Part II: Who is T. Gabe Houston and How Did He Get On the Ballot?
Part III: Keith Bohr’s Dear Jennifer Letter