19D - RESPONSE TO ORANGE COUNTY GRAND JURY

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The Honorable Judge Kim Dunning August 16, 2010 Page 5 M2 Call for Projects in the fall of 2010, and we are on schedule to meet critical milestone dates for future local and federal funding opportunities. FINDING F-5: Lack of Transparency: Elected City officials violated the intent and specific provisions of their Code of Ethics and Conduct as well as provisions of AB 1234, the Government Transparency and Fair Process Act. City leaders and elected officials failed to provide transparency and public input in the contract award, possibly violating the Brown Act. RESPONSE: We disagree wholly with this finding. In all three cases, the report erroneously relies upon inaccurate and misleading statements of the law. In fact, when the particular standards are evaluated, it is evident that either the law has no application to the facts in the report or the report is totally lacking of evidence to support the conclusion. Further, when reliance upon these resources is stripped from the report, the remainder lacks substance and is reduced to rumor and innuendo. As such, these sections and all references to their content should be stricken from the report. Sections 4.7 through 4.9 of the Report as well as Finding F.5 rely upon three legal resources to support their conclusions: The City of Santa Ana Code of Ethics, AB 1234 (California Government Code Sections 53234-53235.2) and The Ralph M. Brown Act (California Government Code Sections 54950-54960.5) No City Code of Ethics Violation Section 4.7 of the report states that the "... City Council actions in awarding the final . . . agreement to Cordoba Corp. violated the intent of the published Code of Ethics and Conduct." In reaching this conclusion, the Grand Jury cited to non-existent sections of the Code of Ethics. The provisions that the report asserts are contained in the Code of Ethics are, in fact, merely preliminary findings of the City Council as part of the resolution adopting the Ethics Code. They are not part of the Code at all. The Santa Ana Ethics Code, a copy of which is attached to this letter, does not contain any standards or requirements that have any application to the subject matter of the report. No AB1234 Violation Section 4.8 attempts to establish that various aspects of the process violated specific State-imposed standards for transparency in governmental decision-making. The Report completely and materially misrepresents both the intent and the letter of what it describes as AB 1234. Assembly Bill 1234, passed in 2005, primarily deals with standards for compensation and payment of travel expenses for various local officials, and arose from perceived abuses by several special districts in the state. The only portion of AB 1234 that even arguably addresses issues of ethics and transparency are Government Code Sections 53234 - 53235.2 which require local elected officials to receive biennial "ethics" training. Nothing in these sections, however, establish "standards for government officials in the conduct of their duties" as postulated by the report. Specifically nowhere in AB 1234 are found the five bulleted requirements 19D-5