A crooked road to Arroyo Grande?

October 21, 2014
Mayor Tony Ferrara

Mayor Tony Ferrara

Editor’s note: The Arroyo Grande ordinance limiting how the mayor and city council members may legally interact with city staff is at the bottom of this story.

By KAREN VELIE and DANIEL BLACKBURN

Business owners and city staffers in Arroyo Grande have come out with accusations of graft and corruption by Mayor Tony Ferrara and other city and county officials.

The charges leveled against Ferrara and others include theft of public resources by public officials, threats and harm to political opponents using city resources, attempts to get kickbacks from contractors and misspending city money to support a favored developer.

Ferrara also is the newly-elected president of the League of California Cities. He did not respond to detailed questions from CalCoastNews.

As a member of the Arroyo Grande City Council, Ferrara is permitted by state and city laws to work with the council to set policy — and then may instruct only the city manager to carry out the council’s orders. Mayors and council members are prohibited by law from acting alone in giving orders to the city manager, or from instructing other city employees to do their bidding.

But several developers, business owners and Arroyo Grande employees accuse Ferrara of ordering staff to do work for him using city equipment. California law makes the personal use of equipment and city staff for personal use a crime, theft of public services.

On Sept. 27, Ferrara had three public works employees, two city trucks and one city backhoe at his home to remove a pear tree that had fallen over. The team cut up the tree and took the wood to the city corporate yard for disposal. A week earlier, Ferrara had another public works employee at his home moving a television set from his living room to his garage, employees said.

Tony Ferrara's fallen pear tree.

Tony Ferrara’s fallen pear tree.

Shortly after CalCoastNews began asking about the use of public services for his private home, the city issued a bill to Ferrara asking for $196 for the tree removal. The bill came on Oct. 6 and Ferrara paid the bill on Oct. 10.

Three days later Ferrara told the city council that he had been charged a hefty fee for the removal of the tree. But a half dozen local tree specialists gave estimates all starting at a higher rate than the mayor paid the city.

City Clerk Kelly Wetmore explained why the city had staff work on private property saying that because a portion of the tree was on the sidewalk, the city was responsible for its removal.

However, Commander Kevin McBride, a 30-year veteran on the Arroyo Grande Police Department, said that in some cases city employees will remove a limb dangerously obstructing the sidewalk. But city staff does not chop up and remove entire trees for homeowners, he said.

Last week, CalCoastNews contacted public works staff at five local cities. Each of the staff said that, in their city, removal of a tree was the homeowner’s responsibility. However, if a dangerous situation has been created and the homeowner is not able to remove a sidewalk obstruction, those cities will remove limbs covering the sidewalk, and require the homeowner to remove the remainder of the tree.

In addition to allegations of theft of public services, business owners accuse city officials of using threats of withholding contracts in order to promote their political opponents and squelch critics.

Several mayoral elections ago, one of Ferrara’s critics had SLOCO Data and Printing print and mail out pamphlets that painted a negative picture of Ferrara.

Julie Tizzano, the owner of the Arroyo Grande business, said she was approached by Councilman Jim Dickens and told that if she did not mail out a correction, she would no longer do business with the city. She refused Dickens’ demand.

“They threatened me for political gain,” Tizzano said. “Aside from several small jobs that only I have data for, I never received another job from the city.”

Other business owners contend Ferrara works with the city manager, city attorney, and community development director in a convoluted, dysfunctional fashion that has cost those owners millions of dollars. Most said their biggest problem has been receiving specific directions from staff, complying with those directions, and then having city officials or other staffers change the direction delaying the project adding to costs for the developer.

Many say they will not work in the city of Arroyo Grande as long as Adams and Ferrara are in charge.

About 10 years ago, former Community Development Director Rob Strong promoted several changes to the city’s general plan to alter land use policies. Several months later, he entered into a short-term escrow on a property that included a large parcel of land and two older homes, known as the Cherry Creek property. Strong did not have the money to purchase the property, according to a disclosure that he made.

Strong then contacted San Luis Obispo businessman Cliff Branch and recommended Branch develop the Cherry Creek property with a neighboring property owner, Branch told CalCoastNews in an email. The development required Branch to carry on a dialogue with Ferrara, Adams and City Attorney Tim Carmel, he wrote.

“Over the course of a year, we communicated extensively about the project,” Branch said in an email. “As the months passed, I realized I had landed in the twilight zone of the city government, where I felt continually misled, misinformed and/or intimidated.”

During the period, Ferrara sought a meeting, Branch wrote.

“At one point, Mayor Ferrara asked to ‘meet privately,’ and the two of us sat alone in the council chamber,” Branch wrote. “The mayor proceeded to give me a stern lecture on how to conduct myself during ‘his council meetings’ and strongly implied that it would be inadvisable to ignore his advice.

Strong later asked Branch to provide him with a purchase agreement for a lot with one of the existing homes on the Cherry Creek property at a favorable rate. He told Branch that he supervised the Arroyo Grande staffer who would be the city planner on the project. City planners can either expedite permits and other requirements or delay and possible destroy projects.

“It had always been a questionable situation because the city planning director had negotiated an option to purchase an existing house in the development, at a set price, which was highly unusual,” Branch said.

The city took no action, Branch said.

“The planning director warranted that he had made all proper disclosures to city officials. Ferrara had later said that it was ‘not an issue’ because a disclosure form was filed and approved by the city attorney,” Branch told CalCoastNews.

About seven years ago, while the project was still in the approval process, Strong left the city and the developers began working with Adams and Teresa McClish, the city’s new planning director.

“It was my impression that Adams simply ‘took orders’ from Ferrara, so a bad situation became even more dysfunctional,” Branch wrote. “It was also my experience that that City Attorney Tim Carmel conducted the city’s legal affairs with remarkable arrogance. Mr. Carmel once stormed out of a meeting called by the city in a truculent fashion while other city staff members remained at the table, stunned by the city attorney’s behavior.”

In the end, San Luis Obispo County Supervisor Caren Ray, a former Arroyo Grande city official who was involved in the projects approvals, purchased the home that Strong had optioned. By that time, the home had undergone extensive remodeling.

Then, on March 4, 14 days before the closing of Ray’s home, the Arroyo Grande Planning Commission, which includes Ray’s live-in boyfriend Randy Russom, noted an administrative decision in the meeting minutes to designate the recently purchased home as historical.

Because of the Mills Act, this decision will lower Ray’s property taxes by as much as 90 percent as compensation for limiting future remodeling and construction work on the home.

Several years ago, Rick Loughead, another prolific developer and the owner of Dolphin Bay in Shell Beach, was working on a project in the village area of Arroyo Grande. However, because of issues with misdirection from city officials and staff which stalled project approvals, Loughhead said he sold the project at a loss and that he will no longer work with the city.

“It was a difficult and convoluted deal with Ferrara, Adams, and the planning director,” Loughead said. “I couldn’t work with them and I sold the property.”

In 2004, when John and Beatrice Spencer agreed to convert a vacant building in Arroyo Grande into a Spencer’s Fresh Market, they did so at a cost of several million dollars with assurance from the city that the Courtland Place parcel across the street would include courtyards and small size shops and not a large supermarket, John Spencer said. However, several years later, developer Nick Tompkins began negotiating a deal to place a large discount grocery across the street with the city manager’s support — prompting the Spencers to close their Arroyo Grande store.

In 2011, Doug DeBerti approached city planners to get pre-approval for his plan to put a surf shop in the former home of J.J.’s Market. After receiving assurance from McClish that the project would sail through quickly, he purchased the building from Tompkins.

ag mura 3

The mural the city denied and then approved.

Then city officials asked DeBerti to share his parking lot with Tompkins and he declined.

“After that things went south,” DeBerti said.

Nine months later, city officials rejected DeBerti’s proposal because of issues they had with the driveway, as well as a mural he wanted to place on the side of the building. In the end, the building went back into Tompkins’ name. City officials then approved Tompkins’ request for the same mural and driveway that DeBerti had proposed.

“If this isn’t corruption, I don’t know what is,” DeBerti said.

City Manager Steve Adams and Teresa McClish

City Manager Steve Adams and Teresa McClish

In addition to complaints of the financial and emotional cost of attempting to deal with the city, residents question the cost to taxpayers for sweetheart deals to favored developers.

In 2010, Arroyo Grande was dealing with a deficit. The city council was looking at cutting money from after-school programs and reducing the budget for police.

The council then voted to buy the former Farm Credit building from Tompkins to use as City Hall. The $2,020,000 purchase price was almost twice the market value for the building. The council paid about $1 million too much to Tompkins, local appraisers said.

 

Arroyo Grande Ordinance 2.08.080, administrative relationships:

The council and its members shall deal with the administrative service of the city only through the city manager, except for the purposes of inquiry, and neither the council, nor any member thereof, shall give orders to any officer or employee of the city under the supervision of the city manager. The city manager shall take his or her orders and instructions only from the council as a body, and no individual member of the council shall give any order or instruction to the city manager. Any subordinate officer or employee receiving orders or instructions contrary to the provisions of this section shall report the same in writing immediately thereafter to the city manager, and the city manager shall promptly forward a copy or summary of such report to each member of the council. He or she shall likewise promptly advise each member of the council of any order or instruction received by him or her contrary to the provisions of this section. It is not intended by the provisions of this section to restrict unduly the privileges of a member of the council to request the city manager, but not any other officer or employee under his or her supervision, to prepare a report dealing with any matter of city business, or municipal affairs generally, if such report can be compiled without the undue dislocation of city activities and without the expenditure of considerable quantities of time by city personnel.

 

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slolivin

I have witnessed this City Corruption in Arroyo Grande for many years. This issue has always been that like the Mafia, if you speak out against them your business will suffer. I applaud the people who have spoken on record to bring this to light. I know this focus is on Arroyo Grande but currently Tony’s buddy ex mayor John Shoals is trying to get reelected. I have heard many story’s that are similar and even worse when Shoals was the Mayor. It concerns me that with Measure K-14 bringing 40 plus millions of dollars intended for Grover Beach roads, John Shoals would have another opportunity for graft.

We have an important election coming up for both Arroyo Grande and Grover Beach. Lets keep the crooks out of our community! Has Cal Coast News ever looking into the dealings of John Shoals??? Perhaps people are ready to speak out now?


HarryMalone

Slolivin

You take a cheap shot at John Shoals with no details. Obviously you are a pathetic shill for Debbie Peterson.


Mike Byrd

John Shoals is a nice guy and, I suppose, means well. But he had a chance to stop the corruption in the sanitation district and didn’t. Mayor Peterson took it on and turned a hemorrhage of red ink into the black in less than a year. But we still don’t know what changed in 2006 because Mayor Ferrara blocked the audit.


If Mayor Peterson is reelected and Jim Hill is elected the coverup will end and we will know what drove the sanitation district to the verge of bankruptcy.


agag1

His close ties and connection to Mayor Ferrero make him suspect as well.

Remember the birds of a feather?


AAADADDYO

mike i appreciate that you are level headed

some on this site have made assumptions that are hurtful to peoples reputation and down right mean, this does not help anyone trying to forward thier cause.

regardless of what people think about council thier cars should not be damaged or rumors started that have no basis in fact


dogeatdog

I would like to hear about ANY council member having their car damaged. I read about a citizen having their car damaged, and there were pictures in Cal Coast news showing the damage.


Why does someone feel it is okay to write N—— on someones car, and across a sign they had in there window for Write in Jim Hill.


AAADADDYO I don’t think you have your facts straight.


agag1

If anyone’s car is vandalized they should call the police.

No doubt the police will be professional

in spite of their current situation with regards to the council.


casappleton

John shoals is a liar. I sat in the candidates forum and couldn’t believe the lies he told about the San District. He knew everything going on at the plant and did nothing. no John shoals


falconbh

We all need to be concerned with this Double Taxation Road Tax.

When you add the New Road Tax Increase with Cuesta Building Tax Increase, and South County Sanitation Tax Increase.


Can You Really Afford All These New Tax Increases !


If they pass, it will only give the Green Light for More New Tax Increases and Automatic Rate Increases in the Next Election.


analyticone

I wish they would. Two developers in Grover Beach have stories of losses of hundreds of thousands of dollars based on Shoals’ failure to deliver on promises to support their projects. How sad for Grover Beach that their funds were lost rather than invested in redevelopment. If business people would have the courage of their convictions and stand up to corruption we would have less of it and more prosperity.


analyticone

I hope so. I know of two developers who lost hundreds of thousands of dollars because they believed Shoals’ promises to support their projects. How sad for Grover Beach that could have had much needed redevelopment and got instead two broke developers.


I hope the brave business people who spoke up will lead the way for more business people to stand for what is right. This is the only thing that will stop the corruption and pave the way for legitimate prosperity.


Whyaduck

I, too, am proud of – and thankful for – the sources who came forward for this story, although I do not view Mr. Branch as a good guy in all of this. He paid to play. He made a profit by compensating a city employee in return for a deal.


He may have plausible deniability but he is part of the problem.


surferdude

I cannot believe Chuck Fellows. He hates Tony and Tony hates him. Why they hell has he come to the Mayor’s defense. His daughter could have been left our of this.She is so new and dumb and really does not know the manure they have all stepped in.

Chuck Fellows did not run again cause he could not stand working with TONY.


And now he is worried about the citizens that feel intimidated not to come to the mayors defense. Do they want to defend King Tony’s actions with Doug Deberti and the Rick Loughead? There is more to this story.


IronHub

“To sin by silence when they should protest makes cowards of men.” — Ella Wheeler Wilcox


StakeHolder

This story only touches the tip of the iceberg. How many more developers and business owners have been victim of their tactics? When Doug DeBerti left the Village, the newspaper article quoted the attorney saying 6 others called in to him saying the experienced similar stories.


And, think now many more have NOT step forward?


Anyone who can read these testimonials and STILL support Ferrara and blind. I ask them to put themselves in the shoes of those who have experienced this harassment and threats. Would they still support Ferrara? The supporters are only supporting because they have not had this personal experience. Please look around…it IS happening!


Oh, and shame on Jim Dickens for being a puppet for Ferrara. My guess is he was sent to do Tony’s dirty work to SLOCO Data.


surferdude

If you are a developer,contractor or merchant who has been pressured by the City and the MAYOR, now is the time to speak up.


Call the District Attorney, the Chief of Police, this website, you must speak to someone about this NOW.


Not one employee has come to the defense of the MAYOR or City Manager. Why???


wineguyjc

surferdude,


Good point, but city employees have been co-participants in the misconduct for years. They are the ones that actually put the pen to paper to implement the questionable acts that go on in this fair little town. City leaders would be left pissing in the wind if it were not for the co-participant acts of staff. Just think, how did 80 minutes of surveillance tape disappear without the help of IT staff?


surferdude

wineguy-


They can come clean now —better late than never.

That looking over your shoulder thing gets old ya know.


doglover

The Council should save themselves, make a statement that they want to heal the City and finally place Adams on leave, They should save themselves.

Why do they continue to have Ferrara’s back?


They must come clean on why they tried to keep this a secret and why did they ALLOW the MAYOR to be in charge of everything.


He has ruined the entire Council so sad….


agag1

City Council meeting, Tuesday Oct 28, 6PM.

May need to bring your own chair, I understand there was a shortage at the last meeting.


Oh, and be prepared to fill out a speaker slip, I hear they were required at last night’s planning commission meeting for the three (3!) who chose to speak about this story.


Also heard the Police Chief was in attendance, sent by city attorney Mr Carmel, to control the crowd of less than 10.


kettle

agag1 says:” I hear they were required ”


From the League of California Cities document on the brown act, page 28.


http://www.cacities.org/Member-Engagement/Professional-Departments/City-Attorneys-Department/Publications/Open-Public-IV_-A-Guide-to-the-Ralph-M-Brown-Act-%28.aspx


“Members of the public cannot be required to register their names, provide other information, complete a questionnaire, or otherwise “fulfill any condition precedent” to attending a meeting. Any attendance list, questionnaire, or similar document posted at or near the entrance to the meeting room or circulated at a meeting must clearly state that its completion is voluntary and that all persons may attend whether or not they fill it out.”


SamLouis

This isn’t my area of expertise but the old saying “follow the money” has proven time and time again to be sage advise.


I’m like to see the IRS and a DA investigator crawl up Ferarra’s colon…


SamLouis

If Ferrara had a scintilla of character he would bow out of the mayoral race right now. If his intent was truly to serve his constituency and not his bloated ego he would retire.


If he gets beat in the coming election the healing can begin. If he somehow survives the election the environment will become utterly toxic at AG City Hall. I expect a number of employees will file lawsuits and/or go out on stress disability. In the end it will cost the taxpayers more for less service.


surferdude

If Tony is reelected, then what?


Recall, arrest? more investigations? Grand Jury investigation?


No resignation from Adams? Lawsuit by McClish?


How will anyone effect change?


What will be the role of the Police? Police Management?


Are the current City employees looking for work?


THE POWER THAT KING TONY FERRERA DEMANDS MUST STOP!


SHOW up at the next City Council Meeting and share your disgust!


6 pm City of Arroyo Grande


doglover

Please so many of the citizens I speak with think that Adams has resigned.


The message needs to be made to the voters. Adams did not resign. He will probably stay on if Tony Ferraro gets elected again.


What is the threat of repercussions for the Change Gang?


This City Council has lost its ability to listen.


And… DO NOT put your heart and soul in an investigation that will be a whitewash.


Employees will have to come forward.’I am so sorry it has been so terrible for you.


There are people that you can contact.. the DA, the FBI, a news source that must keep their sources confidential.


We are behind you and we need your story.


agag1

Steve Adams’ resignation letter was nothing more than an ad, as VAndrews has said.

if Ferraro is reflected, Steve will not resign, and the Mayor and his council will take their dirty business even more underground, as now they are on notice that people WILL come forward.


write-In Jim Hill for Mayor


Share this story with your Facebook and email contacts.

People need to know, and they’re not going to learn it in the Trib.


Gordo

The pear tree is small potatos. The shakedowns of developers and having boyfriends on the planning commission designate a newly remodeled home historical to get a tax break constitute public corruption.

Someone who has received this information first hand needs to contact the FBI, Los Angeles Division at 310-477-6565 and forward this story to their public corruption unit. It has to be the FBI because the District Attorney isn’t going to touch this, not during a transition with Caren having a vote on their budget. The state A.G. Kamala Harris is too focused on running for office to be effective on something like this, but the FBI should find this right up their alley.

I hope someone in the know will contact the Federal authorities.