Former Davis Mayor Ann Evans has sent a letter to the city, lobbying them to “rise to the occasion and direct your staff accordingly. There is so much to be done on your watch, but affordable housing availability is not the least of those important items.”
Ms. Evans is married to David Thompson of Neighborhood Partners and Twin Pines Cooperative, one of the developers of the DACHA project. The letter was dated January 30, 2012 and as a letter to the city is a public document.
Here is the full text of the letter:
My husband David J. Thompson is a whistle blower. A cooperative housing developer and member of the National Cooperative Hall of Fame, he is concerned about city staff not following Davis’s affordable housing policies that has cost the city millions of dollars.
Over the past six years the staff have forgotten to put second mortgages on affordable housing, tried to prevent Section 8 certificates being awarded to affordable housing and more. Recently, they have aided in the destruction of a limited-equity cooperative, DACHA (Davis Area Cooperative Housing Association).
DACHA is now a mess. Families, once housed, are displaced. A lawsuit is in progress. City Hall is fighting a small business and a statewide cooperative foundation that are courageous enough to stand up for the rights of cooperative law. Now the city owns many of the DACHA units. Most of these units stand vacant. Really?
The legal battle has cost the city over $800,000. The council faces controversy on water sourcing, unfunded pension liabilities, burgeoning park maintenance funding, and more, but it now needs to focus on affordable housing. As one who developed much of these policies on a previous council, I urge the council to ask the bigger questions as well as solve DACHA immediately.
Should the city be a landlord? A mortgage broker? What department should housing be in for professional oversight? Are there, or should there be, consequences for staff not following city policy, for black balling developers? And who carries this out? How can the city assure a stock of permanently affordable housing?
With regard to DACHA, I urge the council to make staff uphold the bylaws of DACHA and state law; halt the publicly funded staff attack on Twin Pines Cooperative Foundation; stop the waste of $2 million in public funds on DACHA’s wrongdoings; build, don’t denigrate, the city’s reputation for being in the vanguard of cooperative economic development (an important legacy left by precious councils of which you have as an asset); and as a way of immediately increasing the city’s cooperative good will, settle with Twin Pines Cooperative Foundation in a way that renews cooperative development so that good can come out of the funds expended to date, as well as energy, in bringing truth to this debacle.
Whistle blowing is what leaders do. They fight against injustice they see and they fight until they have justice. Let’s not punish them; let’s celebrate them – while they are doing it, not just after they have won. They keep us honest. There’s a pattern of abuse by staff and blindness to that abuse by council that is deeply disturbing, and it’s not limited to housing. Please find a council majority, at a minimum, which can address these affordable housing and cooperative legacy issues with heart and soul.
You are busy. You do not have to know the details. You have to know the direction that you want to give staff. This does not take much time and much reading of reports. It does take the courage of conviction to make staff follow policies in place, to create new ones where needed, to cause professional oversight with consequences for in appropriate and or illegal action on the part of staff. This is all within your power. Please use it wisely, but please use it.
Davis did not get its reputation because the council followed staff recommendation. For the most part, I cannot think of a single policy I helped create that staff supported initially, nor those of councils before me that helped to build the legacy you now can either destroy or build. This is not because staff is inadequate; it is because it is not the job of staff to have the vision. Nor, I might add, is it the job of the council to staff the vision they direct to be implemented.
I hope your council can become one of the great councils in the history books of the City of Davis. Please rise to the occasion and direct your staff accordingly. There is so much to be done on your watch, but affordable housing availability is not the least of those important items. I urge you to pay attention to the detail, to the patterns occurring in staff reporting and recommendations, and most of all, to the citizens among you who are whistleblowing. They are telling you the proverbial emperor has no clothes., and it is not only in housing.
I woke this morning to see my wife’s letter to the Council on the Vanguard.I am grateful to her for her efforts to defend my whistle blowing. As a Council Member, Ann was the co-founder of Davis Community Housing (DCH now known as CHOC). She was also a charter board member of DCH and helped get the organization funded and played a role in creating the affordable housing policies that are the base for what we have today.
She helped start the Davis Food Co-op and the Davis Farmer’s Market and has made many more contributions to activities in our city such as the Village Feast, Farm to School, etc.
Davis Community Housing created over 400 homes for very low and low income families and the housing Luke and I have done in Davis accomodates another over 330 homes. Between Ann, Luke and I we developed over 90% of the affordable housing communities in Davis. And Luke and I earned less than any other afordable housing developer and we created those homes with the lowest City subsidy required per unit.
And yet City staff fought every one of the 330 units we built. This Council should take a look at the bigger picture of the staff role in Davis. DACHA is just the tip of the Davis housing fiasco.
The war began when I blew the whistle on Harriet Steiner “forgetting” to place restrictions on 52 Wildhorse homes which lost the City a share in a gain of $11 million dollars.
Year after year, millions more have been lost, wasted, impoperly steered or forgotten and not a word from any Council. Not an investigation.
At the bottom of it are the actions of City staff. As a whisteblower I know where the bodies are buried. Just visit http://www.community.coop/davis
How much more waste can our City afford?
David Thompson, Twin Pies Cooperative Foundation
[quote]”Should the city be a landlord? A mortgage broker? What department should housing be in for professional oversight? Are there, or should there be, consequences for staff not following city policy, for black balling developers? And who carries this out? How can the city assure a stock of permanently affordable housing?”[/quote]Except for the “black balling developers” –which tends to make this sound as though it’s aimed at supporting her husband–Mayor Evans is asking very important questions for Davis.
I was surprised in the DACHA discussions to read that the city didn’t budget the time or staff (and never intended) to really oversee the DACHA operation. If that’s our casual way of managing affordable housing, we should get out of the business.
Earlier I was surprised to hear the council discuss the unit cost (to the city) of this affordable housing. If accurate, we can’t afford to be developing this kind of housing. It makes no financial sense.
Before we undertake another project–and before we decide what to do with the DACHA properties–we should take a careful look at affordable housing history in Davis, what went right and wrong.
As long as this project is so full of secrets, if we don’t analyze other past efforts and enlighten ourselves about the questions she’s raises, we’re bound to screw up future endeavors. I hope we don’t dismiss her suggestions because of her obvious conflict of interests.
[quote]halt the publicly funded staff attack on Twin Pines Cooperative Foundation;[/quote]
How has staff “attacked” TPCF??? I’m not following here…
[quote]settle with Twin Pines Cooperative Foundation in a way that renews cooperative development…[/quote]
Is this what this article is really about? A call for the city to settle with TPCF? Whether citizens of Davis would benefit from such a settlement entirely depends on the terms of the settlement, no?
[quote]I was surprised in the DACHA discussions to read that the city didn’t budget the time or staff (and never intended) to really oversee the DACHA operation. If that’s our casual way of managing affordable housing, we should get out of the business.
Earlier I was surprised to hear the council discuss the unit cost (to the city) of this affordable housing. If accurate, we can’t afford to be developing this kind of housing. It makes no financial sense. [/quote]
In other words the model was flawed from the beginning and the city should never try such an experiment again?
[quote]As long as this project is so full of secrets, if we don’t analyze other past efforts and enlighten ourselves about the questions she’s raises, we’re bound to screw up future endeavors. I hope we don’t dismiss her suggestions because of her obvious conflict of interests.[/quote]
I agree that the city most definitely needs to think long and hard about how it conducts its affordable housing program…
Interesting… the City staff that Mr Thompson/Ms Evans criticize, by and large need to file Form 700 (FPPC) each year, disclosing the nature of their financial interests… neither Mr Thompson, nor Mr Watkins have a similar requirement, tho’ public funds “trickle (?)” down to them… how about a little transparency re: the magnitude of the income they have had (and/or claim they should have had) relating to their work/other income from Davis affordable housing projects?
To hpierce: Excellent point…
Ann and David have “whistleblower” confused with “blow hard”.
“knows where the bodies are buried” sounds a lot like blackmail and
extortion.
Has David expressed any remorse that his ill conceived project caused irreparable harm to so many DACHA residents?
[quote]”In other words the model was flawed from the beginning and the city should never try such an experiment again? “[/quote]What I was trying to say was that the city should never take on any project for which it is unable or unwilling to provide adequate oversight.
If the city intentionally wouldn’t accept management responsibility to keep DACHA from crashing and to avoid the insider-favoritism, windfall profits for initial buyers and other scams that have marked past affordable housing initiatives, we shouldn’t waste tax money on these efforts in the future.
I have yet to have anyone (except David T.) accept my challenge to make the case for a single affordable housing project in which they take pride, in spite of it sitting out there for more than two years now. This just would reinforce one’s feeling that [u]all[/u] of these past models have been flawed because of the city’s inability to manage affordable housing “experiments.”
The DACHA failings were symptomatic of our municipal ambitions outracing our capabilities.
[quote]What I was trying to say was that the city should never take on any project for which it is unable or unwilling to provide adequate oversight.
If the city intentionally wouldn’t accept management responsibility to keep DACHA from crashing and to avoid the insider-favoritism, windfall profits for initial buyers and other scams that have marked past affordable housing initiatives, we shouldn’t waste tax money on these efforts in the future. [/quote]
Agreed…
[i]”The DACHA failings were symptomatic of our municipal ambitions outracing our capabilities.”[/i]
I disagree.
Everything I know about the DACHA situation suggests it was a scam from the very start. Its originating documents were biased in favor of two men–one of whom is married to a former city councilwoman–and against the people who later, naively bought in.
It is disingenuous, in my view, to blame the actions of the city staff, when this thing went in the direction it did because the two men in question had undue political influence at the start. It is not as if the city approved this thing without those two men telling the elected officials and staff that they had influence with to do this, that and the other.
The death of DACHA was in my view the consequence of an avaricious company which has profitted greatly from “low-income housing,” where most people on the outside were under the impression that such housing was supposed to be set up to benefit the low-income, but instead seems to have been set up for the benefit of two men.
If you don’t buy my thoughts on “undue influence,” then look up the personal and financial relationships the two men have and had with members of past city councils and others in power. This ability to direct the process in their favor did not come out of thin air.
And one more important thing: if you want to see an area where the city is spending money that needs to be reformed a bit, read my column ([url]http://www.davisenterprise.com/opinion/opinion-columns/set-some-funds-aside-for-history/[/url]), today.
[quote]Whistle blowing is what leaders do. They fight against injustice they see and they fight until they have justice. Let’s not punish them. — [b]Ann Evans[/b][/quote]Ann, the theory that David and Luke were punished for whistle-blowing is dead wrong. I was on the council during the period when David and Luke proposed and lobbied for this project. I was there when the council voted for the project.
Regarding David Thompson’s complaints about the windfall profits from the affordable housing without equity caps: EVERYONE, including all staff members and all councilmembers were in agreement that we didn’t want to see this happen again. Everyone was completely on the same page. There was no disagreement whatsoever with criticisms of the way the program was operating in this regard.
I was new to the council when David and Luke’s DACHA proposal came forward. I had concerns that the business model wouldn’t work. The reason was simple. Carrying charges were fairly high relative to market rents (I didn’t realize exactly how high at that point) and a large buy-in price was required (I didn’t realize how large at the time). Members did not get a chance to share in the equity; they only received something close to bank interest on their membership shares.
So I asked Luke Watkins specifically whether the carrying costs would go toward paying off the mortages, so that the shares would maintain value based on the expectation of future lower rents. Luke answered “No, the equity is going to go toward expanding the co-op”.
I told Luke that I still had concerns, and he told me that I didn’t understand co-ops, that he was the professional and that I should trust him.
I was still concerned that this could be a fatal flaw, i.e., that might not be sufficient advantage to members over renting on the open market.
I expressed these concerns clearly to staff. Staff said that they shared my concerns, but ultimately decided to recommend this project because they wanted to support innovative ideas. I went along with staff recommendation, also wanting to support innovative ideas.
These were not the words and actions of a staff intent on punishing a whistle blower. In fact, if anything staff was being overly supportive of David Thompson and Luke Watkins.
[quote]You are busy. You do not have to know the details. You have to know the direction that you want to give staff. This does not take much time and much reading of reports.– [b]Ann Evans[/b][/quote]To quote you, Ann: “Really?” Council should not bother ourselves with the details? We shouldn’t spend much time reading reports? Why not, Ann?
[quote]What I was trying to say was that the city should never take on any project for which it is unable or unwilling to provide adequate oversight.–[b]JustSaying[/b][/quote]If “adequate oversight” means policing the board of cooperative and policing their consultants, then you are saying that the city should not approve co-ops, because the city does not have the time or money to do that. If the city had to police co-ops, the cost of this level of city oversight would have to be factored into the cost of co-ops to the affordable housing program, and co-ops would become an expensive and very inefficient way to provide affordable housing. This would be unfortunate.
Mr. Rifkin:
Hello again. I have offered to go over the City housing program with you on the Enterprise site and I now make that offer to go over it on the Vanguard. I can be reached at 757-2233. You are not in the phone book so I do not know how to reach you to make the offer personaly.
You now make other assertions without the courtesy of having sat down.
Luke and I can go over a number of the affordable housing projects in Davis. We will show you that on per unit basis NP needed far less City dollars in subisdy than all the other organizations. We will show you that we took a far smaller fee than all the others. If we are an
“avaricious company” then I am interested in how you will describe the others we will show you.
We got just over $6,000 for doing the 20 DACHA homes. three years later CHOC was approved for over $30,000 per home.
Don’t mind having a dialog by making the comparisons. I know you are concerned about waste. We all should be. But let’s be equal in the targets.
CHOC lost over $600,000 on the land trust project which the City had to pay for about a year ago. No outcry then about staff waste.
Call me, lets set a time to talk and go over these projects in a rational manner.
I went to your column and liked it a lot. The parent organization of Twin Pines is Associated Cooperatives of which I am an officer. In 1942, Associated Cooperatives set up cooperatives in all (except one)of the Relocation Camps to meet the needs of the 110,000 internees. We employed many Japanese Americans in our cooperatives after the war. I have written extensively about the role of co-ops in the camps. Thanks for pointing out the role of Mr. Madson I now look differently on the street sign.
http://www.thenews.coop/article/co-operatives-and-victims-internment
AC is for the moment humblu HQ’d in Davis.
David Thompson, President, Twin Pines Cooperative Foundation
[quote]We got just over $6,000 for doing the 20 DACHA homes. three years later CHOC was approved for over $30,000 per home.–[b]David Thompson[/b][/quote]But you also sued DACHA for $500,000 for consulting fees and for development fees for future houses that the city had not even agreed to supply, some of which hadn’t even been built (I believe that David and Luke collected other consulting fees as well. I am under the impression that David and Luke were acting and had been paid in both consultant and developer roles, which Luke explicitly said that they would not do in the July 19, 2002 letter answering to staff questions. I can’t avoid asking myself the question: “Is it kosher to act in an advising role to the Board when the Board is signing contracts binding future boards to expand the co-op and to pay those acting in the advising role fees in their developer role?” If this did not happen, please explain. How were these roles kept separate?)
[i]”[u]Is it kosher[/u] to act in an advising role to the Board when the Board is signing contracts binding future boards to expand the co-op and to pay those acting in the advising role fees in their developer role?”[/i]
It is traif ([url]http://dictionary.reference.com/browse/tref[/url])* in every Torah and every Talmud my ancestors penned.
[img]http://www.mspkosher.org/wp-content/uploads/2010/06/msp-not-kosher.png[/img]
*Traif is sometimes spelled trayf or tref. It is pronounced to rhyme with safe.
Speaking of kosher, I loved this Jewish Daily Forward story ([url]http://blogs.forward.com/the-jew-and-the-carrot/145383/[/url]) about two Muslim taxi cab drivers in New York who own and operate a Jewish bagel and bialy store under kosher laws. Only in America!
Rich: you really should take the time to sit down with David and Luke, review documents, and let them show you some of the housing.
I was on the CC 2000-04, and David and Luke definitely blew the whistle on affordable housing errors by City staff, and some CC members, and staff, went out of their way to try and just down business going to NP.
One time, Ruth and I caught senior housing staff trying to give away $5 million in city money in a Davis project to a competitor of NP’s. I dont know if it was an oversight, or deliberate, but the give-away was blatant. On the detailed pro-forma fiscal sheet (income and expenses and loan repayments) for a competing project, staff has a column for $5 million city loan, and THERE WAS NO REPAYMENT SPECIFIED. Staff came very close to getting it approved.
When Ruth and I pointed it out to Bill Emlen and the staff member, the repayment was put into the pro forma, and even though that staff member should have been fired on the spot, nothing was done to her, and she went on for years favoring the other affordable housing operation that was competing with NP, and she was also part of the staff that botched the DACHA handling, including allowing the DACHA board to do all of the things that NP asserts broke the law.
Sue, on this topic, very respectuflly I do not agree with your summary above or recollections of events, at least not through April 2004.
Also, would someone explain to me why is the CIty Attorney still working this file, when it fact she is litigating her own advice and documentation and is clearly conflicted under California Bar ethics rules??
This matter bears similarities to the water project fiasco, and the smaller but indicative Zip Car rental contract in Davis: staff botch their paperwork, and the CC sits up there and suffers through a disaster, and the CC and City Manager do not discipline anyone.
There is no accountability.
I think that NP should file a motion in Yolo County to conflict her out. (However, so far, the City has lost at nearly every turn, so maybe NP and Twin Pines have made a strategic decision to leave her in control of the City’s defense due to her losing record to date?)
Also, whatever happens, I hope that NP and Twin Pines take depositions and assemble the package and give it to the public and the Grand Jury.
The City simply has to be accountable for nearly destroying NP and Twin Pines in this city, and for casting shadows on what I think is a very good affordable housing model, as is demonstrated by numerous other successful projects around town done by NP.
[b]@Mike Harrington[/b]: I did tell staff that I thought that the business model wouldn’t work because there was inadequate financial advantage to low and moderate income clients given the carrying costs and the membership share cost and the fact that the project was based on an expansion model with future equity going into expansion rather than paying off the loans. Staff did agree that my concerns had merit, but told me that they were going to recommend approval anyway since they wanted to encourage innovative ideas.
That is what I experienced, Mike. I experienced staff actually supporting David and Luke in the face of my concerns.
[quote]The City simply has to be accountable for nearly destroying NP and Twin Pines in this city, and for casting shadows on what I think is a very good affordable housing model, as is demonstrated by numerous other successful projects around town done by NP. — [b]Michael Harrington[/b][/quote]I don’t understand how you figure that we can deduce that DACHA was a “good affordable housing project” based on “numerous other successful projects around town done by NP”.
First, DACHA was its own model and an unusual one at that. It has nothing to do with the other projects.
Secondly, NP had two other projects that went under. Pacifico, another co-op, went under and Homestead went under and had to be given to another agency. These failures might have occurred after you left council.
There is discussion about how much time City staff should spend monitoring loans/grants made to organizations.
City Staff took an extensive and interest in both major and very minor details relating to the board of Rancho Yolo Community Association (RYCA). RYCA represents 330 seniors. Interview any of those RYCA seniors on the board about how harsh City staff were on them.
Here is a memo I wrote in 2008 documenting just a few of the City staff demands.
December 28, 2008
Elvia Ayala-Garcia (staff member) demanded that Barbara Ridgeway not be on the Elections Committee. (Barbara Ridgeway will confirm)
Under Roberts’ Rules of Order (an accepted guide to parliamentary procedure) a member of the existing board of directors of an organization is entitled to serve on the Elections Committee. The one requirement is that at the time that that person’s nomination is discussed by the committee they shall not be in the room.
Elvia’s (Staff member) request went far beyond what is required and constituted an inappropriate and unreasonable demand.
Danielle Foster (City staff member) made a threat to Brian Johnson, Chair of Rancho Yolo. The memo Brian wrote is attached. He eventually did not send it as he feels intimidated by staff.
City Staff confirmed that documents would be maintained in confidence by the city. At the point at which NP would be sharing those documents staff did an about face and said they did not know that they could maintain those documents in confidence.
City Staff spends a great deal of time demanding that the RYCA board meet a number of exacting requirements. For example that, RYCA posts notice of board meetings a certain number of days before the meetings and that we post a comprehensive agenda prior to the meeting.
However, I purposefully visited the Twin Pines Community of Yolo Mutual Housing Association and the Windermere project of CHOC. At neither of those locations of both organizations is there any evidence at all of the posting of board agendas, board meeting times or any communication by the organization’s board to the members or residents on site. Why is RYCA being pursued so relentlessly when the two largest nonprofits in town are clearly not providing any corporate material at all to their resident/members?
Danielle Foster (City Staff) sent a letter to Brian Johnson that set out in a public document a number of accusations that were untrue. The accusations had been made to Danielle by an anonymous source.
City staff members went through the RYCA minutes and asked for them to be changed and for certain things to be removed.
If City staff went into such detail at RYCA why did they neglect the same level of detail relating to the conduct of the DACHA board which actually were breaking their bylaws and state law while the staff watched?
The difference in City staff conduct is measurable and should be investigated.
David Thompson, Neighborhood Partners.
Sue: I dont remember a single complaint about the DACHA model until much later, after I was off the CC in April 2004. The DACHA model was set up after David blew the whistle on numerous errors by staff, and the City Attorney, that cost the City many millions of dollars. I can remember Wildhorse and the Marquee Homes in South Davis, but I think there were other debacles, too, for the City’s affordable housing project.
Anyway, NP should take the depos, get all the documents and emails, and file everything with Yolo County Superior Court in a Motion for Summary Judgment that will lay it all out for the public.
Also, it is a tactical question: bounce the City Attorney off the case, or not?
Sue: I still have files on the Eoff litigation, where the City Attorney wrote the land development contract, and then litigated it, and lost big time. The City paid about $2.2 million that it should not have, and you probably know all the reasons I am talking about.
[quote]If City staff went into such detail at RYCA why did they neglect the same level of detail relating to the conduct of the DACHA board which actually were breaking their bylaws and state law while the staff watched?
The difference in City staff conduct is measurable and should be investigated.– [b]David Thompson[/b] [/quote]Staff should be investigated for carefully overseeing RYCA? “Really?”.
I can only speculate, but perhaps the difference between staff treatment of RYCA and DACHA was due to the criticisms that staff received for its handling of DACHA, most of it from you? Aren’t you the one who said that staff has the responsibility to carefully oversee boards when city funds are involved?
In your eyes, nothing staff does seems to be acceptable.
[quote]Sue: I dont remember a single complaint about the DACHA model until much later, after I was off the CC in April 2004.– Michael Harrington[/quote]Then you either forgot or weren’t listening, because I brought up these concerns in front of the entire council.
Is this anyway to run a railroad?
The loss alone from vacant DACHA units is over $400,000 and increasing by about $20,000 each month. In 2011 there were ten empty DACHA homes that cost Davis taxpayers $240,000 in lost income.
The first DACHA home became vacant on September 1, 2009. Can you imagine that City staff has allowed a perfectly good home in Davis to sit vacant almost two and a half years. A house empty for two and half years racks up all sorts of remedial costs. Years ago, NP suggested that the vacant homes be leased to qualified people with year long leases. Eligible families could be in those ten empty houses.
Its mismanagement of the highest order for City staff to sit idly by.
That $400,000 could have gone into the settlement. We asked the Court to be able to manage the DACHA assets. City staff gave DACHA $50,000 to fight our efforts. What public purpose did that serve?
Would anyone who owned a home be this neglectful?
Is there anyone in town who would tolerate a vacancy rate of 50% for this long?
Whether you like NP, TPCF or not surely you want the City’s assets to be well managed?
None of the lawsuits get in the way of these homes being leased out. So there is no excuse. But by Election Day in June the empty houses will have cost Davis citizens over $500,000.
Sue. Perhaps you could confirm if the number is more than ten empty homes.
That would be appreciated.
David Thompson, Neighborhood Partners, LLC.
Sue: I respectfully disagree with you. But you can, and should, fix the current situation where your City Attorney is litigating a case that she helped create. The City is clearly going to lose, from what I have read to date. You thought the City was going to win those demurrers, and of course, what your attorney told you turned out not to be true, right?
I hope Twin Pines and NP don’t settle with the City, and take this one all the way. If I had the City of Davis trashing my business and professional reputation like they are doing to David and Luke, I would take it the distance for vindication.
If it settled, one item I would require would be an apology from the City.
They will probably win attorneys fees in the end, you realize?
David: those houses are at risk of vandalism and burning down. Do they have insurance? Anyone checked?
My real estate policies self-cancel if the property is vacant for more than 30-45 days.
Is staff minding this serious issue at all?
[quote]They will probably win attorneys fees in the end, you realize? — [b]Mike Harrington[/b][/quote]I don’t agree with your assessment.
[quote]Is this anyway to run a railroad? The loss alone from vacant DACHA units is over $400,000 and increasing by about $20,000 each month. In 2011 there were ten empty DACHA homes that cost Davis taxpayers $240,000 in lost income. — [b]David Thompson [/b][/quote]The DACHA disaster is not “costing the taxpayer”, because these funds are part of the mandatory affordable housing set aside that has already been obligated. However, it is loss to the affordable housing fund which we take very seriously. That is why we are selling the houses — in order to reimburse the affordable housing fund to spend on affordable housing.
The entire DACHA affair has been no way to “run a railroad”, IMHO, and that is why the item is on the agenda next week.
In 2008 the City staff were in the middle of attending 18 illegal meetings of DACHA which was pointed out by us.
In 2008, the DACHA board (no legal quorum due to members who were required by the bylaws to be removed from the board)and membership who could not achieve a legal quorum because only a few were eligible to vote.
So in the same year (2008) about one mile apart the same two City staff members (Ayala-Garcia and Foster)have full tolerance for wrongdoing, the breaking of their bylaws and the law breaking of DACHA while nit picking and intimidating of the seniors at Rancho Yolo. (Who were not breaking their contacts, bylaws or state law)
The breaking of bylaws and state law by any City borrower/grantee should never have been allowed. City staff should have acted.
The right thing was to do the same at both.
The wrong things was for the City staff to ignore upholding state law at DACHA. Why are they not accountable?
Is this overt discrimination OK?
Or is the pattern possibly that if the client likes NP then City staff make it difficult for them and if the client does not like NP then City staff spends or wastes over $2 million of public funds on them?
Seniors at Rancho Yolo will testify that to be the case.
David Thompson, Nieghborhood Partners LLC.
Dear Sue:
You have never critiqued the mistakes at Wildhorse admitted in a memo to the Council from Harriet Steiner. The City losing a share in $11 million does not seem to be a problem because as Ms. Steiner described the lack of placing a note on 52 homes as sorry “forgotten”.
When staff did their review of the Wildhorse homes did they tell you:
That six of the homes had been sold in violation of the covenants and before the two year restrictions
That six households had illegally made $900,000 and at that time the City Attorney could pursue them for the entire $900,000 of illegal gain but apparently did not
Did you instruct the City Attorney not to pursue people who had broken the law?
Were you told that a City staff member who had worked on the Wildhorse project got one of the homes?
Was that not a conflict of interest? Why was that insider dealing ignored?
The only person on the Council who worked to end the Wildhorse windfall was Michael Harrington for whom as a result, I have a great deal of respect for his concern about the misuse of public funds.
There is a high price for whistle blowing?
David Thompson, Neighborhood Partners, LLC.
December 24, 2009 (This letter was never answered)
Mayor Ruth Asmundson
City of Davis
23 Russell Blvd
Davis, CA 95616
Dear Mayor Asmundson and Members of Council:
I have had reasons recently to take another look at what happened with the 52 “for sale affordable” homes in Wildhorse. In light of the workshop the Council will hold on January 5, the information I have obtained from the title company records is telling as to the number of transgressions that have occurred.
Breakdown of the 52 “for sale affordable” homes.
A.One was sold to a staff member
B.Is the person at that home the same person who is a city employee?
Were the circumstances under which she obtained that home appropriate?
Was there a conflict of interest present in this transaction?
If there is what action will the city take?
B. I am attaching the list of the original buyers of the 52 homes.
Could you have city staff compare these names to staff members, spouse, family and significant others to see if any other household having a relationship to city staff obtained one of these homes?
Does city staff have knowledge of any staff member who is related to any of the 52 households?
What process was used to assign the 52 homes?
Was there a lottery?
Was there an income requirement?
Was there a first time home buyer requirement?
Were community equity seconds placed on the homes as was required by city policy?
If so, why not?
$7,423,500 has been gained by the owners of the 34 “for sale affordable homes” that have already been sold.
Why was this over $7 million in gain not recaptured by the city as was the intent of the community equity second policy?
Over $10 million will be gained over time when all the homes are sold.
C. 6 of the homes were sold prior to the two year requirement set in the grant deed.
The seven owners appeared to have therefore obtained gained a windfall illegally as this was not allowed under the grant deed (see below for grant deed wording for the Wildhorse homes).
Did all six homes escape detection?
If so, how did they escape detection?
Who should have detected and stopped this illegal transaction and windfall?
Which staff members were involved in the Wildhorse “for sale affordable” home program?
Given the Deed Restriction (see below) what action could the city have taken to stop the windfall?
Was any action taken against any of the households for their wrongful sale of the home and the windfall they gained?
In August of 2002 it is clear that City staff looked at the 52 DACHA homes. It is very simple to use a Title Company to gather information. I relied upon the staff to do their job. So why did City staff not report that the title reoports showed that six of the homes had already been sold in brech of the conveants and restrictions. Had the recording been done so badly by City staff that they were not even notified that six sellers were selling before the two year requirement? Surely, they must have know that one person in the same unit had bought one of the widfall homes? Why was that not reported as a potential conflict of interest?
This project has nothing to do with NP or TPCF so hopefully, some of you out there will raise questions about how this happenned just from the point of upholding City policy and with a concern about a right to share in 11 million dollars being lost to the City due to being “forgotten” by the City Attorney.
To Mayor Asmundson: part 2.
Today’s Vanguard carried excerpts of the Enterprise story of August 7, 2002.
Katherine Hess, planning and redevelopment administrator, reported to the council at its Aug. 1 meeting that the two-year occupancy requirement was the only restriction on the homes, so the owners were not violating any city policies. Cochran said today, though, that one of the home owners is moving out before the two-year mark, but that it is a legitimate exemption issued by the city.
What in retrospect is so interesting is that by August 7 2002, five of the six homes had already been sold prior to the two year requirement and a sixth was in escrow to be sold before the two year requirement. It looks like City staff checked the title records but if they had why did they not report that the illegal sale of six of the homes. The sellers gained $954,500 in unauthorized value against city policy and the grant deed. Why was no action taken by city staff against this breach of city policy?
In recounting the problems with the 52 “for sale affordable” the staff did a report to Council. This would have been a good time for the city staff to have reported the circumstances under which a city employee had received one of the homes. Regretfully, the issue of conflict of interest or apparent conflict of interest was not raised.
However, the comments by city staff, do lead one astray. Sale of the six homes sold did violate city policy!
I provided part of the information that Michael Harrington and the Enterprise made public and thank them for exposing the Wildhorse scandal.
See Grant Deed wording for the Wildhorse homes below.
I think it would be valuable to have the answers to these questions made available for the Council Workshop.
Thanking you for your time,
David Thompson
Neighborhood Partners, LLC.
516 Rutgers Drive
Davis, CA 95616
530-757-2233
CC: Bill Emlen, City Manager
Att: XL spreadsheet on affordable homes at Wildhorse.
@[b]David Thompson[/b]: As I have, to the best of my knowledge, everyone on the council felt strongly that affordable for-sale housing should have equity caps. The Wildhorse affordable housing program was set up long before I was on the council.
I fail to see what this has to do with the issues around DACHA. It seems like a diversion to me.
What a classic example of crony capitalism.
The city council let us down by supporting projects which they didn’t and don’t understand. They wasted our taxpayer funds because they wanted to feel good about supporting “low cost housing”. And buy themselves some votes with other people’s money. So they fell into the hands of those pretending to be do gooders who prosper from their connections to government functionaries.
The lesson I take away is that if we had smaller and less intrusive government we would have fewer scams. Big government and corruption are inextricably intertwined and always will be. Good government and big government are not compatible and never have been.
Dear Sue: You were on the Council starting 2004 and the Wildhorse was coming up all the time. This memo from Harriet was in 2002 or 3.
Wildhorse was followed by the Marden Mess finally cleared up by NP with the help of Michael Harrington in 2004. A woman who got a Marden Home was the wife of a man who got a Wildhorse home. They said they lived separately. She never lived in the house.
Then during your time on Council there were the 60 Southfield Park limited equity condos supposed to be owner occupied but I learned that over 25% were rentals. All of this going on right under the eyes of City staff whose job it I worked with Antonen to get the sytem cleaned up. as to monitor sales. I never heard you say a word about this problem.
David Thompson, Neighborhood Partners, LLC.
Is this how the City lost a share in 11 million dollars?
Part 1.
TO:Davis City Council
FROM:Harriet Steiner
RE:For Sale Affordable Housing – Community Equity Mortgages
DATE: October 20, 2002 (3)?
Last July the City Council requested that we look into the community equity mortgage deeds of trust for the for sale units to see if the city staff and my office had implemented the For Sale affordable program per Council direction. At this time, the Council was reviewing the Wildhorse for sale affordable units.
I have reviewed city files and files in my office. It has been difficult to follow exactly what happened with the community equity mortgage portion of the for sale program. Some of the actions and directions are clear; others lack any type of paper trail. To some extent, I am able to run down Council direction and staff’s and my office’s actions. To some extent, definitive answers are difficult because we have been unable to determine why certain actions were not implemented.
As Council is aware, the For Sale affordable housing program has gone through numerous changes and modifications. In fact, almost every for sale affordable project has different requirements and different restrictions. In large part, in my opinion, this is because we have never been able to develop a program that meets all of the policy concerns and objectives of the City while still allowing for conventional mortgages on the homes. In addition, the market conditions have directly affected this program. For example, in the early and mid 1990’s, affordable for sale owners complained that they had lost their equity in their units. In one case, the City and the Redevelopment Agency refinanced a self help unit to so that the owner would not lose equity, since the appraised value of the property was lower than the purchase price. Today, the values are significantly in excess of the sales price, raising different issues.
The 1987 Housing Element provided for the affordable housing program that is embodied in the Affordable Housing Ordinance. In addition to the inclusionary housing requirements, Implementing Policy F provided:
“Require resale and rent controls to permanently maintain the affordability of units by the income groups to which the units were affordable when approved, and to restrict sales or renting to very-low, low- or moderate-income households, whichever the units were approved for. Buyer and tenant screening and qualifying shall be done in a manner approved by the City. “
The 1987 Housing Element also contains a series of other goals and implementing policies designed to provide affordable units and to obtain financing for these units. As implemented by the City, the affordable rental units and the units built on land dedication sites are permanently affordable. Permanent affordability has not been required for the For Sale and Self Help portions of the affordable housing program.
Part 2 of Steiner’s letter
The Affordable Housing Ordinance was adopted to implement these General Plan policies. The Ordinance was developed with the assistance of a housing task force. The Ordinance provides for a community equity mortgage to assist in financing for sale units. The community equity mortgage is a junior lien on the property made up of a developer contribution consisting of the difference between the city approved sales price and the gross proceeds from the sale to the developer; a developer temporary interest rate buydown and the development impact fees paid for or deferred by the city. The Affordable Housing Ordinance provides that “if a community equity mortgage is utilized for a unit, no resale controls shall be imposed on that unit”(City Code § 18.05.020) Owner occupancy is required.
In May 1995, the City Council considered recommendations on the community equity mortgage. Two staff memos, copies of which are attached, made numerous recommendations to implement task force recommendations on the community equity mortgage. The Council considered two options: (1) an equity sharing note; and (2) a subsidy recapture note. Based on the minutes of the City Council meeting, the council directed staff and the city attorney to implement a “recapture system” in which the first loan would be the developer contribution and the development impact fees and the second loan would be the initial subsidy amount. The initial subsidy would be the difference between the affordable sales price and the initial market value of the unit. The second note would be at no interest. In addition, the Council direction called for an amendment to the owner occupancy requirements to require that buyers occupy the homes for as long as they own the home.
The owner occupancy requirements have been implemented. With respect to the recapture note, we can find no record in either the City files or in our files that this note was drafted or implemented. Our files do show an Home/BEGIN promissory note and a shared appreciation note. It is my understanding that the Home/BEGIN note was used for the self help portion of Mace Ranch affordable units. I believe that the shared appreciation note was used for Evergreen.
In addition, since 1995, the Council has taken action and staff has implemented a requirement that all community equity mortgages are due on sale or lease of the property (1996) and that owner occupancy requirements would remain on the property and could not be waived by payment of a fee.
Finally, as Council is aware, considerable time and energy was spent during the mid and late 1990’s on the General Plan update and the housing issues associated with that update. It is possible that the “recapture note” was put on hold or, more likely, was delayed and then forgotten, because of the General Plan Update and Affordable Housing General Plan committee and, later, task force. However, as stated above, neither city files nor my files show any action on this matter after the Council action in 1995.
Dear Sue: You said the following which is very untrue, please keep to the facts:
“Secondly, NP had two other projects that went under. Pacifico, another co-op, went under and Homestead went under and had to be given to another agency.”
NP did not do Homestead and I played no role at all. The development part of the project that Luke assisted was successful.
NP did develop Pacifico. City staff cost us about one million dollars wehe we were required to move from the NW part of the site to the SE part. The re-engineering of the new site was costly due to the limits now placed by setbacks, and Putah Creek requirements, etc. However, we worked through all of those. Unlike all the other nonprofit housing, City staff decided to require that the loan from the City to Pacifico required I think a 6% interest rate. The highest charged ever to any nonprofit in Davis. However, Pacifico was developed successfully and turned over to the Co-op in good shape. In addition, NP obtained an excellent management company for Pacifico and Luke acted as a part time Executive Director to them. While this happened, Pacifico was financially stable with a manageable vacancy rate. Later, the students wanted to have NASCO manage Pacifico and Luke and the management company were replaced by NASCO.
Pacificodidnot go under while it was an NP project nor while Luke played a role. So neither of your statments are correct and are harmful to our business. Please state correct facts when desribing NP’s work.
David Thompson, Neighborhood Partners, LLC.
[quote]”The DACHA disaster is not “costing the taxpayer”, because these funds are part of the mandatory affordable housing set aside that has already been obligated. However, it is loss to the affordable housing fund which we take very seriously. That is why we are selling the houses — in order to reimburse the affordable housing fund to spend on affordable housing.”[/quote]It sounds as though the houses are valued at more that we’ve invested in the DACHA project. Is that what you’re saying, Sue? (It [u]already[/u] has “cost the taxpayer” whatever has been spent so far–whether the taxes have been labeled “mandatory affordable housing set aside” or not, correct?)
Will the city be reimbursed for the staff time and legal and other costs associated with taking over DACHA? Or, are those costs already being paid from the “mandatory…set aside” funds?
Guess I hadn’t read that the city has decided to sell the DACHA houses. What’s the process? Are all being sold and will they be open market sales?
Is there no choice on use of the proceeds (“in order to reimburse the affordable housing fund”)? What if we “make a profit” on the DACHA inventory? Or, if we “take a loss”?
Watching this back and forth doesn’t give one any confidence that the city ever will be able to effectively manage a successful affordable housing program. Too bad it appears we can’t use the failed-project proceeds to undertake some municipal projects for which we have a better track record.
[b]@David Thompson[/b]:I will look into the exact legal description of the acknowledged involvement of yourself and Luke Watkins in the failed Homestead and Pacifico projects, and report back with any necessary corrections.
I still fail to see how a description of the shortcomings of other affordable housing projects suffice as answers to questions about your affordable housing project.
[quote]”The DACHA failings were symptomatic of our municipal ambitions outracing our capabilities.”
“I disagree….It is disingenuous, in my view, to blame the actions of the city staff, when this thing went in the direction it did because the two men in question had undue political influence at the start.”[/quote]Disingenuous in what way? Actually, I didn’t blame the city staff. I blamed the city council for approving a project without assuring adequate safeguards and city oversight. (Sue is the one who noted that we don’t have staff to manage the project because we don’t have adequate funds to cover such costs.)
Even if the city approved a “fatally flawed model,” it seems that [u]someone[/u] in our city establishment at [u]some[/u] point in these many DACHA years should have noticed that the project was in trouble and resolved the issues long before foreclosure was judged the only option left.
And, it’s not just DACHA. We’ve had a string of “affordable housing” efforts that have not panned out as promised by the council and staff leadership.
But, back to your contention that the death of DACHA resulted from an avaricious company using undue political influence over inept elected leaders to run a scam on poor people (as opposed to my thought that it was our ambitions vs. our capabilities). I think both could be true, but I’m concerned about how you’re presenting this.
As long as I’ve followed you and the [u]Vanguard[/u] discussions, I’ve found that you provide more support, data and sources for your opinions than anyone else here even attempts to do. This tendency is apparent even when don’t have a position to advance, when you’re just contributing to the overall quality of information in the discussion. It seems much different on this topic, at least in the past couple reports.
I get the feeling that I must have missed some well-documented case for how you arrived at what seems like an extreme view. Please let me know whether you’ve already published your rationale’ so I can catch up if you have. Thank you.
P.S.–Will you and David T. be getting together? I don’t think we’re making much progress with the unchecked charges flying around here. If David T. trusts you to evaluate his “side’s” info. in spite of your declared views, I think we’d all benefit.
[quote]Even if the city approved a “fatally flawed model,” it seems that someone in our city establishment at some point in these many DACHA years should have noticed that the project was in trouble and resolved the issues long before foreclosure was judged the only option left.– [b]JustSaying[/b][/quote]Yes, we noticed that there were major problem in 2005, around two or three years after the co-op was founded. We responded by hiring an independent auditor, who agreed that there were many problems, possibly including the business model itself. We followed his broad recommendations, and provided aid in the form of lowering the large share costs. At that point, David Thompson and Luke Watkins sued DACHA for over $500,000 in development fees they felt were owed to them by DACHA for houses which DACHA never added — including houses that the city had not agreed to provide and houses that were not yet built.
DACHA could not pay the judgement.
Sue
Is the independent auditor’s report public record?
Perhaps David T could address the report’s points and you or someone else (?Elaine) could address the findings in the NP suit and Grand Jury report. It appears these are the closest to objective findings we have and short of a city funded investigation (which I still promote), and it might get us away from charges back and forth and farther down the road.
“We responded by hiring an independent auditor, who agreed that there were many problems, possibly including the business model itself. We followed his broad recommendations, and provided aid in the form of lowering the large share costs.”
So, how did that work out for us? Don’t you think in hindsight that the city could have done more–or better–to keep DACHA viable?
You imply that DACHA failed because the two sued the coop, but the arbitration judge found in their favor, right? Didn’t the organization ultimately fail because the city foreclosed on it? Who knows whether DACHA eventually would have paid off the judgement or that the two parties would have resolved their issues? The city’s action certainly assured that it couldn’t.
Hope you’ll take time to clarify the plans to sell DACHA’s assets and how the money then will be used. Thank you.
ERM (21 September 2011) shows the difference between the words and actions of the ‘other side’:
[i]The reason for dissolving DACHA IMMEDIATELY is crucial – DACHA must be represented by an attorney, but no attorney will take this case for various reasons.As a result, [b]DACHA’s judgment creditors can go into court, say anything they want, and obtain two default judgments, and DACHA will not be permitted to even speak/defend itself[/b]. Then another round of subpoenas to debtor’s exams will probably be issued against DACHA homeowners. They could be dragged in again and again and subjected to more inappropriate questions that go far beyond what is permitted in a debtor’s exam, questions designed to obtain incriminating statements, as has already happened no less than 27 times. [b]In one case, a minor child was served a subpoena.[/b] Many of these homeowners speak English as a second language, are not represented by an attorney, and are hardly in a position to understand legal language or how to answer a cleverly formulated question designed to elicit an incriminating answer. [/i]
Reminds me of the old joke about the difference between a hooker and a lawyer: a lawyer can screw you *after* you’re dead.
[Disclaimer: the above joke was not intended to represent, characterize, infer behavior of, nor allege, nor implicitly or explicitly infer, nor assign attributes to, anyone or anything at all related to the particular allegations made or inferred by the author of the original commentary above, nor any further comments, asides, snide remarks and/or sarcasms made at any time, place, and/or time *and* place existent on this planet at any time since the original Ice Age, and extending into the future until such time as any and all those commenting, alleging, inferring, or otherwise engaging in the debate over this particular and unique commentary have expired.]
Don: If you’re doing your job today, please delete the above comment. Thanks.
[quote]”DACHA’s judgment creditors can go into court, say anything they want, and obtain two default judgments, and DACHA will not be permitted to even speak/defend itself.”[/quote]You’re wrong here, Neutral, creditors don’t get default judgments by saying anything they want against a defendant is not permitted to speak or defend itself. Default judgments usually are awarded to a plaintiff when a defendant doesn’t respond to a summons or fails to appear.
A default judgment isn’t something that plaintiffs do [u]to[/u] defendants; it’s something that plaintiffs bring upon themselves.
With respect to a “minor child (being) served a subpoena,” so what? What’s the reason?
JS: [i]You’re wrong here, Neutral[/i]
‘K.
[quote]So, how did that work out for us? Don’t you think in hindsight that the city could have done more–or better–to keep DACHA viable?–[b]JustSaying[/b][/quote]We had already poured a lot of money into DACHA to keep it viable. At a certain point, we were jeopardizing the rest of our affordable housing programs.
[quote]You imply that DACHA failed because the two sued the coop, but the arbitration judge found in their favor, right? Didn’t the organization ultimately fail because the city foreclosed on it? Who knows whether DACHA eventually would have paid off the judgement or that the two parties would have resolved their issues? The city’s action certainly assured that it couldn’t.–[b]JustSaying[/b][/quote]It wasn’t a judge that found in their favor; it was a private practice arbitrator. DACHA was unlikely to be able to pay off the judgement because members were allowed to leave with short notice, and vacancies were increasing. Carrying charges would have to rise in order to pay off the judgement. Why would anyone pay money to join this organization with liabilities like that hanging over its head?
[quote]”It wasn’t a judge that found in their favor; it was a private practice arbitrator.”[/quote]Sorry, I stand corrected. Does it make a difference from your viewpoint? My point, of course, the arbitration process found in favor of the developer and determined that DACHA owed the money. So, why suggest their claim was somehow a bad thing for them to do?[quote]”DACHA was unlikely to be able to pay off the judgement because members were allowed to leave with short notice, and vacancies were increasing.”[/quote]Unlikely to pay off? Perhaps. Unlikely to re-negotiate if they could not pay? Maybe. We can speculate all we want now, but the city’s foreclosure foreclosed those possibilities and took over ownership from the DACHA families.[quote]”We had already poured a lot of money into DACHA to keep it viable.”[/quote]Did the council ask the city attorney to look into the city helping negotiate and/or helping finance a settlement between DACHA and NP? Obviously, the city spending “to keep it viable” didn’t do the job (and, I guess, is involved in yet another suit). But, maybe helping resolve the settlement problems might have been worth our time and money.
What’s the plan for selling off DACHA assets? Is there a staff report? Has the council approved a plan?
[quote]You’re wrong here, Neutral, creditors don’t get default judgments by saying anything they want against a defendant is not permitted to speak or defend itself. Default judgments usually are awarded to a plaintiff when a defendant doesn’t respond to a summons or fails to appear…[/quote]
In this case you are INCORRECT. [i]Corporations[/i] must be represented in court by an attorney. DACHA is a non-profit public benefit [i]corporation[/i]. To defend itself, DACHA must be able to either hire an attorney or find a pro bono attorney to defend it. DACHA has no funds with which to hire an attorney; and all efforts to find a pro bono attorney to take the case have failed ( bc either the attorney is conflicted out; unwilling to take the case bc of its extreme complexity; or unwilling to take the case bc of its connection to David Thompson). Because DACHA has no means to defend itself, NP/TP can go into court and say whatever it wants, presenting a one-sided view. DACHA has absolutely no means of legal process to speak on its own behalf without formal legal representation. So it is entirely possible that an unjust default judgment could be entered against DACHA as the result, based on only half the story.
[quote]Sorry, I stand corrected. Does it make a difference from your viewpoint? My point, of course, the arbitration process found in favor of the developer and determined that DACHA owed the money. So, why suggest their claim was somehow a bad thing for them to do?[/quote]
It is very important to make sure that a suitable arbitrator is chosen for a particular situation, an arbitrator that understands the full complexities surrounding a case, has no biases one way or the other in that particular area of the law, and is not hand-picked by one side…
[quote]Did the council ask the city attorney to look into the city helping negotiate and/or helping finance a settlement between DACHA and NP? Obviously, the city spending “to keep it viable” didn’t do the job (and, I guess, is involved in yet another suit). But, maybe helping resolve the settlement problems might have been worth our time and money. [/quote]
I have said this before, but I will say it again. If one side is not reasonable in its demands, then the other side would be foolish to settle on such outrageous terms. As you noted yourself, if the demand was for the return of the DACHA houses, it would not be in the city’s best interests to agree to any such preposterous thing…
[quote]With respect to a “minor child (being) served a subpoena,” so what? What’s the reason?[/quote]
Once the mistake was realized, that should have been the end of it, no?
[quote]I was new to the council when David and Luke’s DACHA proposal came forward. I had concerns that the business model wouldn’t work. The reason was simple. Carrying charges were fairly high relative to market rents (I didn’t realize exactly how high at that point) and a large buy-in price was required (I didn’t realize how large at the time). Members did not get a chance to share in the equity; they only received something close to bank interest on their membership shares.
So I asked Luke Watkins specifically whether the carrying costs would go toward paying off the mortages, so that the shares would maintain value based on the expectation of future lower rents. Luke answered “No, the equity is going to go toward expanding the co-op”.
I told Luke that I still had concerns, and he told me that I didn’t understand co-ops, that he was the professional and that I should trust him.
I was still concerned that this could be a fatal flaw, i.e., that might not be sufficient advantage to members over renting on the open market.
I expressed these concerns clearly to staff. Staff said that they shared my concerns, but ultimately decided to recommend this project because they wanted to support innovative ideas. I went along with staff recommendation, also wanting to support innovative ideas.
These were not the words and actions of a staff intent on punishing a whistle blower. In fact, if anything staff was being overly supportive of David Thompson and Luke Watkins. [/quote]
If your scenario is correct as to what happened, there were enough red flags raised here to clearly put the city on notice it had huge potential problems such that some supervision should have been required. If the city was unwilling to do the necessary supervision, then it never should have agreed to a plan with this magnitude of warning signs. And especially a plan aimed at a vulnerable population of consumers made up mostly of folks who spoke English as a second language, were disabled, and lower income (so could not easily withstand the financial hit if things went bad)…
[quote]If your scenario is correct as to what happened, there were enough red flags raised here to clearly put the city on notice it had huge potential problems such that some supervision should have been required.– [b]E. Roberts Musser[/b][/quote]I personally thought that the business model had problems, and I expressed my concerns to staff and to council. I also trusted David Thompson and Luke Watkins, and assumed that they would make the adjustments necessary in the business model to make the co-op work.
I certainly did not foresee that they would enter into contracts to legally lock the coop into a huge expansion with fees to due to themselves and then sue the program for the fees from the expansion that never took place– all after the co-op had started experiencing problems.
I had no way to predict that David Thompson and Luke Watkins would not make the adjustments necessary in the business model to make the co-op work.
[quote]”Because DACHA has no means to defend itself, NP/TP can go into court and say whatever it wants, presenting a one-sided view. DACHA has absolutely no means of legal process to speak on its own behalf without formal legal representation. So it is entirely possible that an unjust default judgment could be entered against DACHA as the result, based on only half the story.”[/quote]Thank you for correcting my impression. Are you stating that this is what happened? I find it incredible that the city would allow this to happen to DACHA. Hence, my question about whether you’re saying it’s conceivable–or that it’s a fact that it happened–that DACHA appeared but could not speak for lack of counsel?[quote]”With respect to a “minor child (being) served a subpoena,” so what? What’s the reason? Once the mistake was realized, that should have been the end of it, no?”[/quote]I don’t know. What happened?[quote]”Did the council ask the city attorney to look into the city helping negotiate and/or helping finance a settlement between DACHA and NP? Obviously, the city spending “to keep it viable” didn’t do the job (and, I guess, is involved in yet another suit). But, maybe helping resolve the settlement problems might have been worth our time and money.”
“I have said this before, but I will say it again. If one side is not reasonable in its demands, then the other side would be foolish to settle on such outrageous terms. As you noted yourself, if the demand was for the return of the DACHA houses, it would not be in the city’s best interests to agree to any such preposterous thing…”[/quote]I answered your hypothetical. If you would have asked me whether it would be in the city’s best interests to burn down city hall to satisfy NP, I also would have replied “no” and inquired whether you’re contending that this is what they demanded.
My question to Sue is a different one than you and I chatted about before. (Earlier, I had suggested the city work on settling with NP and DACHA [u]now[/u] to help itself and get the parties off of the lawsuit and name-calling track. You pleaded inability to be specific because you’re now counsel for DACHA, which I understand. However, that deflects the important questions about whether the city attempted negotiations and whether NP demanded anything unreasonable.)
I’m asking Sue now whether some negotiation approach was considered [u]before[/u] the city foreclosed on DACHA, thereby putting members out of their home ownerships.[quote]”If your scenario is correct as to what happened, there were enough red flags raised here to clearly put the city on notice it had huge potential problems such that some supervision should have been required. If the city was unwilling to do the necessary supervision, then it never should have agreed to a plan with this magnitude of warning signs. And especially a plan aimed at a vulnerable population of consumers….”[/quote]I am [u]so[/u] with you on this, Elaine. Sue notes that she raised the alarm years ago. Yet, now, for reasons that are beyond me, she claims it’s fine for the city to operate this way because we can’t afford the money to provide adequate management and oversight to assure that things don’t turn out this way on a multi-million-dollar city project. How can we afford not to with this much at stake?
Our only tactic now is blame everything on David T. It just doesn’t seem right to me.
[quote]”I also trusted David Thompson and Luke Watkins….I certainly did not foresee that they would enter into contracts….I had no way to predict that David Thompson and Luke Watkins would not make the adjustments necessary in the business model to make the co-op work.”[/quote]Ay, there’s the rub. We cannot be fortune-tellers. So one expects city government officials–this is not personal about you, by the way–to anticipate and guarantee against every possible contingency.
Due diligence in the case of managing large government projects is about having contracts and processes in place to deal with the unforeseeable, the untrustworthy, everything but the acts of God. It seems so basic, even for our small burg. That’s why I argue for spending money on qualified staff if we want to undertake such projects. [i]Crede sed proba.[/i]
[quote]Ay, there’s the rub. We cannot be fortune-tellers. So one expects city government officials–this is not personal about you, by the way–to anticipate and guarantee against every possible contingency.–[b]JustSaying[/b][/quote]As I said before, either we can try innovative projects and trust that the developers will make necessary adjustments, or we will have to stay with very conventional models. We cannot foresee all contingencies, and we cannot micromanage.
As Max Weber will tell you, trust is essential to successful capitalism.
[quote]I find it incredible that the city would allow this to happen to DACHA. Hence, my question about whether you’re saying it’s conceivable–or that it’s a fact that it happened–that DACHA appeared but could not speak for lack of counsel?–[b]JustSaying[/b][/quote]You just don’t understand the law here. We were not allowed to help DACHA, to provide them legal representation, etc. In fact, at any hint that something we had done might help give DACHA the funds pay for legal representation, David Thompson would claim that we were making a gift of legal funds.
[quote]”You just don’t understand the law here. We were not allowed to help DACHA, to provide them legal representation, etc. In fact, at any hint that something we had done might help give DACHA the funds pay for legal representation, David Thompson would claim that we were making a gift of legal funds.”[/quote]You’re correct that I don’t understand the law about this issue (default judgments against DACHA because they didn’t show up with counsel).
Although I get the feeling you’re avoiding my questions and comments and responding with statements about something else, it may just be I’m not clear enough. I’m sure the law doesn’t require the city to provide no advice or support to a failing city project.
If it’s true DACHA ignored suits against them because they couldn’t get an attorney, it’s just not credible that the city couldn’t scrape up enough concern to advise them not to take that route and to intercede on their behalf with attorneys (like Elaine) to take on their cases on contingency or pro bono.
Providing good advice costs the city nothing and apparently at least one city staff member attended board meetings over these many years.[quote]”…either we can try innovative projects and trust that the developers will make necessary adjustments, or we will have to stay with very conventional models. We cannot foresee all contingencies, and we cannot micromanage. As Max Weber will tell you, trust is essential to successful capitalism.”[/quote] I guess this is where we won’t ever come to agreement.
I’m saying: just don’t do it if we cannot keep another DACHA from happening using foresight, management and adequate legal protection for the city and the program participants. As I said, I’m not calling on you to “foresee all contingencies and..micromanage.” I’m looking to city officials to make better decisions in the first place and establish conditions that allow remedial action if necessary.
Trying “innovative projects” that don’t work out because we’ve engaged untrustworthy contractors helps no one. These are government projects, not experiments in capitalism. Better to “stay with very conventional models” that work.
You keep pointing out that the city has been powerless to help the DACHA members all these years. I’m wondering it the council and staff asked the city attorney to look for innovative ways to help them before the decision to foreclose. Apparently, lots of money has been spent doing things (some questionable?) that didn’t work.
It’s a shame that things turned out this way, and I’m sure you’re tired of explaining how the city couldn’t have done anything else to have helped prevent this outcome. So, I’ll turn to the current question: What’s the city’s plan for disposing of the DACHA properties and using the funds?
[quote]lthough I get the feeling you’re avoiding my questions and comments and responding with statements about something else, it may just be I’m not clear enough. I’m sure the law doesn’t require the city to provide no advice or support to a failing city project.–[b]JustSaying[/b][/quote]I thought that I was being very clear and direct. Why don’t submit a list of very specific questions and I will answer them if I can.
The law did in fact allow us to provide help to DACHA, and we did (although David Thompson and Luke Watkins claimed that this help was illegal, the courts and the grand jury have said that it was legal).
Then DACHA was sued by NP, as I have described many times above. We are now fulfilling our fiduciary responsibility to the affordable housing program by recovering our funds. DACHA members have stated that they too think it is in their best interest that we dissolve the insolvent public benefit corporation, so we are bringing the dissolution to the AG office for approval.
When we recover the funds, they will be reinvested in affordable housing, as required by law. We have not yet approved the projects.
[quote] You pleaded inability to be specific because you’re now counsel for DACHA[/quote]
I am not counsel for DACHA. I am only working pro bono on the dissolution of DACHA on behalf of a DACHA resident – and that has taken me extraordinary hours to do…
[quote]”…either we can try innovative projects and trust that the developers will make necessary adjustments, or we will have to stay with very conventional models. We cannot foresee all contingencies, and we cannot micromanage. As Max Weber will tell you, trust is essential to successful capitalism.”[/quote]
Where the city’s affordable housing project is innovative, and there are clear red flags for possible conflicts of interest, the city has IMO a fiduciary duty to both citizens and potential homeowners, to supervise the inception of the model to ensure any conflicts of interest do not become incorporated into contracts for the project – AT A MINIMUM. If the city is not willing to provide such basic fiduciary oversight, then it has no business getting involved in such a questionable project…
[quote]”I am not counsel for DACHA. I am only working pro bono on the dissolution of DACHA on behalf of a DACHA resident – and that has taken me extraordinary hours to do…”[/quote]Okay. My point with you was an understanding of your plea not to provide specific answers about negotiation potential as this conversation rolls on.
My point with Sue was that the city–if unable to provide direct legal support of funds for it–could have, at the very least, helped DACHA informally to find someone like you to make sure they didn’t fail to show and didn’t end up with default judgments.
I would think the DACHA folks would engender significant sympathy in their hours of need. There are all kinds of movements that provide support to people losing their homes through foreclosure.
It’s been suggested that DACHA members weren’t sophisticated enough to deal with their own organization’s issues. Maybe they didn’t know how to track down help or even know that they needed help. But, didn’t city leaders and staff (with all their contacts and DACHA involvement) have a responsibility to help find [u]some[/u] workable way to keep this from happening, particularly once they knew things were starting to fall apart.
It’s also been suggested that David T. got this project and its funding because he bought off the city council. But, even if that’s true, didn’t the succeeding councils and staff feel any obligation stop him once it was apparent to them that he was doing bad things?
(Of course, David T. apparently thinks the city did provide such funds to DACHA. If so, why was David T. able to get default judgments against them? It’s all a little confusing….)
I figured you’d be thankful to have me give up bugging you on this issue, Sue. So, I appreciate your willingness to indulge me even more.
There are a number things that just don’t ring right to me with the DACHA case. If it’s a fact that the avarice of Thompson and Watkins is totally responsible for bringing it down (as is being portrayed here), why would the full forces of the city be inadequate to the tasks of setting up, monitoring and problem correcting with these two selfish businessmen? I’m interested in the broad issues here, but knowing the specifics of this initiative obviously is critical to understanding the setting in which everyone operated.
Obviously, the history and details of DACHA are complicated. Every time I think I understand, there’s something else to consider. I’ll take some time to organize my remaining questions in some concise form, and get back to you.
Again, thank you for not bailing out even though the discussion has dragged on for such a long time.
[quote]…the city–if unable to provide direct legal support of funds for it–could have, at the very least, helped DACHA informally to find someone [i][to give free legal help][/i]….I would think the DACHA folks would engender significant sympathy in their hours of need. There are all kinds of movements that provide support to people losing their homes through foreclosure.–[b]JustSaying[/b][/quote]I’ll try to address this specific question. I was told that DACHA tried legal aid and couldn’t, and that people who inquired on their behalf had the same experience. I was told that David Thompson and/or Luke Watkins had used so many attorneys and firms over the years that many attorneys were conflicted out. This is all second hand. The city’s hands were legally tied. Elaine might be able to give you more information on this front.
My concern re. this specific question whether the city council and staff were diligent in assuring that DACA members got adequate legal assistance from its inception and on a continuing basis–as the co-op was being formed and from the time individuals joined to the organization to the development of contracts to the operation (assuring that the group followed the law and its own rules) to dealing with members behind on payments to making sure they were adequately represented in the city’s foreclosure process.[quote]”We were not allowed to help DACHA, to provide them legal representation, etc.”[/quote]Are we positive that the city cannot incorporate this kind of support into a project or a part of the city’s oversight, much as any other type of management support, to help assure a successful venture.
It seems as though this would be a basic part of any complicated, city-subsidized project of this type, innovative or conventional.
[quote]Are we positive that the city cannot incorporate this kind of support into a project or a part of the city’s oversight, much as any other type of management support, to help assure a successful venture.–[b]JustSaying[/b][/quote]This is what I have been told. I can ask the attorneys if it is technically possible to insist that any contract with an affordable housing developer include provisions that would pay for the tenants’ legal fees if they are sued by the developer or consultants, or enable the city to have the option of paying, etc.
[quote]I’ll try to address this specific question. I was told that DACHA tried legal aid and couldn’t, and that people who inquired on their behalf had the same experience. I was told that David Thompson and/or Luke Watkins had used so many attorneys and firms over the years that many attorneys were conflicted out. This is all second hand. The city’s hands were legally tied. Elaine might be able to give you more information on this front.[/quote]
It is our understanding even basic legal aid was conflicted out!
[quote]”I was told that David Thompson and/or Luke Watkins had used so many attorneys and firms over the years that many attorneys were conflicted out.”
“It is our understanding even basic legal aid was conflicted out!”[/quote] I’d say this second-hand information would have deserved a second look when if first was offered. It just does not make sense that Thompson could possibly have “conflicted out” dozens (hundreds?) of attorneys just in Yolo and the surrounding counties, including legal aid attorneys.
I guess it’s possible that someone who didn’t care to look might have said after-the-fact that they couldn’t find a single attorney that Thompson hadn’t hired before. It’s nonsense.
Here’s the first source I found via Google: http://www.lawhelpcalifornia.org/CA/StateSubTopics.cfm/County/ /City/ /demoMode/= 1/Language/1/State/CA/TextOnly/N/ZipCode/ /LoggedIn/0/iTopicID/835/sTopicImage/g-housing.gif/bAllState/0
LawHelpCalifornia “helps low and moderate income people find free legal aid programs in their communities, and answers to questions about their legal rights.” It has a specific section focusing on housing legal help.
Establishing a housing coop requires legal expertise, whether from the city or other participants. DACHA needed more than just provisions “that would pay for the tenants’ legal fees if they are sued by the developer or consultants.”
They needed legal help to [u]avoid[/u] making decisions that could place them in jeopardy of being sued in the first place. It sounds as though they might have done things that violated their rules, their contracts, city rules or state laws or regulations or that just wasn’t in their own financial interests.
[quote]They needed legal help to avoid making decisions that could place them in jeopardy of being sued in the first place. It sounds as though they might have done things that violated their rules, their contracts, city rules or state laws or regulations or that just wasn’t in their own financial interests.[/quote]
DACHA members should have had Errors and Omissions Insurance for Board members, but the city allowed it to lapse without telling the DACHA Board. You can see the whole sorry saga by accessing the packet for Tuesday night’s City Council meeting – look for the Dissolution Plan…
And by the way, we tried diligently to find legal assistance – and were completely unsuccessful…