Legal fight looms over control of Bell

The California attorney general’s office announced that it will proceed with court action against the city of Bell after talks broke down over installing an outside monitor to oversee the scandal-ridden city.

The decision sets the stage for a legal fight over control of an independent city — one that is without clear precedent in the state. Courts have placed school districts into receivership, but experts said they cannot remember a California city having an overseer imposed upon it.

Bell, however, may be a unique case: Four of its five City Council members face criminal charges as do several of the city’s former top administrators.

State officials had been negotiating the issue of oversight for several weeks with the city’s current interim manager and attorney, who were brought in after the city’s previous top officials resigned this summer.

But talks with the city broke down when it became clear “we couldn’t come to an agreement that we felt guaranteed accountability and transparency,” Chief Deputy Atty. Gen. Jim Humes said in a statement.

State officials said that at a minimum, they plan to ask a court to appoint a special monitor with complete access to city records who would provide independent oversight over city affairs. But Jim Finefrock, a spokesman for the attorney general, said officials also might ask a judge to place the city into receivership, in which a court-appointed official could have the power to veto council decisions or set policy independently of elected officials.

“Our main goal has been to ensure accountability and transparency in city management until new elections can be held and to do so without imposing high costs,” Humes said. “Because the city is unwilling or unable to agree to a resolution that would achieve our goals, we plan to go to court.”

Bell’s current officials have opposed giving up so much authority to a court-appointed official. Jamie Casso, Bell’s interim city attorney, said he was surprised and thought the city was still negotiating with the office of Atty. Gen. Jerry Brown. Casso said the city has tried to address the attorney general’s concerns and has offered an alternative proposal for governing the city, which he declined to detail.

“I sent them another letter this afternoon, hoping to continue an open dialogue with them,” Casso said

Lorenzo Velez, the city’s only council member not charged with corruption, also has opposed the idea of a court-appointed receiver for Bell. Velez has publicly said he feared the move would dilute local control over the city’s affairs and ultimately would make City Hall less accountable to the public.

“What people don’t understand is that they think we’re still going to participate in the handling of the day-to-day business,” Velez said in a recent interview. “The receiver is going to take over all of the administrative operations, and I fear that the city will lose its identity.”

A recent letter from the attorney general’s office to the city outlined some of the powers it wanted a Bell overseer to have. Officials said they wanted the monitor to have full powers to investigate “fraud, dishonesty, incompetence, misconduct, mismanagement or any irregularity” in city government.

The letter also proposed that the city sign a memorandum of understanding with several other conditions, including putting an end to a supplemental pension plan that provides many city workers with retirement benefits in addition to their California state pensions.

The monitor would remain in place until a majority of the council were not defendants in the criminal and civil cases, according to the letter.

The ultimate outcome of the legal battle could have long-term implications for Bell. The city is still figuring out how to operate after Los Angeles County prosecutors filed criminal charges against eight former council members and officials last month. A City Council meeting was canceled last week, even though hundreds of residents showed up, because only Velez was present and the council didn’t have a quorum required to conduct business.

Additionally, Bell faces severe budget problems because the state controller has ordered the city to refund more than $5 million in taxes that auditors found had been collected illegally. City officials said they are trying to determine whether more cuts will be needed to make up for the lost income.

In September, Brown filed lawsuits against Bell leaders, asking a court to order city officials to vacate their positions and nullify contracts that inflated pay for other top administrators. But bringing in an outside monitor to oversee Bell remains a legal novelty. When Brown suggested the idea last month, he acknowledged that it could break new legal ground.

Patrick Whitnell, general counsel for the League of California Cities, said he could find no laws that would allow receivership for a city.

The last Los Angeles County agency to go under receivership was the Compton Unified School District, which was placed in state hands in 1993. The district remained under receivership for a decade, with mixed results.

During receivership, the elected school trustees were stripped of their power and near-total control was given to a state appointee. Over much of this time, the district continued to experience financial problems and student test scores remained among the lowest in the state. The school board, reduced to little more than an advisory panel, spent years fruitlessly trying to regain its power.

Some Bell community activists said they supported having outside oversight as long as it ends when a new council is elected.

“The main reason why we are in support of a monitor is because there’s a secured deadline,” said Cristina Garcia, a member of Bell to Stop the Abuse. “The problem that you have when you hear ‘receiver’ is that we haven’t heard anything about boundaries, as opposed to a monitor.”

jeff.gottlieb@latimes.com

ruben.vives@latimes.com