The City Council, stung in this month's election campaign by two candidates' assertion that it wasn't monitoring Redevelopment Agency deals closely enough, moved Monday to take a tighter rein on project agreements.
At its first meeting after the election, the council instituted a stringent oversight policy requiring that all but the most minor changes in agreements with developers be approved by the council in public session.
The council now includes two newly elected members who criticized Redevelopment Agency policies during the campaign. Both they and council veterans who defended those policies said the changes should end the community uproar over the issue.
'Should Not Drag On'
"I'd like to put this matter to bed," said new Councilman William Tarozzi, who first raised the issue during the campaign. "It should not drag on until the next election."
At a public forum in March, Tarozzi disclosed that Assistant City Manager Leonard Eliot had accepted developer Ziad Alhasson's promise to repay a $567,264 debt without seeking formal council approval of the terms of the repayment agreement. Among other things, Alhasson owns the West Covina Mitsubishi auto dealership and is building the 13-story Eastland Business Tower.
Eliot's decision to allow Alhasson to repay the debt over 12 years, without interest payments or collateral, became the central issue of the campaign, which ended with the ouster of 20-year council veteran Kenneth I. Chappell.
Agreed to Split Cost
The debt stemmed from the $30-million West Covina Village development. The city and Alhasson had agreed to split any cost overruns for acquiring the land.
Tarozzi, newcomer Bradley McFadden and incumbent Nancy Manners won the three open seats from a field of seven in the April 12 election. In part, Chappell has blamed the controversy for ending his council tenure.
Throughout the campaign, Chappell, Manners and other council members said they were informed of Eliot's negotiations with Alhasson, and Eliot said he was following policy set by the council. Tarozzi, although not specifically challenging the propriety of the repayment agreement, said the council violated public trust by its failure to approve such a repayment in public.
At Monday's council meeting, Councilman Robert Bacon, while maintaining that there was nothing wrong with the Alhasson agreement, suggested a new review policy that will require council approval of any renegotiation involving $5,000 or more.
Bacon, an attorney, said the original agreement with Alhasson, the terms of which were "less than artfully drafted" by a law firm no longer employed by the city, gave Eliot wide latitude in working out the repayment. Moreover, he said, the council was fully and properly informed of the negotiations.
The problem, Bacon said, was the tacit approval given by council members, who should have voted on the repayment agreement in public session.
'It Was Wrong'
"Mr. Eliot did not make a decision on his own," he said. "We made an error and did not agendize that item. And it was wrong."
Bacon said the new policy will prevent future controversies over renegotiating financial matters.
Tarozzi, who quibbled with Bacon's assertion that council members were kept abreast of the negotiations, concurred that the manner in which the council approved, or failed to approve, the agreement was the heart of the problem.
Even if the council was fully informed and condoned Eliot's actions, he said, approval should have come in public.
But Tarozzi agreed with Bacon that the policy should end the issue.
Tarozzi suggested, and Bacon added to his proposal, that the Redevelopment Agency staff provide the council with more specific details about financial arrangements on future projects.
The agency provides details in summary form, but the council is seeking exact explanations of a developer's financial backing and specific repayment schedules and amounts.
"The public wants to know beforehand, and they don't want secrecy to enter into the decision," Tarozzi said.
Manners, who presided over the council as mayor for the first time Monday night, said she would have proposed such a policy after the issue arose in the election, but "it would have been self-serving."
"This matter never came up before," Manners said, adding that if all changes are approved by the council, "there will be no chance for a misunderstanding happening again."
The policy, which was approved unanimously, will probably mean more work for the Redevelopment Agency staff, which will have to get council approval for relatively minor financial changes on multimillion-dollar projects, said city Redevelopment Manager Chester Yoshizaki.
Not Tied to Dollars
Moreover, he said, many changes in building design and materials made during project negotiations are not tied to dollar amounts, which will force staff members to seek council approval to avoid uncertainty over the $5,000 limit, he said.
"We're just going to have to go back to the council a lot more," he said.
Bacon proposed the $5,000 amount because city employees have been routinely able to authorize contracts for up to that amount. When asked if it would prove cumbersome to staff, City Manager Herman R. Fast said: "Let us work with the $5,000, and if it's a problem, we'll come back to council."
In adopting the policy, the council rejected staff recommendation and citizens' pleas for an independent review committee.
The agency staff had recommended that any change in negotiated agreements be reviewed by the mayor and vice mayor, who could approve or reject the amendments.
Before the meeting, Manners rejected the idea of a committee of two, arguing that amendments, like the original agreements between the agency and developers, should require full council approval.
"Any change substantial in nature should come to the council for approval," she said.
As for the citizens committee, Tarozzi and others argued that developers would balk at bringing the general public into negotiations and that elected officials should have the ultimate responsibility and not dilute their authority.
"No elected officials would ever agree to that," he said.