Councilmen Deny Claim of Conflict : Hawthorne: The three said they did nothing wrong when they extended the city trash contract of the developer from whom they bought their homes.

Three Hawthorne city councilmen who bought new houses from a developer who was also the city’s trash collector have denied conflict-of-interest allegations leveled against them last week by a citizens watchdog group.

Martha Bails, president-elect of the Hawthorne Assn. of Taxpayers, a recently formed committee of residents and business representatives, said Councilmen G. Steven (Steve) Andersen, David M. York and Charles (Chuck) Bookhammer received breaks on the price of their homes and later extended the city’s trash collection contract.

York, Bookhammer and Andersen say that they paid the standard price for their homes and that the purchases played no role in their decision to extend the contract three years later.

All three bought houses from developer George Tumunjan in 1986. At the time, Tumunjan owned H & C Disposal Co., which had been awarded a succession of contracts for collecting the city’s trash. Since 1958, the city has not sought bids from other trash collection companies.

In 1984-85, the Los Angeles County Grand Jury investigated the Hawthorne trash contract and recommended that city officials seek competitive bids.

City officials have defended the lack of competitive bidding, saying that the company provides good service and that its residential rates are comparable with those in similar cities.

But in 1989, York, Bookhammer and Andersen voted to extend the H & C contract, which had two years to run, for five years without seeking bids. The extension was worth an estimated $25 million. Voting against the extension were Mayor Betty Ainsworth and Councilwoman Ginny Lambert. Tumunjan sold his interest in H & C shortly after the contract was extended.

Bails called at Monday’s council meeting for another grand jury investigation to examine the contract extension and house sales. Her statement drew an angry response from Andersen, who said he welcomed a probe.

“Read my lips: Go ahead and investigate,” Andersen said. “You want to investigate? Make my day.”

Bails also accused the council majority of paying Tumunjan about $9 million for a 9.8-acre property in western Hawthorne and then selling the same land back to the developer for about half the price.

Tumunjan could not be reached for comment. But Bud Cormier, the city’s redevelopment coordinator, said in an interview that Bails was mistaken in her description of the deal.

Cormier said the city bought the land from Tumunjan and sold it to Costco, a retail warehouse company for home improvements. He confirmed that Costco paid only about half of what the city paid Tumunjan. However, he said Costco also loaned the city the rest of the money owed to Tumunjan. This enabled the city to complete the transaction without spending any of its own money. Under the arrangement, the city is repaying the Costco loan through the tax revenues the property is generating.

At the council meeting Monday, Andersen said the arrangement was necessary to develop the land, which lies in a redevelopment area.

Bookhammer said the allegations brought by Bails are the work of Ray Sulser, a defeated 1989 council candidate. “Ray Sulser is trying to discredit the council because he didn’t win the election,” he said.

Sulser conceded that he had provided research to the activists’ group but denied that he is motivated by envy.

“I am glad I did not win the election,” he said. “I can get up there and say what is going on, where, if I am sitting on the council, that would be hard for me to do.”

Sulser said the house that York bought has the same floor plan and was in the same phase as the house directly behind his. He also said real estate records show that York paid $28,000 less for his house. He said Bookhammer bought a house that cost $8,000 less than one with the same floor plan directly behind his that was also sold in the same phase.

But Bookhammer permitted The Times to examine documents from the developer showing that he and York bought houses in the first phase of the project, and that the houses behind his and York’s were built in the second phase, when prices were higher. Prices in the west Hawthorne development ranged from $240,000 to $320,000.

Sulser said he did not have a direct comparison for Andersen’s house, which sits on a large, pie-shaped lot.

York said he was prepared for any investigation.

“You have my blessing,” he told Bails. But he said he was upset that Bails had “cast aspersions on my integrity. . . . Some of you people out there are really disheartening.”