Grants to nonprofit are deemed illegal

An Oxnard-area utilities district Tuesday denounced allegations that it broke the law when it paid more than $17,000 to a nonprofit group engaged in a legal fight with Ventura County over a proposed boating center.

John Matthews, general counsel for the Channel Islands Beach Community Service District, said a legal finding by county Counsel Noel Klebaum was based on erroneous information and “hearsay” and should be viewed as such.

The beach district board was within its rights to pay for legal services on an issue that falls within the boundaries of the special district, even if it didn’t bring the lawsuit itself, Matthews told the county Board of Supervisors.

Accepting Klebaum’s opinion would send a “dangerous message” to other public boards, the lawyer said.

“I don’t think the Board of Supervisors wants to tell other boards not to look at projects taking place in their districts,” he added.

The board majority, however, praised the 18-page opinion as fair and thorough. Klebaum’s staff prepared the legal opinion at the request of Supervisor Steve Bennett after issues of impropriety were raised in an April article in the Ventura County Star newspaper.

Supervisors also rejected the implication made by two speakers that Klebaum’s legal analysis was intended to intimidate beach district board members who oppose the location of the boating center at county-owned Channel Islands Harbor.

“There is no grand conspiracy,” Supervisor Kathy Long said. “We are not going after anyone. The report gives the public the opportunity to look at this and ask, ‘Does this pass the smell test?’ ”

The board voted 4 to 1 to accept Klebaum’s opinion but took no further action. Dist. Atty. Gregory D. Totten said last week he is conducting his own inquiry into the payments, and supervisors said they would wait to see the outcome.

Supervisor John Flynn, whose district includes Channel Islands Harbor, opposed the motion, accusing Bennett of engineering its creation to intimidate the beach district’s governing board.

Flynn and Bennett have frequently clashed over issues concerning the harbor, but Tuesday’s debate turned fiery. Flynn at one point said Bennett’s request for the legal opinion “scared a lot of people” and was aimed at silencing opposition to the boating center.

Bennett said Flynn had little credibility and urged county government employees not to be cowed by him.

“It’s a new day in county government,” Bennett said.

The payments in question began in 2004 as the nonprofit Beacon Foundation was suing the county to stop construction of the boating center. Over the next year, the beach district board approved $17,450 in grants to the foundation, according to Klebaum’s opinion.

Under state law, the grants amounted to an illegal gift of public funds, according to Klebaum’s analysis. Special districts, such as the utilities board, can pay only for litigation that is related to their mission, he said.

The Beach Community Service District’s mission is to provide water, trash and sewer service to residents of the unincorporated county areas of Hollywood Beach and Silver Strand. Matthews, the service district’s attorney, said the lawsuit is relevant because the beach district would provide utilities to the boating center.

The two-story center has been in the planning stages for five years, delayed by lawsuits and regulatory fights by nearby beach residents who oppose its construction.

It has been approved by the Board of Supervisors and the California Coastal Commission but is on hold, pending the resolution of another lawsuit brought by a local environmental group.

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catherine.saillant@latimes.com