The Grand Jury investigation focused on allegations of a secret and illegal business arrangement between the city and Surland Cos. LLC regarding the length of runway 12/30 and a $50,000 payment to the city made by Surland on behalf of the former airport fuel provider, Turlock Air.
The Grand Jury examined whether there was any secret agreement between the city staff and Surland to reduce the length of runway 12/30 from 4,002 feet to 3,997 feet, which would allow Surland to build more homes at its planned Ellis development because of a reduced safety zone for landings and takeoffs at the airport.
Surland proposed an amendment to the Ellis Specific Plan on April 26, 2013: Surland would fund airport fuel payments to the city for a number of years and the city would reduce the runway length and allow Surland to recoup some of the money from fuel sales.
City staff members have maintained that they rejected the proposal outright, and the Grand Jury found no evidence that the city entered into any written contractual agreement — secret or otherwise.
“Ultimately, what I’m focusing on is the grand jury’s determination that there was no evidence to substantiate the complainant’s allegations of a secret and illegal business agreement,” interim City Manager Maria Hurtado said. “I think, for me, that is a very good sign.”
Councilman Robert Rickman was not completely reassured by the findings.
“Their conclusion, it raises some questions,” he said.
Rickman, who would not confirm or deny whether he was interviewed by the Grand Jury, quoted the area of the report he was concerned about.
“ ‘The grand jury questions whether there was specific quid pro quo between the city and the developer for political or other considerations, or just a city attitude of knowing what the results would be but “wink wink” we won’t say anything.’ Even though there’s nothing illegal about this,” he said, pausing for a few seconds before moving to another topic.
Mayor Brent Ives, who confirmed that he was interviewed by the Grand Jury, said the report showed what the council had known for months.
“The Grand Jury came up with exactly what the council came up with: There was no finding of any legal issue with what we did,” Ives said. “We had pretty extensive discussions in the public with council and staff in the more immediate aftermath of the thing. So the Grand Jury is asking the same questions we were already answering for ourselves just four or five months earlier.”
Rickman said that except for his continued questions, there was little public transparency.
“There’s questions that should have been asked in the very beginning and no one did. I was the only person up there willing to ask questions,” he said. “Questions that I asked were blocked every single time. I was the only council member on that thing.”
The report also found that a staff report presented to the council on June 18, which claimed that reducing the length of the runway by five feet would have no effect on future Federal Aviation Administration grants to the city, was inaccurate and incomplete.
In its opinion, the Grand Jury wrote that reducing the runway length would have benefited the Ellis project being developed by Surland, but there was no definitive proof that city employees deliberately misled the council.
On June 3, the city confirmed the FAA measurement of the length of runway 12/30 at 4,001 feet.
Mayor Pro Tem Michael Maciel said he still believed the city staff did nothing inappropriate.
“Surland saw it (questions about the length of the runway) as a potential opportunity as a shortcut to get these things they wanted. And the city staff said, No, that’s not how we do this,” Maciel said.
Rickman said that despite the misinformation, no one on the staff was held accountable.
“When there’s no accountability and no explanation, it becomes scandalous. And this is exactly what happened here,” he said, adding that he did not know what staff members were responsible for the wrong information. “That would be whoever got the information. In this case, I’ll let the public decide on that.”
Rickman said there were times when the staff did not give the council all the facts.
“I think there’s been a problem in the past, and in this issue in general, that staff’s report has kind of pushed council in a general direction,” Rickman said, though he would not single out any former or present employee. “I think who we have up there now, Maria (Hurtado) and Chief (Gary) Hampton (interim assistant city manager) and Jenny (Haruyama, administrative services director), I think the public accepts and trusts those individuals.”
Maciel, who said he was not interviewed by the Grand Jury, said it was clear the staff did nothing wrong.
“People wanted to drive certain perceptions that things were going on, that there were backroom deals. As we know now, there weren’t,” he said.
The Grand Jury report made no determination on the appropriateness of the actions but suggested that the council should adopt a policy requiring city staff members to disclose all substantial changes proposed to any major developments in the city to avoid the perception of collusion.
The Grand Jury also recommended that the city adopt a policy governing third-party payments for contractual obligations to the city, after reviewing a $50,000 payment made by Surland to cover money owed to the city by Turlock Air, then the fuel provider at the airport. The report said there was no indication that the payment was illegal or inappropriate, but a policy could alleviate the appearance of impropriety.
The panel recommended that the City Council instruct the city staff to make a comprehensive review of FAA and state safety zone requirements.
The Grand Jury also issued a recommendation about contractors with the city. The panel found that the city extended a contract with Turlock Air to provide fuel at the airport for 25 years without checking on the status of Turlock Air’s state license. The jury recommended that the city adopt a policy to review any contractor’s license before renewing or amending a contract.
Councilman Charles Manne, who would not say whether he had been interviewed by the Grand Jury, said he was looking toward the future now that the report was public.
“The Grand Jury agreed the claims couldn’t be substantiated and instead provided valuable recommendations,” Manne wrote in an email to the Press. “I intend to take the Jury’s recommendations seriously and the council will discuss them at the appropriate time.”
Rickman said he believed the council should accept completely all of the recommendations. He added that the city might not have suffered the black mark of a Grand Jury report if his initial questions were not dismissed.
“It is up to the council to be the watchdog,” he said. “I think I do already, to be honest with you. On this whole issue of the airport stuff, I asked some very, very tough questions. I asked stuff behind the scenes and I wasn’t getting any answers.”
Councilwoman Nancy Young did not return requests for comment.
The city staff is drafting responses to the Grand Jury report and will present them to the council during the regular meeting Sept. 2 for consideration and approval. The city will then send those responses to the Grand Jury.
Read the entire report at the Grand Jury website.
• Contact Michael Ellis Langley at email@example.com or 830-4231.