Report in Calabasas says money was wasted in fight against Ahmanson

By Michael Picarella Acorn Staff Writer

Calabasas released a report last week that says that the city mismanaged the Ahmanson Ranch litigation. Ahmanson was a 3,050-home, two-golf-course development that Washington Mutual wanted to build north of Calabasas in Ventura County. The city and other entities fought the Seattle-based bank for 12 years. California recently purchased the land so it will remain undeveloped.

The Calabasas City Council hired a law firm, Spolin Silverman Cohen and Bartlett LLP, to conduct a limited investigation into the city’s litigation against Washington Mutual. More specifically, the council wanted a closer look at the work of the city’s hired special counsel on Ahmanson, Katherine E. Stone.

Stone worked on the case for about nine years. Calabasas spent about $2 million on Ahmanson lawsuits, according to Mayor James Bozajian, not including city staff salaries.

According to the Spolin report, "The city’s inadequate management and oversight of the litigation resulted in a lack of direction and control over the strategy of the litigation and cost control over attorneys and consultants."

The Spolin firm also stated in the report that Calabasas lacked effective checks and balances that were necessary to manage the litigation. Further, the city staff overseeing the litigation had insufficient experience in accounting and finance skills, the report said, and without adequate involvement or direction of the finance department, the city manager and city attorney were deficient in their supervision of the litigation. The city also operated without a routine contracting process, the report said, and the city council took action regarding the litigation in closed sessions while not reporting it publicly.

"It is my opinion that the release of the Spolin report is the single most important action (of the city) this year," said Calabasas City Councilman Barry Groveman at last week’s council meeting. "Although limited in scope, it provides the public with compelling justification for the overhaul of the city government that has occurred over the past six months."

To make the city operate more efficiently, according to Groveman, the city replaced Stone, hired a new city attorney and city manager, and created a new job—chief financial officer—which replaces the finance director position. The finance director had less responsibility.

"We also enacted a waste reduction initiative aimed at focusing city officials on the goal of cutting waste inefficiency," Groveman said. "We established subcommittees so each council member has an area of focus and accountability, and we now require bids for large contracts (such as that of city attorney)."

"The purpose of (the Spolin) report was to find out why the legal bills were so out of control," said Calabasas City Councilwoman Lesley Devine. She and others are glad the problems were solved, she said.

"Finally, this Ahmanson nightmare is over," said Calabasas City Councilman Michael Harrison. "This nightmare had two parts. One was the project itself with traffic that would’ve clogged every major road in Calabasas, and the other part of the nightmare was the way that certain people handled the fight against the project.

"This report substantiates and corroborates all the complaints I had repeatedly raised about the way we conducted our fight since September 2001," Harrison said.

Harrison was frequently ignored or rejected by other council members when he criticized how the city was handling its lawsuits or when he requested specific information regarding invoicing and payments, he said.

Several other problems aren’t addressed in the Spolin report due to the limited scope of the investigation, Harrison said. City funds were spent on special meetings not organized or sponsored by Calabasas, according to Harrison. Special counsel Stone, while working for Calabasas, represented other litigants. This, said Harrison (who’s an attorney) is a violation of professional conduct.

"Two of the bills that we’ve approved that are subject to this Spolin report are for law firms that this council has never heard of," Harrison said. "It’s not possible under the rules of professional conduct to have an attorney/client relationship under these circumstances."

Such mismanagement in city hall caused for about $1 million in waste, Harrison said.

Calabasas City Councilman Dennis Washburn said he didn’t want to release the Spolin report to the public.

"I think that this (report) is inappropriate to release and I’ve said it all along," Washburn said. "I think the issues that have been resolved by the change of our staff and by the change of our policies reflect the nature of this council’s particular disposition. . ." Washburn said he was worried that publicizing the report would put the city in legal peril.

"There is an abiding need of all elected officials to always make sure that the public knows how they conduct their business," said Groveman, who’s also an attorney. "And for that reason, the laws and the case law have always made very clear the public official privilege in council meetings and in the Senate, in courtrooms and elsewhere," he said.

"The public has an absolute right to see this report and judge for themselves why we have taken the major steps we have to reform city government," Groveman said.

The payments the city made to Stone and to others allegedly not approved by the council could be interpreted as settlements to avoid litigation, according to Harrison. Lawsuits would be even more costly, he said.

Stone denied allegations in the Spolin report and said she followed standard procedures that were required.

"I’m totally shocked at this report," Stone said in an interview. "In June of this year, (Spolin and the other investigators) met with me and my attorneys. . .and assured us over and over again that they had completed their investigation and they found no wrong doings whatsoever and that I had done a superb job for the city."

Former city attorney Charles Vose said he couldn’t comment on the Spolin report because of his previous relationship with the city and because of attorney/client confidentiality privileges.

The outgoing city manager, Donald Duckworth, said he didn’t want to get into a political debate regarding the report in the press and he limited his comments to just that.

The Spolin report is available to the public at city hall, 26135 Mureau Road in Calabasas. For more information, call city hall at (818) 878-4225.

A copy of the report can also be viewed on the city’s Website. Log onto the Internet and type in the following link: http://www.ci.calabasas.ca.us/spolinreport.html.