FINAL REPORT - San Bernardino Superior Court

5. SCLAA Bond Expenditures
The Victor Valley Economic Development Authority (VVEDA) Joint Exercise of
Powers Agreement stipulates the uses of tax increment that is raised on parcels
of the former George Air Force Base (GAFB), as well as the tax increment from
the member jurisdictions’ territories. The VVEDA JPA specifically requires that
tax increment revenues, which are to be allocated to GAFB shall only be used for
purposes that directly benefit redevelopment of GAFB. The VVEDA JPA also
delegates the authority of the management and operation of the GAFB parcels,
including budgeting authority, redevelopment authority, and all management
and operational authority to the Victorville City Council, “which shall act on
behalf of the [VVEDA] Commission on all such matters.”
The Victorville City Council, acting as the Southern California Logistics Airport
Authority (SCLAA) Board of Directors, and City management mishandled
SCLAA bond funds in three separate instances.
In late 2005 and early 2006 the City, through its Redevelopment Agency,
inappropriately purchased several parcels near city hall for the purpose of
constructing a library using nearly $2 million of SCLAA bond funds that were
restricted for the development and redevelopment of GAFB and not disclosed in
the bond’s official statements. Attempts to correct the inappropriate use of such
funds have been inadequate.
In June 2005 the City purchased land for the I-15/Nisqualli Road interchange
project using approximately $3.3 million of SCLAA bond funds. Although this
project was listed in the bond disclosures, the expenditure was weakly justified.
Further, the City has no controls to ensure that funds restricted to GAFB were
not used for this expenditure.
From June 2005 through 2010, the City procured professional services, land, and
power generating equipment for the Victorville Power Plant 2 (Victorville 2)
project using over $76 million of SCLAA bond funds that were restricted for the
redevelopment of GAFB. City management has asserted that the power plant,
which was to be built on parcels near GAFB, would benefit the redevelopment of
GAFB by helping to attract commercial tenants with competitively priced
electricity. However, official documentation of the project shows that it was
primarily for the purposes of providing the City a revenue stream and to secure
competitively priced electricity for its constituents and potentially for other
jurisdictions in Southern California.
Harvey M. Rose Associates, LLC
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