FINAL REPORT - San Bernardino Superior Court

Section 5: SCLAA Bond Expenditures
December 2007 to authorize the security agreement with General Electric for the purchase of
Victorville 2 power generation equipment, provides only a vague justification for the use of
SCLAA bond funds. Specifically, the resolution states that SCLAA is:
empowered to raise revenues by the issuance of bonds secured by incremental financing proceeds collected
within the Project Area in order to finance redevelopment activities within and benefitting the Project Area.
While the resolution does not define or specify the “Project Area,” the City generally refers to
the Project Area as the parcels outside of the GAFB that have been designated as part of the
VVEDA Redevelopment Project Area. While the Victorville 2 project does fall within this
project area, it is not within the powers of the SCLAA to cause the redevelopment outside of the
former GAFB parcels or than for improvements “adjacent to and directly benefitting the GAFB
Parcels.” 3 (emphasis added)
City Press Release Announcing Agreement with General Electric
On November 29, 2007 the Victorville Director of Public Information posted a press release
announcing that the City had entered into a contract with General Electric for power generation
equipment. The press release is additional evidence that the Victorville 2 project used SCLAA
bond funds for the primary benefit of the City of Victorville. Specifically, the press release touts
that the “project is going to change Southern California’s energy supply picture and place
Victorville on the global energy map.” The document also confirms that the project is owned by
the City, not by the SCLAA. Specifically, the press release states that the City could sell the
development rights to the plant or:
the City could retain ownership [of the power plant] and use the project as the centerpiece of a Community
Choice Aggregation entity, which would allow its member communities to receive the benefit of lower
priced electricity.
The Community Choice Aggregation entity mentioned in the quote above refers to a joint powers
agency that the City had formed with the City of San Marcos and described in Section 3 of this
report. Specifically, the JPA with San Marcos formed the California Clean Energy Resources
Authority (Cal-CLERA). City officials had previously considered the potential of Cal-CLERA as
a vehicle for selling power to other jurisdictions from the Victorville 2 Plant.
The only mention of the airport in the press release states that the project will be built at the
Southern California Logistics Airport and that it will be a “major milestone in the complex.” The
actual parcels designated for this project are outside of the former GAFB approximately two
miles north of the airport.
Unclear Tax Increment Benefit to SCLAA
Although City management has asserted that questioning the benefit of the Victorville 2 power
plant ignores the benefits received by the previously built High Desert Power Plant, it is unclear
that SCLAA would see the same benefits with this second plant. Specifically, the High Desert
Power Plant provides increased tax increment financing to SCLAA. However, the Victorville 2
3 Fourth Amended and Restated VVEDA JPA Section 8 (Delegation of Authority).
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Harvey M. Rose Associates, LLC