EXCLUSIVE UPDATE: Fresno County Schools superintendent Jim Yovino issued the following statement to CVObserver on Friday morning.
“Prior to my election as Fresno County Superintendent of Schools, former Superintendent Larry Powell appointed volunteer representatives to the 17 redevelopment agency oversight boards in Fresno County. The Fresno City Redevelopment Agency Oversight Board appointee was Dr. Terry Bradley.
As a result of recent events, Dr. Bradley and I have mutually agreed the proper course of action is to replace him with a member of my staff.
It is my belief that appointments I make to RDAs should primarily be Fresno County Office of Education or school district employees. By choosing an appointee in this manner, I can have a closer working relationship with that person. I am in the process of reviewing the remaining Fresno County RDA appointments to decide on next steps for those positions, as well.”
6/29/2015: It appears to be up to Fresno County Schools Superintendent Jim Yovino as to whether Terry Bradley has a future on the Fresno Redevelopment Agency Oversight Board.
“If Jim wants me to continue to serve, I will,” Bradley told me by phone on Tuesday.
The two issues at play are Bradley’s recent settlement agreement with the Securities and Exchange Commission and the complex nature an obscure but important board working out of City Hall.
First, the Bradley/SEC settlement. I give you the first page of the SEC’s press release of June 13:
“The Securities and Exchange Commission today announced that two California-based municipal advisory firms and their executives have agreed to settle charges that they used deceptive practices when soliciting the business of five California school districts.
“An SEC investigation found that while School Business Consulting Inc. was advising the school districts about their hiring process for financial professionals, it was simultaneously retained by Keygent LLC, which was seeking the municipal advisory business of the same school districts. Without permission, School Business Consulting shared confidential information with Keygent, including questions to be asked in Keygent’s interviews with the school districts and details of competitors’ proposals including their fees. The school districts were unaware that Keygent had the benefit of these confidential details throughout the hiring process. Keygent ultimately won the municipal advisory contracts.
“This is the SEC’s first enforcement action under the municipal advisor antifraud provisions of the Dodd-Frank Act.
“’This unauthorized exchange of confidential client information could have given Keygent an improper advantage over other municipal advisors that were candidates for the same business,’ said Andrew Ceresney, Director of the SEC Enforcement Division. ‘The Dodd-Frank Act prohibits this type of deceptive behavior by advisors when dealing with municipal issuers.’
“School Business Consulting also is charged with failing to register as a municipal advisor.
“’These laws apply not only to municipal advisors, but also those who solicit business on behalf of municipal advisors,’ said LeeAnn Ghazil Gaunt, Chief of the SEC Enforcement Division’s Public Finance Abuse Unit. ‘Municipal entities should be able to trust that their selection of a municipal advisor is untainted by any breach of fiduciary duty.’
“Without admitting or denying the findings in the SEC’s orders instituting settled administrative proceedings:
“* School Business Consulting agreed to a censure and a $30,000 penalty.
“* The firm’s president Terrance Bradley agreed to be barred from acting as a municipal advisor and must pay a $20,000 penalty.
“* Keygent agreed to a censure and a $100,000 penalty.
“* Keygent’s principals Anthony Hsieh and Chet Wang agreed to pay penalties of $30,000 and $20,000 respectively.”
Bradley, 72, is a former superintendent of Clovis Unified School District. He had a long and distinguished career as a Clovis Unified educator.
The Bee’s Rory Appleton has reported extensively on the SEC/Bradley settlement and its local fallout.
Second, we come to the Fresno Redevelopment (RDA) Oversight Board.
Bradley is chairman of the seven-member board. The board plays a key role is the dissolution of the RDA.
As you may recall, Gov. Brown and the state legislature several years ago decided to kill the hundreds of RDAs throughout the state. The reason: Sacramento faced a money crisis caused by the Great Recession; the property taxes that fueled RDAs were part of the state’s recovery plan.
Fresno City Hall was sad to see the RDA die. The agency did a lot of good work – economic development, low-income housing – in poorer parts of town.
But getting rid of an RDA is not a simple task. Fresno’s RDA over the course of 50-plus years generated a lot of legal obligations and bought a lot of property. One of the biggest obligations was a multi-million-dollar debt to City Hall. This debt is being paid in annual installments that are helping rebuild the general fund reserve.
The Oversight Board reviews many of the decisions/recommendations made by the RDA staff when it comes to slowly but surely dissolving Fresno’s RDA. (Actually, the staff is now part of the Successor Agency, but explaining that name change is more trouble than it’s worth.)
The board’s decisions, in turn, are subject to review by the state Department of Finance.
Fresno Oversight Board meetings can be dramatic stuff, at least for a government meeting fanatic like me. That’s partly because of the board’s structure.
The money generated by the RDA’s dissolution – proceeds from the sale of real estate, for example – goes to a specific group of local public agencies. These include the City of Fresno, Fresno County, schools and special districts (like the Flood Control District).
The schools part of this funding equation is complicated. For now, we’ll keep things simple by ignoring the complexity.
These public agencies appoint the Oversight Board’s members. Terry Bradley was appointed by Larry Powell, then Fresno County Schools Superintendent. That position is now held by Jim Yovino.
The Fresno Oversight Board’s duties are starting to wind down. Still, the board in the coming months figures to deal with hundreds of thousands of dollars of public money generated by land sales.
In light of the SEC settlement, is Bradley still the right person to hold such a position of public trust? (I’m referring to his presence on the board. The board’s members determine who is chairman.)
Bradley over the decades has earned the admiration of many for his years of service in public education. My question has nothing to do with such honor. My question deals with public policy. Public policy is unforgiving when it comes to individuals holding the public trust. Public policy is all about what’s best for the institution conducting the people’s business.
The SEC eight-page settlement agreement with Bradley states that he is “barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization; and prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter.”
Near as I can tell, there’s nothing in those two provisions that keeps Bradley from serving on the Fresno RDA Oversight Board. Of course, Bradley can decide on his own to resign from the board. Nothing he said to me on Tuesday suggests that is on his mind. (Bradley also said he is unable to discuss details of the SEC settlement.)
At the same time, Bradley said, he would stay or resign according to Yovino’s wishes.
A spokeswoman for the County Office of Education said Yovino was out of town on Tuesday, and would return to his office on Wednesday. I said I would drop by on Wednesday to chat with him.
In conclusion, let me add that I have been most impressed with Bradley’s work as Oversight Board chairman. It’s not an easy job.
Several board members have strong opinions on most issues. I’m thinking former County Supervisor Doug Vagim, current County Supervisor Debbie Poochigian and City of Fresno Economic Development Director (and former two-term Fresno City Council member) Larry Westerlund. These three come from different perspectives and really know how government works. They are committed to aggressively and effectively serving the entity that appointed them.
That combination often makes for intense debate during meetings.
Bradley also knows his stuff when it comes to government machinery. More important for a chairman, he knows how to run a meeting. Don’t forget, the Fresno RDA Oversight Board is the entity that, early in its life, got into such an internal snit that it voted to sue itself. That Bradley is able to keep the periodic chaos down to a modest roar while moving diligently through long agendas is proof of his considerable value to the varied interests that depend on an efficient Oversight Board.
Bradley does it with leadership.
Then came the SEC/Bradley settlement of June 13 and the attendant good government questions.
Superintendent Yovino – your call.