By Shawn Raymundo
The San Clemente City Council has reset its sights on the Transportation Corridor Agencies (TCA), as it took steps on Tuesday, Sept. 1, to challenge the development impact fees (DIF) the toll road operator has imposed on residents and developers who have not benefited from the now-abandoned SR-241 road alignment.
Councilors continued to target the TCA on Tuesday night by also calling on Orange County District Attorney Todd Spitzer to investigate allegations that an unknown member on the agencies’ Boards of Directors influenced the approval of a contract award to a firm in which he or she had a personal stake.
The council voted unanimously in favor of sending a letter to Spitzer’s office, asking that he launch an investigation in the conflict-of-interest allegation that was first raised in an Orange County Grand Jury report on the TCA this past June.
In the report, which had found that the TCA had continued to place itself in road planning projects that likely were outside of its legislative purview, the Grand Jury said an unnamed board director “acted favorably on a TCA contract with a firm where he/she had a personal or political interest.”
In an email to the San Clemente Times, the TCA responded to the council’s vote by stating “the discussion and vote to send a letter to the District Attorney based on unsubstantiated, non-specific statement from a Grand Jury report fraught with misinformation is also unfortunate.”
“The Grand Jury report provided no facts regarding the alleged event or even any indication as to whom it was referencing,” the TCA continued. “This act appears to be part of the City’s continued effort to manufacture public antagonism towards TCA and its Board of Directors.”
The motion from Councilmember Gene James, a director on the San Joaquin Hills TCA board, also included a direction to the city that a similar letter seeking an investigation be sent to the U.S. attorney of the Central District of California and the state’s attorney general, if Spitzer doesn’t reply within two weeks.
While backing James’ motion, Councilmember Kathy Ward, the city’s representative on the Foothill Eastern TCA (F/ETCA) board, noted that she had recently asked her fellow TCA directors if they would consider hiring an investigator to review the conflict-of-interest claim.
Ward explained to SC Times on Wednesday, Sept. 2, that the board hasn’t taken up her question of an investigation that she had posed during Director Comments at the end of a meeting.
“I am requesting that investigation in writing to the CEO,” Ward said in an email.
Following discussion on the investigation, the council turned its attention to the TCA’s development impact fees, which the TCA collects from property owners of new developments built within the cities and unincorporated areas that benefit from the toll roads.
According to the Grand Jury report, between 1986 and Fiscal Year 2019, the TCA collected approximately $703.6 million in development impact fees.
DIFs, the TCA stated, “are paid by developers as agreed to by the County and member cities—including San Clemente when the Agencies were formed. These fees are applied to the costs incurred in constructing and improving the roads, which have undoubtedly benefitted the residents and businesses of the member agencies, including San Clemente’s.”
The city, however, is arguing that, despite paying approximately $46 million over the life of the fees, San Clemente residents and developers have not benefited from a proposed portion of the 241 Toll Road that was never completed.
In 2016, the TCA abandoned plans to complete the southern alignment of the 241 to Interstate-5—a connection referred to as the “green alignment.” The initial alignment was contested by environmental groups that eventually led to a settlement agreement establishing an “avoidance area” that included the San Mateo Watershed and Trestles south of San Clemente.
That agreement eventually prompted the TCA to consider alternatives to connect the 241 to I-5, including proposed—and contentious—routes to have the toll road cut through portions of San Clemente.
However, this past March, the TCA directors unanimously voted in favor of pursuing an untolled, arterial route from the 241 to the San Clemente city limit, officially abandoning the 241-extension plans
The “TCA has built only a portion of the Foothill corridor, yet it continues to collect the DIFs to fund the entirety of it,” the city stated in a staff report to the council. It went on to note: “With TCA’s elimination of a major segment of SR-241 in 2016, San Clemente’s share of DIFs no longer corresponds to its share of infrastructure improvements.”
Councilors on Tuesday voted, 3-1, in favor of notifying the TCA that it has breached its Joint Powers Authority agreement with the city by eliminating the road alignment in “San Clemente’s area of benefit without even studying commensurate reduction in San Clemente DIFs.”
The council’s vote also authorized the city to solicit a consultant to help calculate a fair share reduction in San Clemente’s DIFs, as well as initiate an amendment to San Clemente’s TCA fee ordinance.
The city’s report stated that a challenge to the TCA could serve as a prerequisite in getting refunds for San Clemente residents who paid the fees to the TCA.
Tuesday’s vote also allows the council to consider taking legal action that seeks a judicial decree in finding the TCA in breach of the JPA. Such a decision to go that route could cost the city about $100,000 in legal fees.
Acting Mayor Laura Ferguson, the sole no vote on challenging the TCA’s fees, expressed concern over taking the litigation route, noting the city doesn’t have the funds in its war chest for such a legal expense.
City Attorney Scott Smith agreed that the city didn’t have the money, but he explained that the approval Tuesday night only is intended for the council to consider the legal option but not necessarily move forward with it.
“The action would be brought when the council thought that it had the funds to do that,” Smith said.
Editor’s Note: This story was updated to include additional comments from Councilmember Kathy Ward.
Shawn Raymundo is the city editor for the San Clemente Times. He graduated from Arizona State University with a bachelor’s degree in Global Studies. Before joining Picket Fence Media, he worked as the government accountability reporter for the Pacific Daily News in the U.S. territory of Guam. Follow him on Twitter @ShawnzyTsunami and follow San Clemente Times @SCTimesNews.