RSM Facing Huge Financial Jeopardy Over District Voting
Introduction
April 2024 was a big event for the residents of Rancho Santa Margarita. They were able to show enough presence and will to force Mayor Carol Gamble, and Councilman Tony Beall to retreat from their objective to shut down the Boys & Girls Club to put in a museum to themselves. Both of them have been found guilty of campaign finance violations, which you can read about here and here. In addition, Tony Beall has two recent IRS liens against his home for nearly $180,000 for unpaid taxes. That’s a lot of income not to pay taxes on. That information is to set the stage for who we are dealing with because, at the same time, the city is going through a lawsuit to switch to district voting.
It’s important to note that Tony Beall, through his strategic manipulation of district boundaries, executed a form of gerrymandering that would impress even a circus contortionist. This has created several problems. The first is a clear violation of the FAIR MAPS Act. The second is that the creation of an “at-large” mayor to allow Tony Beall to run this year doesn’t satisfy the terms of the lawsuit that forced the districts, which opens the city up to a second lawsuit. The third is what we’re going to talk about today.
The Meat
During the council meeting regarding the Boys & Girls Club, Tony Beall ranted extensively at the residents and some fellow council members. He tried to couch this in terms of fiscal responsibility, although this line item expense had not been an issue for him for the previous 12 years. He was suddenly very concerned about this expense while also trying to claim the museum would really cost half of what the staff projected. We all know government projects, odds are it would be double. Tony might be more sensitive to costs now with his IRS problems. How does this tie together?
Well, back to the district voting. In these cases, the plaintiff’s lawyer fees are capped at about $30,000. I think that’s to help prevent people from taking advantage of it and just trying to collect lawyer fees. RSM agreed to the district voting and passed it, which means they agreed to the fees. For some reason, they are playing a game with paying the fees.
It’s notable that city attorney Greg Simonian is the one who is orchestrating the failure to pay. It’s also notable that he is the city attorney for Laguna Hills as well, and has advised them not to go to district voting and to fight it. No city or agency has ever won this fight, with some cities paying millions in fees to fight it. What does Greg get out of this? He gets more billable hours. It hardly matters to him one way or the other, he gets paid for the extra work. This is actually so egregious that the ACLU has gotten involved.
The city knows they owe the money, but instead of paying it, they are having additional meetings with the city attorney on how not to pay it, helping him boost his hours. So, how does that impact RSM financially? My spies have told me that the plaintiff has engaged council Carlos Perez to pursue this. Carlos has a significant success record in this regard. You can see this judgment from June 2023 where he won nearly a quarter million dollars for this exact same situation.
Summary
Instead of being responsible stewards of our money, the city is likely going to have to pay an additional $200,000. Why isn’t Tony Beall worried about this fiscal responsibility? Our city is already going to run out of money in the next 6 or 7 years if nothing changes. Our reserves are down about 20% from just a few years ago. The federal COVID funds helped top things up, but that doesn’t change the fundamental calculus I’ll cover in another article. What the heck is wrong with our city council that they let things get so out of control? The real things they should care about, not the ribbon cuttings and awards and other pomp and ceremony. These are not serious people. Vote them out!
