Was the Tulare City Council’s recent vote to extend a $9m line of credit to the Tulare Local Healthcare District legal?
Mario Zamora, Tulare’s interim city attorney, says yes. Marguerite Melo, an attorney who has previously taken on the City of Tulare, says no.
Tulare City Councilman Carlton Jones says his colleagues on the city council broke the law, and has posted on Facebook encouraging community members to file complaints with the California Fair Political Practices Commission (FPPC) which handles conflicts of interest in California politics.
David Alavezos, an Assistant Tulare County District Attorney, says that the district attorney’s office hasn’t received any submissions regarding the vote, so the office can’t comment.
Why the controversy?
Councilmen Greg Nunley and Dennis Mederos have previously recused themselves from discussions regarding the line of credit. Nunley is purchasing land from the district, and Mederos has previously represented members of the district’s board; Mederos also owns property adjacent to the hospital.
That left Councilmembers Jose Sigala, Terry Sayre, and Jones to discuss the line of credit.
But Jones was unable to attend previous meetings in which the line of credit was discussed — and he minced no words when speaking about the proposal on social media, stating that even when he was able to attend the council’s meetings again, he would recuse himself from voting on the measure.
His prior absences already ensured the council never had a quorum, and couldn’t approve the measure; any recusals would also ensure a quorum would never be reached. The city wouldn’t be able to loan any money to the hospital district, whose only alternatives would be three high-interest lenders, according to court documents.
“I’m here for the people. I’m protecting the people. I’m not going to let you rob the city. I suggest you explore other options. Either take the other loan or approach the county. Or better yet stop trying to tax people without a vote,” Jones wrote in a comment to Tulare Local Healthcare District board member Xavier Avila on Facebook.
In another post, Jones has said he believes any loan to the district would be a bad investment — stating that the district “couldn’t scare the banks to make a horrible investment” and that Avila would “not scare” him.
On February 12, the council met to discuss the line of credit again; and, again, Jones’ seat was empty.
This time, Mederos decided not to recuse himself: he invoked the “rule of necessity,” which he stated allowed a public officer to exercise the “essential duties of a council member’s office, despite a conflict of interest, where it is necessary to proceed when there is no alternative, reasonable way to do otherwise.”
In a statement to explain his decision, Mederos stated that Jones’ lack of attendance — and alleged bargaining for his attendance, as Mederos claimed Jones would only attend a meeting if the item were agendized as a resolution — was causing a “paralysis of government on this issue.”
Rule of Necessity, conflicts, and more
A guide published by the California League of Cities, backed by references to California laws and FPPC advice letters, states the Rule of Necessity isn’t allowed when the problem is simple obstructionism or the failure of a member to attend a meeting.
“There are instances in this state where legislative bodies have been deadlocked two to two (2-2) for months, with the fifth vote disqualified because of conflict of interest,” the guide reads.
Even if the Rule of Necessity allowed Mederos to stay on the dais, the guide states that Nunley and Mederos should have been chosen at random — such as by flipping a coin, throwing dice, or another impartial method of selection.
“Whatever method is used, all disqualified officials must participate in the random selection and all must have an equal likelihood of being chosen,” the guide states.
Another section of the guide references Government Code 36936, which states that “Resolutions, orders for the payment of money, and all ordinances require a recorded majority vote of the total membership of the city council.”
Jones has pointed to both sections of the guide on social media to bolster his argument that the council’s actions are illegal.
Conflicting legal viewpoints
Zamora told the Voice that, in his opinion, the vote was legal on multiple grounds.
Regarding Government Code 36936, he stated that a line of credit was not a “payment of money,” an issue that Zamora claims was researched weeks before the vote.
“The legal definition of “payment” is “Performance of an obligation by the delivery of money or some other valuable thing accepted in partial or full discharge of the obligation.” An obligation means that there is a requirement to do something – essentially that there is some type of debt being satisfied. In this case, in order for the loan to be considered an “payment of money”, the City must have been obligated to provide the loan for an existing debt. There was not an existing debt, and therefore there is no “payment of money” and therefore passage by 3 votes was not required, just a majority of votes cast,” Zamora wrote.
“One can say we are just parsing words, but in the legal world, we have something called the rules of statutory construction. That gives us guidance as to how we interpret language in a statute such as Gov. Code 36936 when there may be a dispute. The important rules of statutory construction here are that 1) words are to be given their plain meaning, 2) we don’t insert, delete, or ignore words or out of a statute, and 3) we must assume that every word was chosen by the legislature and they knew what they were doing,” Zamora added. “These legal requirements are important because the legislature used the words ‘payment of money’ and not something else so we must assume they meant exactly that. They could have said that any ‘expenditure of money’ requires 3 votes (and which would cover this situation), but they didn’t. So in my opinion, Gov Code 36936 simply doesn’t apply. Because 36936 doesn’t apply, as long as you have a quorum, then majority rules.”
He added that any concerns over the Rule of Necessity were mooted, because he doesn’t believe Mederos was ever conflicted — simply overcautious.
Any past work doesn’t constitute a conflict, Zamora said, because Mederos would have no current financial interest in the transaction, leaving the subject of his property adjacent to the hospital.
Different sections of political practice regulations either do not apply or allow Mederos to take part in the decision, Zamora said, leading up to the question of whether or not the decision would cause a financial effect on Mederos’ property that would be a “realistic possibility and more than hypothetical or theoretical.”
Because the property would only be affected in a hypothetical situation; and, even if there is more than a hypothetical impact, Zamora states Mederos would still be able to take part in the discussions and the vote.
“And, finally, this would be one of those situations where there would be an exception to the conflict. The FPPC rules allow an exception even if a conflict that was 1) foreseeable and 2) material, if the decision applies to the public generally,” Zamora writes.
“The FPPC materials specifically state, ‘Even if an official otherwise has a conflict of interest, the official is not disqualified from the participating in the decision if the “public generally” exception applies. This public generally exception applies when the financial effect on a public official or the official’s interests is indistinguishable from its effect on the public generally.’” My opinion is that it would apply in this circumstance,” he added.
Visalia attorney Marguerite Melo, of the Melo & Sarsfield law firm, gave her point of view on the situation to the Voice.
Melo was employed for 11 years with the Tulare County District Attorney’s office before transferring to the Kern County District Attorney’s office, and was previously appointed to the California Office of the Inspector General’s office as a Special Assistant Inspector General in 2007.
(Note: The office of Melo & Sarsfield has also represented the Valley Voice’s owners in other litigation.)
Melo stated she believed the vote was illegal due to Mederos’ conflicts, and stated the “Rule of Necessity” should never have been invoked — because providing the district with a loan isn’t a necessary act at all.
“What is an emergency for TRMC is not an emergency for the City. I mean, I like the option of having a hospital when I’m in Tulare, but when we’re talking about legal workings and transfer of taxpayer money, you have to take caution with it,” she said. “And creating what they say is an emergency just isn’t there — but then, they said this isn’t really about being a necessity, this is about him not actually having a conflict.”
While she liked the council, she said “what they’re doing, and what they did, was absolutely illegal,” while Jones’ actions to essentially filibuster the council’s votes was legal.
That hinges on Mederos’ conflicts, she said.
“For him [an attorney] to recuse himself holds a lot more weight than a board member who has no legal training,” she said. “For me, for Zamora to make a judgement call when an attorney has already made that judgement — is problematic at least.”
“It’s the fact that [Mederos] has specialized knowledge to determine whether or not he should have recused himself,” she added. “If it’s questionable, why don’t we go ahead with what Mederos believes it is?”
Next steps unclear
While Jones has solicited complaints on Facebook to the California Fair Political Practices Commission, representatives with the commission were unable to confirm by press time whether any complaints were received.
Zamora, however, suggests that Jones show up to the table if he’s got an issue with the way the vote was conducted.
“If Mr. Jones thinks that there is still an issue, the easiest way to remedy that is to agendize it so Mr. Jones can show up and we can cure any deficiencies he believes exist,” Zamora wrote to the Voice. “Perhaps he will so request at the next meeting. I don’t think there is any issue given my prior response, but in any event, the outcome would be the same since all that is required is a 2-1 vote.”
A request for comment was left at Mederos’ office, but was not returned by publication time.