Russo Inherits Disastrous Alameda Lawsuits

Apparently former Oakland City Attorney John Russo loves a challenge. After making many fond memories with Oakland Mayor Jean Quan (read: sarcastic), it looks as if Russo will leave the elected city attorney position for the city manager position in equally-kooky Alameda. 

Russo will inherit about half a dozen lawsuits against the city and a history of suspicious behavior from elected and appointed officials. Still, I’m hopeful that this change will help turn things around in Alameda. With fresh blood in the council, a competent mayor and a new city manager, Alameda just may have a chance to straighten things out.

Not to continually reference the impending doom of the lawsuits against the city, but Alameda has racked up quite a suite of suits:

-          Three lawsuits filed by Suncal that could amount to over $100 million dollars

-          One lawsuit filed by previous interim city manager Ann Marie Gallant

-          One lawsuit filed by previous city attorney Teresa Highsmith

-          Potential lawsuit from former Fire Chief David Kapler

A recent Island of Alameda article by Michele Ellson revealed the city’s pressing financial woes: “Alameda Facing Millions in Budget Deficits; Treasurer Says City Heading Toward Bankruptcy.” According to this article:

Alameda is facing a $6.2 million general fund budget shortfall next year and growing deficits for each of the four years that follow it; without major cuts or more money, the city will exhaust its fund balance before the end of the 2013-2014 fiscal year, the forecast showed.

What’s more, the city must pay an additional $860,000 for medical services, $622,000 in fuel and supply costs, all while they’re losing $710,000 in sales tax and $900,000 in costs from the golf complex handover.

These lawsuits filed against the city could be the straw that breaks the camel’s back. The legal costs alone would be two (well-paid) full time jobs. What exactly is all of this costing the city per month? As it stands now, there’s not a dime to spare in the City of Alameda’s budget. Are we closing down a school or cutting teachers’ salaries to pay city lawyers?

Not to mention the cost of settling these lawsuits. What if a plaintiff wins a suit against the city? Can Alameda afford to pay the settlement without declaring bankruptcy? According to the City Treasurer, the answer is no.

City of Alameda Likely to Lose Lawsuit

It seems the City of Alameda is playing a cat and mouse game with SCC Alameda, the previous developer of Alameda Point. SCC Alameda is suing the City for violation of the California Public Records Act (PRA), and it’s looking like the City will lose this lawsuit.

After reviewing the complaint that SCC Alameda filed against the city, it is clear that city councilmembers and city staff have not yet produced any of the emails requested by SCC Alameda pertaining to Alameda Point development, which is in violation of the PRA.

The City seems to keep making excuses, delaying response or simply not responding to SCC Alameda public records requests. The bottom line: this is against the law. The city has been caught red-handed not complying with public information requests, and this poor leadership by the city will cost taxpayers millions.

Interestingly enough, a fellow blogger Lauren Do also made a public records request. In addition to SCC Alameda, she was also denied the requested records, but the City Clerk gave her a bit more information as to why her request was denied.

Basically the City has two email systems. One that they actually use for day to day communications (the internal server called Groupwise) and one that they don’t (the server used for community communication called Alameda Access).

When the city clerk did a 6-month search in the Alameda Access server, there were ZERO emails from any member of the City Council, including the Mayor and City Manager Ann Marie Gallant.

Here’s where it gets sneaky: The Groupwise system, where the City Manager and City Councilmembers actually send emails, is apparently exempt from public records requests. To quote the City Clerk: “because the City of Alameda does not have the server space to retain the emails [and] … are systematically and automatically purged by IT every 30 days; therefore, they are considered “drafts” and are exempt from disclosure pursuant to Govt. Code Section 6254(a).” This is ridiculous! I’ve got a solution for you: use Gmail. You’ll have all the server space you need. Although Gallant did not set up the system that she abused, she is the person responsible for managing the email retention system (per depositions from City Clerk Lara Weisiger). Certainly this 30-day purge of all city emails is not a very good “retention system.”

At the end of the day, NEITHER SCC Alameda Nor Lauren Do HAVE received one REQUESTED email from any of the Councilmembers or the City Manager Ann Marie Gallant. This will not hold up in court.

Although this case is important in its own right, it could have a significant impact on the $100 million federal suit against the City. If the judge rules that records (which are being disputed in the PRA suit) essential to the federal suit were destroyed, then the city would likely lose, setting the city back $100 million. As a councilmember, I’d rather cough up the emails then cough up the dough to SCC Alameda… That amount of money would put Alameda into financial crisis.

More Finger Pointing in Alameda… Who’s Got the Right Direction?

It has been quite a rollercoaster in Alameda over the past year. Councilmembers were accused of wrong doing, city officials are being placed on administrative leave, elections turned nasty, developers are suing the City for breach of contract and Brown Act violations are running rampant.

Who or what is the source of all this controversy? I have my own thoughts about who is the source of the controversy, and for me they were confirmed by the recent lawsuit filed by City Manager Gallant and damage claim from City Attorney Highsmith.

Ann Marie Gallant has turned around and slapped the city with a ridiculous lawsuit; all while being on paid leave. There’s so much finger pointing and political puffery going on that it’s hard to make out what’s what. So while Gallant is pointing the finger at the City, I’m going to take a look at another lawsuit, filed by Alameda Point developer Suncal that is pointing the finger at Gallant.

Not surprisingly, Suncal has focused their lawsuit against the City of Alameda on Ann Marie Gallant and her manipulative tactics that apparently have been in effect throughout her career (see my previous entry, “Gallant at it Again in Alameda” for a timeline). However, Gallant has covered her tracks well. The lawsuit alleges fraud on the part of Gallant, but cannot prove fraudulent behavior due to the fact that Gallant deleted her emails and (insert my opinion here) most likely held closed door meetings discussing plans against the hired developer, so Gallant could lead Alameda Point development.

So Gallant is pointing the finger at the City, and Suncal is pointing the finger at Gallant. I’ll base my decision on her track record, which is a minefield of lawsuits, layoffs and resignations. I’m pointing the finger at Gallant.

Gallant at it Again in Alameda

Not surprisingly, Anne Marie Gallant is suing the City of Alameda at the close of her contract as City Manager. I say this because her abysmal employment record shows she has done so time and again. Take a look:

• 1997 – 2000 – Employed at L.A. Redevelopment Agency; Appraisal controversy and suspension over expense reports; Gallant agreed to resign
• 2000 – 2003 – Employed as General Manager of Development Services at the City of Carson; subpoenaed by the LA County Grand Jury involving contract bidding; she was terminated by the City of Carson and sued the City for $215,000
• 2004 – Employed as City Manager of the City of Gustine, CA; less than one year later, she began interviewing for her next position
• 2005 – Employed as City Manager of King City
• 2005 – Five months later, she was announced as Candidate A for City Manager of Desert Hot Springs
• 2006 - 2007 – Employed as City Manager for Desert Hot Springs; four months after her official position took effect, she resigned stating that she was “involuntarily terminated” in her public settlement agreement and took a severance pay of $119,000
• 2008 – Hired as Finance Director of Alameda
• 2009 – Hired as City Manager of Alameda
• 2011 –placed on administrative leave from a City Council vote on Dec 28, 2010; City Manager 2-year contract expires in April 2011; currently suing the City of Alameda claiming that she was “terminated” and demanding “an amount to be announced, but more than $25,000 according to filings from last Thursday,” according to John Knox White


Stop, Drop and Roll covered her lawsuit claims. I find them baffling. Currently, she is sitting at home being paid the full extent of her contract, which according to the Alameda Sun, is roughly $20,833 A MONTH (based on her $250,000 annual salary). I’m interested to see where her “lost wages” are coming from…

Also, I’d like to see how her “emotional distress damages, attorneys fees and costs” compare to Lena Tam’s, the City Councilmember who she wrongly accused of influencing elections. Tam was completely exonerated by the Alameda DA (Gallant’s attorney then tried to use a Facebook friend status to link Tam with the Alameda DA).

I only hope that the new City Manager doesn’t carry on Gallant’s toxic behavior. I’m sure the current City Council will thoroughly review all references and employment histories of current City Manager applicants to ensure that he or she does not.

Alameda Point: Affordable Housing Comparison

The city recently agreed, in the wake of Gov. Jerry Brown’s proposal to eliminate redevelopment agencies and cut down the state’s $25 billion deficit, to commit $40 million for Alameda Point upgrades.


It is commendable that the city is taking a leadership role to provide adequate affordable housing for Alameda Point, but the previous developer’s proposed plan had 928 affordable housing units and 157 adaptive re-use units. How much will $40 million get Alameda Point? Will it be equal or lesser than the previous plan?

The previous plan by Peter Calthorpe allocated 928 affordable housing units and 157 adaptive re-use units, and without a developer or a plan, when will any affordable housing be built? The families in need of housing can’t wait another seven years for a shovel ready plan to be put into effect. How long will it take to get more affordable housing in Alameda?

The previous plan was a big victory for affordable housing advocates, and they are seeing this victory disappear. Alameda Point, currently the home to hundreds of relocated veterans and affordable housing units, was the solution for affordable housing and once more it’s becoming part of the problem.

Affordable housing can mean multi-family dwellings, which, of course, will be in violation of Measure A. But if we’re trying to get the most bang for our buck and the most homes for our veterans and our low income families, “violating” Measure A is the solution. I’d say this is something for consideration by our city leaders.

Is Alameda Heading Towards Municipal Bankruptcy?

On January 9, the Los Angeles Times covered a breach-of-contract appellate court decision in Mammoth Lakes, California that appears remarkably similar to the Alameda Point lawsuit. In the Mammoth Lakes contract, the developer agreed to make improvements to the airport in exchange for rights to develop a $400 million hotel next to the airport in addition to an option to buy the land. After the developer made the improvements to the airport, the city reneged on the hotel deal because the hotel placement would obstruct the airport’s ability to accommodate Boeing 757 passenger jets.

The small ski-town of only 7,500 residents lost its legal battle with a three-judge panel’s unanimous decision in favor of the developer. What’s more, the 66-page ruling scolded the town for backing out of the deal.

The consequences of this decision are ominous for the town of Mammoth Lakes, which may declare bankruptcy, and bring up potential consequences for the City of Alameda in the Suncal Alameda Point lawsuit. Legal costs are sky-high, and to pay for the lawsuit and a potentially negative court ruling, the city may have to take dire measures which will have a negative economic impact on the city.

So, how can we avoid this in Alameda? What can our councilmembers do to avoid a potential bankruptcy? At this point, Alameda is most likely paying thousands in legal fees that might be avoidable.

Read the Mammoth Lakes story here.
Comments welcome.

A New Chapter in Alameda Point Redevelopment (Fingers Crossed)

A boisterous crowd cheered in Gilmore, Bonta, Tam and Johnson at Tuesday night’s Alameda City Council meeting. This exciting new chapter also marked the end of another chapter: City Attorney Teresa Highsmith’s tenure as City Attorney. However, John Knox white made an astute observation. Highsmith is transitioning, some might say too quickly, to the City Attorney of Barstow. But surprise, surprise, guess who handles the City of Barstow’s legal issues? Colontuono and Levin, the same firm City Manager Gallant hired to prosecute Lena Tam. Good riddance to closed door meetings and back room deals.


It is refreshing to see Gilmore, Bonta, Tam, Johnson start the year off fresh. There seems to be quite a lot of momentum behind these Alameda city councilmembers, which is a great sign. Doug deHaan continues his term and, in a SF Gate interview, recently addressed Alameda Point redevelopment, which will be the big test for the new council. Interestingly enough he admitted that housing is needed to generate revenue for the city of restore Alameda Point. Thank goodness. Let’s just be out with it and explain to the public WHY this is necessary. Time and time again Alameda has tried to push for parks, open space and commercial space only. Let’s integrate the residential development and create a sustainable, walkable community which can fund its own parks and open space.

The current solution is an “aggressive asset management policy for the leases at the Alameda Point to increase revenue.” Again, we are shooting ourselves in the foot with this strategy. Selling off small pieces for short term leases erodes master planning, sustainable development and transit oriented development opportunities.

Alameda Point needs a big picture, master planned solution, not a short term band aid like “aggressive” short term leases.