Joe Nelson and Sandra Emerson, Staff Writers
Posted: 02/10/2013 03:34:01 PM PST
Updated: 02/10/2013 10:57:13 PM PST
San Bernardino County’s lawsuit against Upland and two transportation agencies in which the county seeks to recoup a portion of a $102 million legal settlement could force Upland into bankruptcy court, City Manager Stephen Dunn said.
Dunn said the city has spent roughly $6 million from its general fund over the past nine years to defend itself in the litigation – money the city desperately needed. As a result, the city’s general fund reserves have dipped below $1 million in the last year, he said.
“Without a doubt, if we didn’t have this case, if the court had let us out of it or if it got resolved early on, we would be pretty well financially,” Dunn said.
The county filed its lawsuit against Upland, Caltrans and San Bernardino Associated Governments – the county’s transportation planning agency also known as SanBAG – in November 2004 in an effort to show they were partly liable for damages Rancho Cucamonga developer Jeff Burum claimed the county flood-control district caused to his 434-acre residential and retail development in Upland.
In November 2006, the county settled with the developer’s investor group, Colonies Partners LP, for $102 million. The settlement is now the focus of a broad conspiracy and bribery case in which prosecutors allege bribes were used to elicit the settlement in Colonies’ favor.
In March 2011, former Board of Supervisors Chairman Bill Postmus pleaded guilty to a conflict- of-interest charge and other felonies as part of a plea agreement. He admitted taking a bribe from Burum in exchange for his vote approving the settlement.
Burum denies any wrongdoing.
On Tuesday, San Diego Superior Court Judge Ronald Prager dismissed all of San Bernardino County’s damages claims, citing Postmus’ conviction, which he said was a clear violation of a state conflict-of-interest statute that forbids public officials from having a financial interest in contracts they make in their official capacity.
Prager based his decision on Postmus’ confession, the former supervisor’s subsequent grand jury testimony, and the county’s own admission in a news release after Postmus’ conviction that he broke the law when he voted to approve the settlement.
Prager did not go easy on the county in open court, calling the settlement “unconscionable, unlawful and sordid” and “the worst of the worst.” He questioned the county’s continued push to collect from the defendants on a legal settlement he said was voided in 2011 with Postmus’ guilty plea.
“It just seems to me fundamentally wrong that we’re going to perpetuate this case,” Prager said during proceedings.
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