City Of Oakland's Dan Lindheim and Walter Cohen Named In Lawsuit By Oakland Taxpayer

Oakland City Hall

Gwillym Martin's an Oakland Resident and taxpayer who first found this blogger on Facebook and sent via email a copy of a complaint filed against the City of Oakland. Now people file lawsuits all the time, and at times for silly reasons; not in this case. But any media person who seeks to pick up on this story should make sure they understand it first. Read on.

Martin filed a lawsuit in Alameda County Superior Court that specifically names City Administrator Dan Lindheim, CEDA (Community and Economic Development Agency) Director Walter Cohen, Building Services Director Ray Derania, and City Controller Osborne Solitei, and because "revenues generated from permit and code enforcement activities have been misappropriated for purposes other than those permitted by law and seeks an injunction to prevent further misuse of funds," as the email reads.

Looking beyond the email and at the documents, Gwillym Martin's simple and controverial point is that the City of Oakland's using revenue collected under California Heath and Safety Code Section 17951. Section 17951 is a long read; Martin's focus is what's called "subdivision (c)" which reads:

(c) The amount of the fees prescribed pursuant to subdivisions (a) and (b) shall not exceed the amount reasonably required to administer or process these permits, certificates, or other forms or documents, or to defray the costs of enforcement required by this part to be carried out by local enforcement agencies, and shall not be levied for general revenue purposes. The fees shall be imposed pursuant to Section 66016 of the Government Code.

Now, I took a cyber walk over to look at 66016 of the California Government Code, just in case, and came upon another long read - this one:

(a) Prior to levying a new fee or service charge, or prior to approving an increase in an existing fee or service charge, a local agency shall hold at least one open and public meeting, at which oral or written presentations can be made, as part of a regularly scheduled meeting.

So, Martin's in the clear so far; that only says the City of Oakland has to let you, the Oakland Taxpayer, know about these new fees. Marin's lawsuit does not call for an investigation of the City's compliance with that code, just 17951.

What Gwillym Martin found was the City of Oakland was allegedly using money from permits, like zoning permits, and putting it into the Oakland General Fund and giving some of it to The Oakland Unified School District.

There's the rub: part of it was used to help education in Oakland. A good cause. But Martin does not dispute the need for education money, he just doesn't want the City to violate state law in getting money for education or for general fund use.

He claims this video by Echa Schnider of A Better Oakland, has Economic Development Director Walter Cohen admitting such misuse of funds. Trouble is, the video's 25 minutes long and was not made for the purpose of "outing" Walter Cohen; Martin wants you to start at 20:00 then go to 25:00:


Oakland Budget: CEDA from V Smoothe on Vimeo.

A Complete Case

His case includes detailed spreadsheets to back his claim. My only question is if there's anything in the Oakland City Charter that may block this lawsuit. Article 1, Section 106 of the Oakland City Charter reads as follows:

Article 1, Section 106. General Powers. The City shall have the right and power to make and enforce all laws and regulations in respect to municipal affairs, subject only to the restrictions and limitations provided in this Charter; provided, that nothing herein shall be construed to prevent or restrict the City from exercising or consenting to, and the City is hereby authorized to exercise, any and all the rights, powers and privileges heretofore or hereafter granted or prescribed by the general laws of the State including those specifically applicable to general law cities; provided, also, that where the general laws of the State provide a procedure for the carrying out and the enforcement of any rights or powers belonging to the City, said procedure shall control and be followed unless a different procedure shall have been provided in the Charter or by ordinance.

It is the intention of the people in adopting this section to take advantage of the provisions of Section 6 of Article XI of the Constitution of the State of California giving cities Home Rule as to municipal affairs.

Note: "unless a different procedure shall have been provided in the Charter or by ordinance." The question is, does the City of Oakland have a provision in place that specifically allows money to be used from fees in a way that goes beyond the limits of Section 17951?

After looking at the Oakland City Charter, there's nothing that allows the City to, of Mr. Martin's findings are understood, do what it has been doing. In other words, the City's own Charter does not have language that allows the City to expressly go beyond Cal HS Code Section 17951.

What does Martin seek?  An injunction to stop the practice, and payment of lawyer's fees.  What the City has to do if it wants to maintain revenue flexibility, is alter the Charter to allow for it and take advantage of "home rule" status.  I know from having worked for the City of Oakland and in CEDA, that in the past such revenue transfers have been at least considered without consulting legal authority.

Stay tuned for more on this.