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HomeMy WebLinkAboutAgenda Packet 112508 Addition: Council Report - Mike Brennler • i oAtascadero Office of the City Clerk TO City Council FROM Marcia McClure Torgerson City Clerk/Assistant to the City Manager SUBJECT Additional Information Provided to City Council after Agenda Packet Distribution DATE 11/24/08 Attached is additional information that was provided after the City Council Agenda Packets were distributed This information pertains to Agenda Item Number Council Announcements & Reports Description Report provided by Mayor Mike Brennler City Council Meeting Date 11/25/08 A Review of the Allegations and the Report of Investigation against City of Atascadero Community Redevelopment Agency Deputy Director Martin Tracey November 20, 2008 Mike Brennler, Mayor City of Atascadero Table of Contents Introduction Page Review of Allegations and the Report of Investigation 1-5 Sampling from News Articles 6-7 Statements and Testimony in Support of Findings 8-25 Event Time Line 26-54 Exhibits A Memorandum dated February 15, 2005—Summary of the Condemnation Process. B Email from Marty Tracey to Wade McKinney dated March 22, 2005, 6.56 AM. Email reply from Wade McKinney dated March 22, 2005, 8:47 AM C Notice of Special Meeting October 31, 2005. D Memorandum to Marty Tracey from Wade McKinney dated November 9, 2005. Introduction For the past three years, the public account of Mr Tracey's interaction with the Gaughans, relative to their property located at 6040 and 6090 El Camino Real, has been primarily from the perspective of the 2005 City Council/Redevelopment Agency Board, City Manager Wade G McKinney, and others who suggested that Mr Tracey had acted independent of management directives. It was even suggested that Mr Tracey was a"rogue" employee. Mr McKinney suggested that Mr Tracey's phone message to the Gaughan was an example of a"confrontational style,"yet the Gaughans appear to have contradicted this assertion by indicating that Mr Tracey had always treated them courteously and professionally It is with gratitude to Martin J Tracey for providing access to the Report of Investigation conducted by Mr Scholar as well as other documents generated as a result of the subsequent court cases (Gaughan v City of Atascadero, et al. (Case No CV060925) and Martin Tracey v City of Atascadero, et al. (Case No CV 070917) These documents will allow the public additional perspective, related to the events which caused great turmoil and culminated in costly litigation. I will mention that although Mr Tracey was very cooperative in providing documents, some of my efforts in acquiring public documents through official City channels appear to have been delayed. Date: rA 200ti ike Brennler, Mayor City of Atascadero Review of Allegations and the Report of Investigation Review of the Allegations and the Report of Investigation against City of Atascadero Community Redevelopment Agency Deputy Director Martin Tracey The investigation into issues raised by the October 27, 2005 New Times article "Caught in the act"was conducted by Ronald J, Scholar who represented the law firm KRONIC, MOSKOVITZ, TIEDEMANN & GIRARD In a memorandum dated November 9, 2005, City Manager Wade McKinney indicated that Mr Scholar would be conducting an "independent" investigation, yet it is relevant to note that Mr Scholar was an attorney working for the same firm as former City Attorney, Patrick Enright who was privy to many of the issues discussed herein As part of Mr Scholar's investigation, Marcia Torgerson was interviewed the morning of November 18, 2005, Mr and Mrs Gaughan were interviewed the morning of November 18, 2005, Martin Tracey was interviewed on the afternoon of November 18, 2005 Wade McKinney was interviewed by telephone on November 29, 2005 Although Mr Tracey was accused of having misrepresented the Redevelopment Agency's position, none of the Redevelopment Agency Board Members appear to have been interviewed The Gaughans were interviewed together Generally, it is not the best practice to interview witnesses together The interview culminated in 59 pages of transcript with approximately 150 questions posed by Mr Scholar The audio recording of the interview was approximately 1 'h hours in length Mr Tracey's interview culminated in 46 pages of transcript with approximately 150 questions posed by Mr Scholar The audio recording of the interview was approximately 1 '/z hours in length Mr McKinney's interview was conducted by telephone and culminated in 5 pages of transcript with approximately 30 questions posed by Mr Scholar The audio recording of the interview was approximately 10 minutes in length Based on the nature of the allegations and Mr McKinney's supervisory relationship over Mr Tracey, the interview and questioning appears unusually abridged As noted in a preceding paragraph, it does not appear that any of Redevelopment Agency Board Members were interviewed and this is problematic, considering that Mr Tracey was accused of misrepresenting the 1 Agency's position (Allegation Four) and having made inappropriate remarks about the City Council/Agency Board (Allegation Five) According to the Report of Investigation, Mr Tracey was accused of the following 1 Mr Tracey's telephone call and subsequent message to the Gaughans was inappropriate, 2 Mr Tracey threatened the Gaughans in his voice message to them, 3 Mr Tracey intentionally misrepresented the Agency's position with respect to the Gaughan Property by leaving a voice mail message for the Gaughans stating that the Agency " has directed staff to move forward with an Eminent domain process," 4 Mr Tracey negligently misrepresented the Agency's position with respect to the Gaughan Property by leaving a voicemail message for the Gaughans stating that the Agency " has directed staff to move forward with an Eminent domain process," 5 Mr Tracey made inappropriate remarks about the City Council/Agency Board in his voice message to the Gaughans, 6 Mr Tracey was untruthful in his denials that he did not leave a message for the Gaughans as was stated in the New Times article, 7 Mr Tracey's conduct with the photographer and reporter from the New Times was inappropriate or unprofessional, and, 8 Mr Tracey's discussions with Damian Chiapella about the Gaughan Property were inappropriate Mr Scholar's analysis of the allegations found no evidence that the phone message was inappropriate or that Mr Tracey had threatened the Gaughans Mr Scholar's analysis indicated that Mr Tracey had not intentionally misrepresented the Agency's position relative to the Gaughans' property The analysis also indicated that Mr Tracey had not lied nor were his statements to Mr Chiapella inappropriate Mr Scholar did find some fault related to the allegations, specifically, Mr Tracey negligently misrepresented the Agency's position with respect to the Gaughan Property by leaving a voicemail message for the Gaughans 2 stating that the Agency " has directed staff to move forward with an eminent domain process," Mr Tracey made inappropriate remarks, although characterized as "inadvertent," about the City Council/Agency Board in his voice message to the Gaughans, and, Mr Tracey's conduct with the photographer and reporter from the New Times was inappropriate Subsequent to the closed session meeting held on October 31, 2005, Mr Tracey was place on administrative leave On December 21, 2005, Mr Tracey was issued a Notice of Intended Disciplinary Action On January 20, 2006, Tracey received the Notice of Discipline and was place on two weeks suspension without pay and demoted in job tile and pay In response to this discipline, on January 27, 2006 Mr Tracey requested a public hearing pursuant to City of Atascadero Personnel Systems Rules On June 1, 2006, Tracey was unilaterally reinstated to his former position as Deputy Executive Director of the Redevelopment Agency and his lost pay was reinstated On May 31, 2006 a Letter of Written Reprimand was issued by Wade McKinney Mr Tracey responded to Mr McKinney's action on June 6, 2006 in form of a letter that set forth reasons why Mr Tracey believes the findings of wrongdoing are without merit and the discipline unwarranted According to press reports and testimony specified in the Report of Investigation, Mr Tracey had requested to be told what he had been accused of having done wrong During the interview with Mr Scholar, Mr Tracey indicated that he had not been advised of"what rule I've broken or what wrong I've committed " Mr Scholar indicated he could not reveal the information and he also used the words, "I can't tell you anything else other then that. That's part of the (sorry to use the word) process." Mr Tracey was first informed of the specific allegations when he received the Notice of Intent to Discipline and a copy of the Report of Investigation, on or about December 20, 2005 It is reasonable to assert, that since November 2005, City officials knew or should have known have known that Mr Tracey did not engage in any wrongdoing relative to the Gaughans, that he had consistently treated the Gaughans honestly, courteously and professionally, and that he was not a rogue employee as portrayed in news articles 3 On September 22, 2008, nearly three years after the October 31, 2005 closed session meeting that resulted in the demand that Mr Tracey resign, the City of Atascadero released a press release In part, the press release declared that the Gaughans had sent Mr Tracey a letter which stated that, "As a result of the investigation and discovery in the case filed in San Luis Obispo, Case No 060925 (Patrick Gaughan, et. al v The City of Atascadero et. al ), we now believe that you did not engage in any improper, fraudulent, or misleading conduct concerning us and our property In our dealings with you from April 2004 to the present, you were always courteous and professional " The press release also stated that, "in the City's investigation of this matter, it was found that Mr Tracey did not threaten the Gaughans or treat them inappropriately " The press release was silent as to the allegations that Mr Tracey had negligently misrepresented the Agency's position with respect to the Gaughan property, and that Mr Tracey made inappropriate remarks about the City council/Agency Board in his voice message to the Gaughans The press release was also silent as to the allegation that Mr Tracey's conduct with the reporter and photographer was inappropriate Having reviewed considerable documentation, including the Report of Investigation prepared by Ronald Scholar, and the depositions of Patrick Gaughan, Sue Gaughan, Wade McKinney and Martin Tracey, I make the following findings 1 Since April 2004 and at the direction of Wade McKinney, Mr Tracey had been dealing with the Gaughans regarding their property located at 6040 & 6090 EI Camino Real, Atascadero 2 Tracey was consistent in keeping Wade McKinney informed during the time he was dealing with the Gaughans. 3 Tracey was courteous and professional in his dealings with the Gaughans 4 Tracey attended the February 22, 2005 closed session meeting during which eminent domain was discussed, and resulted in direction to move forward with an eminent domainrp ocess relative to the Gaughans' property 4 5 The City/Agency was engaged in an eminent domainrp ocess relative to the Gaughans' property in 2005 6 Tracey was following the direction he was given by Wade McKinney and the City Council/Redevelopment Agency McKinney gave permission and was aware that Tracey would contact the Gaughans on February 23, 2005 in order to give them an update 7 Tracey was truthful in his phone message to the Gaughans on February 23, 2005 and that the phone message was not disparaging of the Redevelopment Agency or the City Council. 8 Tracey did not negligently or otherwise, misrepresent the Agency's position when leaving the Gaughans a voice message 9 Tracey did not make inappropriate remarks about the City Council/Agency Board in his voice message to the Gaughans 10 Given the circumstances, Mr Tracey's conduct with the New Times photographer was not inappropriate and there are no personnel rules that govern the conduct that was alleged 11 As indicated in the Atascadero News article dated November 16, 2005, City officials may have been in conflict with section 54957 of the Brown Act during the October 31, 2005 closed session meeting that resulted in Mr Tracey being asked to resign 12 A number of lawsuits resulted from the events described herein 13 Had the City Council/Redevelopment Agency Board made a timely acknowledgment that the City/Agency was engaged in an eminent domainrQ ocess relative to the Gaughans' property, much time, energy and the expenditure of tax dollars may have been avoided 14 It would be reasonable and appropriate for the 2005 City Council and Wade McKinney to offer Mr Tracey an apology 15 It would be reasonable and appropriate to expunge the disciplinary conclusions and actions, which were based on Scholar's investigation from Tracey's personnel file 16 It would be reasonable and appropriate that Mr Tracey be reimbursed for the outstanding legal expenses (approximately $43,000 00) that he incurred in defending himself 5 Sampling from News Articles Sampling from News Articles The Tribune - October 31, 2005 "The council wants to know what happened here," Scalise said "It raises the question in my mind as to what direction, if any, was given by the city manager " The Tribune - November 1, 2005 "McKinney said he did not plan to immediately name a successor to Tracey and said he might eliminate the job entirely " "It was still unclear Monday why Tracey, who was not asked to attend the meeting, told the couple of the action the city has no intention of pursuing, McKinney said 'I'm still not sure that we know what was said,' between the two parties, McKinney said after exiting the meeting " Atascadero News— November 2, 2005 "McKinney said no direction was given to Tracey to make the phone call to the Gaughans or to discuss eminent domain " "He acted alone in that conversation," said McKinney "In that telephone conversation, that was his own words and of his own volition " "We exonerated Wade on everything We gave him a vote of confidence. We owe him a debt of gratitude," City Councilman Jerry Clay said "At the time, I thought it was the right thing to do " Atascadero News— November 4, 2005 "I figured it wasn't my place," said Clay when asked why he did not call the Gaughans after the allegations of Tracey's threats surfaced Clay said he wondered why the Gaughans did not contact him or another council member, citing the message left by Tracey was reported to have been left in February "It probably would have been a good idea [for the Gaughans to call]," Clay said "It probably wouldn't have got to this point." "Pat did initiate contact with City Councilman Jerry Clay on Wednesday, but neither Clay nor Pat wished to comment on the details of that conversation " "The Gaughans said they were troubled over the council's decision to request Tracey's resignation "They still don't get it. They were so interested in 6 exonerating McKinney and dumping Tracey," Sue said "They didn't consider talking to him It was like a lynching " Atascadero News — November 23, 2005 Letter entitled "There are two problems city council members are facing"," authored by Becky Pacas, Atascadero City Councilwoman "If a city has an employee who is falsely representing the city council, it is a problem If that employee is taking it upon himself to make false threats to property owners in the council's name and creating liability for the city, the problem has escalated. If a city manager claims any employee is out of his control, then my recommendation to that city manager would be to request the resignation of the rogue employee, before incurring further expenses to the city What I have been presented with, here in Atascadero, is a combination of these two problems Mr Tracey's behavior has been covered in the newspapers with no need for discussion behind closed doors and no violation of the Brown Act. My question to our city manager was, what if any, was his direction to Mr Tracey to misrepresent our city council? Mr McKinney denies involvement in Mr Tracey's costly behavior If Mr Tracey has a different version of what occurred, then I want to hear it. "It wasn't me," "I don't remember," and "I don't know what I did wrong," are not sufficient." New Times — November 28, 2005 "We did not want to give the appearance of violating the Brown Act," said City Council member George Luna. "We had to rescind our action and will investigate Tracey " "The investigation is expected to go quickly," Luna said "We want to find out if there was any lying and exactly how things went with Tracey " 7 Statements and Testimony in Support of Findings Statements and Testimony in Support of Findings Ron Scholar- The words of most interest here are "eminent domain process" (Report of Investigation, Interview of Martin Tracey, November 18, 2005, page 20) Wade G. McKinney was interviewed by Ron Scholar as part of the Report of Investigation, and his testimony is contained therein. Following is an exchange regarding McKinney's knowledge of Mr Tracey making the call to the Gaughans, and the relationship he expected Mr Tracey to cultivate with the Gaughans. Page 2 Scholar- Do you have any recollection of talking to Mr Tracey about, you know, encouraging him to take some time to get to know the Gaughans and uh, kind of form a friendly working relationship with them? McKinney- I believe we did talk about that. Scholar- Okay, um, do you recall using the word or words to gain their confidence in Mr Tracey so that he could work with them? McKinney- I don't specifically recall that. Scholar- Okay, but generally that [is what you]would have expected Mr Tracey to do? McKinney- Yes Page 3 Scholar- Okay Now in February it is my understanding there was a closed session Council meeting or the redevelopment agency went into closed session? McKinney- Right. Scholar- And Mr Tracey was present in that closed session? McKinney No, I don't think so Page 4 Scholar- All right. Now in between that time, in other words the closed session meeting of February 22, 2005 and the March 7, 2005 letter[Bill Chisum], do you recall any discussions with Mr Tracey about Mr Tracey contacting the Gaughans or should he contact the Gaughans? 8 McKinney- No, I don't. Uh, I would have expected him to contact the Gaughans but I don't recall a discussion wherein we talked about that. Scholar- And why would you have expected him to contact them? McKinney- Because I wanted a high level of professional service on this project and I wouldn't have expected them to get a letter from the attorney out of the blue Scholar- So it was perfectly appropriate in your view for Mr Tracey to go ahead and contact the Gaughans to tell them that some process was moving forward McKinney- Right. Wade G. McKinney was deposed by the Gaughans on June 18, 2007 in the matter of Gaughan v City of Atascadero et al. (Case No. CV060925). While the whole of the deposition contains critical information about what was known and done leading up to the February 22, 2005 closed session meeting and following, key is the following exchanges between the attorney for Mr Tracey, attorney for the Gaughans, and Mr McKinney- Pane 92, lines 20-23: Roy Ogden Was it okay with you that Mr Tracey left that message on the Gaughan's answering machine? Wade McKinney- It was okay with me for Mr Tracey to leave a message indicating our progress with the Gaughans. Paae 92 line 24—paste 93 line16. Roy Ogden- I just read you a part of the message that was left. It was okay for Mr Tracey to leave that part of the message on the Gaughans' answering machine? Wade McKinney- No Roy Ogden Why not? Wade McKinney- Because I think the use of the words "eminent domain" are too strong. Pane 96, lines 20 -23. Roy Ogden Did you consider the message that Mr Tracey left on the Gaughans' answering machine in February of 2005 to be inaccurate? Wade McKinney- No Pate 97, lines 2 - 19: 9 Roy Ogden Mr Tracey made a statement that the city had decided to move forward with eminent domain on the Gaughan property and you're saying that's accurate? Wade McKinney- No, I'm not. You said what you read in there, that Mr Tracey said the city was moving on in the eminent domain process. Is that accurate? Yes. Roy Ogden Well, let's read it again so that we're sure of what it said. "City Council last night sitting in the Redevelopment Agency in closed session has directed staff to move forward with the eminent domain process on your property there across from the Carlton." You're saying that that's accurate? Wade McKinney- Yes. Pane 99, lines 5—14. Roy Ogden* Is it your understanding that Tracey told the Gaughans of action the City has no intention of pursuing? Wade McKinney- No I think that Tracey told the Gaughans of the eminent domain process and we haven't decided to actually do eminent domain. The process potentially culminates sometime in an eminent domain action which would have to be done in a public hearing with resolution that we talked about earlier and that has not occurred. Page 104 line 25—page 105, line 6: David Warren: Is it fair to say that when you looked at the content of the tape, the words that were left, that they were not inaccurate? Wade McKinney- Yes. David Warren: So the message that was left was in fact accurate, is that fair? Wade McKinney- Yes Mr McKinney was deposed again almost a year later on May 8, 2008 in the matter of Martin Tracey v City of Atascadero, Case No. CV 070917 In response to questions regarding the phone message Mr Tracey left for the Gaughans on February 23, 2005, Mr McKinney responded as follows. Page 45, line 25—Page 46, line 5: David Warren:Well, didn't you come out of the closed session meeting and have a conversation with Mr Tracey about him giving the Gaughans a heads-up about the decision? 10 Wade McKinney- Yes, Mr Tracey asked me if it was okay to give them a call, and I said yes Pane 47, lines 18—25. David Warren- Well, didn't you yourself conclude that you were in the eminent domain process at or about this time? Wade McKinney- I don't know David Warren. Didn't you state to others that you were in the eminent domain process? Wade McKinney- I -- I think that--and that's why I say I don't think this is a lie in this phone conversations. The Phase II environmental document is a piece of the eminent domain process, and we understood that we could eventually wind up there But we weren't trying to process eminent domain. David Warren- But you say you can eventually wind up there Didn't you yourself state to third parties in the February and March [2005] time frame that you were --that this matter was in the eminent domain process? Wade McKinney- I -- I think I did. 1 don't have a specific recollection as we sit here, but I believe that--that was my belief Pane 49, lines 1 — 17. David Warren: Well, Marty's initial reaction was that he hadn't sent any messages to the Gaughans, correct? Wade McKinney- Yes. David Warren Because neither of you had figured out that this was referring to something that happened eight months before, correct? Wade McKinney- Yes. David Warren: Were you surprised to learn that-- given the way it was presented in the paper, were you surprised to learn that what was being spoken about here had happened eight months before? Wade McKinney- Yes David Warren: When this article came out, did anybody at the City, be it you or any Council members, in responding to the press say, "Yes, we were in the eminent domain process." Wade McKinney- No Pane 86, lines 8— 10: 11 David Warren: Well, Mr Tracey was present at that February 22nd meeting, correct? Wade McKinney- Yes Paae 121, line 11 — page 122, line 2: David Warren: Did the City ever do anything to make known that contrary to what was being repeated with some frequency in the media, Mr Tracey has not engaged in intentional misrepresentation with respect to the Gaughans? Wade McKinney- No David Warren- Why not? Wade McKinney- We're protecting Marty's privacy rights David Warren: Did you understand that Mr Tracey wanted it known to the public that he had not engaged in any intentional misrepresentation? Wade McKinney- I believe that, yes. David Warren: So why did the City never make it known to the public that he had not engaged in any intentional misrepresentation? Wade McKinney- The same answer Protecting his privacy rights. Pane 123, lines 15—22: David Warren: And the City has never made such statements to the public to correct any misimpression that might be out there, correct? Wade McKinney- That's correct. David Warren: Why not? Wade McKinney- The same reason I told you David Warren: His privacy? Wade McKinney- Right. Exhibit Number 3 was entered into the record which is a is a five page memorandum whose subject"Summary of the Condemnation Process"was directed to the Honorable Members of the Redevelopment Agency Board,Wade McKinney and Marty Tracey 12 Paste 58, lines 6—21. David Warren: No recollection of who requested this (Exhibit 3)? Wade McKinney My- - I think I did But I don't have a -- I don't have a specific recollection of- - 1 think I asked Marty -- or asked Pat [Enright] or Marty or both to have this prepared David Warren- And do you recall why you were requesting it at this time? Wade McKinney Because I wanted to make sure that, if we were working on all these projects, that we were doing absolutely everything right. David Warren: Including with respect to the eminent domain process? Wade McKinney Yes. David Warren Okay Do you remember whether this memo was discussed at the [February] 22nd meeting? Wade McKinney I think it was. Paste 76, line 15— Paste 77, line 18: David Warren. At the time you had been directed to request the resignation of Mr Tracey, was there any evidence that suggested Mr Tracey had done anything improper or untoward other than what appeared in some newspaper? Wade McKinney Yes David Warren. What was that evidence? Wade McKinney- Well, the evidence at the time? David Warren Yes Wade McKinney Would have included the tape of the conversation with the Gaughans. David Warren What else? Wade McKinney- I mean—excuse me Left on the answering machine David Warren Did you have that tape at the time of the meeting? Wade McKinney- No I don't believe so David Warren. Well, as of the time of the meeting, what evidence was there, other than whatever somebody put in a newspaper article? 13 Wade McKinney- I don't— I don't recall. David Warren. Are you aware of any? Wade McKinney- Well, I don't know the timing of those. There certainly was a tape that had been played for several people, I think, at that time to determine if it was Mr Tracey that was on the tape It was not in my possession. David Warren. Had you ever heard that tape at the time that you received that direction? Wade McKinney- I think so, but I'm not positive Pane 78, lines—2—7. David Warren- What other evidence was there that Mr Tracey had done anything wrong or untoward as of the time of the meeting on October 31st? Wade McKinney- I don't know David Warren: Any that you're aware of? Wade McKinney- No Pane 79, line 25—pane 80, line 11. David Warren: Okay And did they tell you why they were demanding his [Marty's] resignation? Wade McKinney, Yes. David Warren: What did they say? Wade McKinney- They said that he misrepresented the City Council's action, and that the -- or the voice mail was inflammatory and that he was mean, and this was another example of his confrontational style, and that-- they said that he had lied about not knowing the phone message-- David Warren- About not leaving the message? Wade McKinney, About not leaving the message Pape 81, line 3— pane 84, line 16 David Warren Did you tell them whether or not Marty Tracey lied? Wade McKinney, 1 told them that I didn't think Marty did lie David Warren: Did you tell them whether or not he acted to scare or intimidate them? 14 Wade McKinney- I didn't think he did try to intimidate or scare them David Warren And did you relay that? Wade McKinney- Yes David Warren Did you say whether or not he was mean? Wade McKinney- I don't think I responded to that. David Warren- Did you believe that he was being mean? Wade McKinney Marty has a confrontational style David Warren: And in saying, "I hate to be the one to tell you this," do you think that was a mean thing to say to somebody? Wade McKinney I don't know what he was trying to do That potentially is one of the things he was trying to do I think the City Council saw it as throwing them under the bus. David Warren: Throwing the Gaughans under the bus? Wade McKinney The City Council. David Warren: Oh, throwing the City Council under the bus. Can you explain why they would think that? Wade McKinney Because the message, if you read the message, or listen to the message, he's saying that he hates to be the one to tell them that; he doesn't feel good about this, so it's like the Council is the bad guy and he's the good guy David Warren- And they were upset about that? Wade McKinney Yes. David Warren: You said some conveyed that he had misrepresented the Council? Wade McKinney Yes. David Warren: What did you say about that? Wade McKinney I think that's true. David Warren: How did he misrepresent the Council? 15 Wade McKinney He said that we were doing eminent domain, when we were really doing the Environmental Assessment, Phase II David Warren- He said that you engaged in the eminent domain process, did he not? Wade McKinney- Yes David Warren. And didn't you yourself agree with that in conversations with others at or about the same time? Wade McKinney- I agree that he was not lying 1 don't think that that was the appropriate -- I don't think that was the action of the City Council, nor do I think it was an appropriate message I think that Marty and I were working --were making sure that we had touched all of the correct bases for an economic develop process, so that if we got to the end of the process, we wouldn't have fouled up any steps. But I don't think City Council had it in their intention that they were yet involved in -- in eminent domain They voted to take--to do the Phase II Environmental Assessment, so I think that was a leap and I think it was poor judgment. David Warren Well, but you perceived that the Phase I and the Phase II were part of the eminent domain process, did you not? Wade McKinney- I think the Phase I and Phase II are part of the purchase process. And eminent domain is one of the things--of the ways we could have purchased We could have purchased without eminent domain. And 1 don't think the City Council took an action with Reference to eminent domain that meeting. They took an action regarding the environmental assessment. David Warren. So you didn't believe that you were involved in the quote, unquote, eminent domain process after the Council's action on that date? Wade McKinney- I think the Council's action on the day was to take a --was to authorize us to move forward on the environmental assessment. David Warren: And did you perceive that was a part of the eminent domain process at that time? Wade McKinney- No, I perceived that was part of the purchasing process. David Warren: Did you tell others that you were involved in the eminent domain process at or about the same time yourself? Wade McKinney- Other than Marty, or in these emails? I'm not sure what you're talking about. David Warren: Yeah, I'm talking about any other, Marty and others. Wade McKinney I don't know 16 Pane 86, lines 8— 10: David Warren Well, Mr Tracey was present at that February 22nd meeting, correct? Wade McKinney- Yes Pane 90, lines 11 — 14. David Warren- Did the City have any issue or concern that you're aware of with Mr Chisum [March 7, 2005] using these references to California eminent domain law for this purpose? Wade McKinney- No Martin Tracey was deposed on May 14, 2008 in the matter of Martin Tracey v City of Atascadero, Case No. CV 070917 In response to questions regarding the February 22 2005 closed session meeting, Mr Tracey responded as follows. Pane 86. lines 5— pane 89, line 13. Greg Coats. Okay You had—there was some directive coming out of a January meeting, about continuing to work with the Gaughans, but trying to move forward on the Clinton Project; correct? Mr Tracey- That's my recollection, yes. Greg Coats Okay There was a closed session held of the Redevelopment Agency, I think, on February 22"d, 2005 Mr Tracey- Yes sir Greg Coats. And did you personally attend that? Mr Tracey- I did Greg Coats. Do you remember who else was in attendance at the meeting? Mr Tracey- I do. Greg Coats. Who else? Mr Tracey- Mr McKinney, Pat Enright, the City Attorney at that time, and all of the Agency board members, who were Council members, and that would be George Luna, Wendy Scalies, Becky Pacus, Tom O'Malley, and Jerry Clay Greg Coats. What was your understanding of the reason that closed session meeting of the redevelopment agency was being called? 17 Mr Tracey- To discuss how we were going to move forward on the Gaughan Property Greg Coats. Was it specifically related to the Gaughan property, or was it related to other ongoing projects of the Redevelopment Agency? Mr Tracey- My recollection, it was specific to the Gaughan property Greg Coats. And as a result of that meeting, what was—were you given a directive to move forward on the Gaughan property in some fashion? Mr Tracey- Yes, Wade and I were given the directive Greg Coats. Okay And what was your understanding of the directive you were given? Mr Tracey- To proceed with acquiring access for the Phase 2 and the appraisal, and utilizing the eminent domain process in order to achieve that access. Greg Coats: What was your understanding, at that time, as to the meaning of the term "eminent domain process?" Mr Tracey- It would be the steps you would take under eminent domain law that would lead to the Agency Board making an offer to purchase And if the offer to purchase was rejected, then being in the position to decide whether or not they wanted to do a resolution of necessity and hold the public hearing in order to do that. Greg Coats. Okay As of that time, had there been any resolution of necessity made? Mr Tracey- Absolutely not. Greg Coats. As you understood the meaning of the term "eminent domain process," you would go through certain steps that could be utilized to potentially purchase the property, and, if unsuccessful, thereafter initiate the actual eminent domain proceedings? Mr Tracey, Right. 1 — I'm sorry Would you please maybe read it back or something? Greg Coats. Your understanding of the use of the eminent domain process, that term — Greg Coats. -- is that there are certain steps that you could—that you would take to obtain various procedures, that you could then utilize to either have the City buy the property, if the property owner were so willing, or if not, you'd utilize the same steps up to that point to initiate a more formal eminent domain proceeding? Mr Tracey- My understanding is that you have to use the eminent domain process, and follow all those steps, to—for it to be possible for the Board to make a decision on a Resolution of Necessity 18 Greg Coats. Was it your understanding that your directive was only to obtain a Phase 2 Environmental inspection and an appraisal, and nothing more? David Warren: Object as to misstating former testimony Mr Tracey- I'm —what else was I obtaining? Greg Coats. And I think what you told me earlier is your directive was to obtain a Phase 2, and appraisal, and utilizes the eminent domain process. Correct? Mr Tracey- To do that. Greg Coats. Right. And that's a term that was specifically used as part of the directive to you and Mr McKinney? Mr Tracey- As part of the discussion that we all engaged in. Pane 90, line 22- page 91, line16: Greg Coats. -- He authorized you to contact the Gaughans to essentially give them a heads up? Is that your understanding of-- Mr Tracey- Yes Sir Greg Coats. --The context of the meeting? Mr Tracey- I'm sorry Yes, sir, he did. Greg Coats. Did he suggest to you any particular words or phrases to use? Mr Tracey- No, sir, he did not. Greg Coats. You took it upon yourself to choose whatever words or phrases to use to give the Gaughans a heads up, correct? Mr Tracey- Yes sir Greg Coats. Okay Did Mr McKinney tell you to call the Gaughans and tell them that there was a directive to initiate the eminent domain process? Mr Tracey- That's what—that's what I asked Mr McKinney—when I asked him, "Should I give the Gaughans a heads up?" That's what I'm asking him In the matter of Gaughan v City of Atascadero et al. (Case No. CV060925) on February 27, 2008 and February 28, 2008, Mr Gaughan and Mrs. Gaughan said about Mr Tracey the following. 19 Pane 93, lines 19 -25. David Warren How many times do you remember meeting with Marty Tracey? Mrs. Gaughan. One or two, and it could be more David Warren- How did he treat you? Mrs. Gaughan Very nice. Doing his job. David Warren: Would you say he was professional -- Mrs. Gaughan I still like him Yes Pane 49, lines 4— 11. David Warren: Did you perceive that he [Mr Tracey]was trying to give you a heads-up to be of assistance to you? Mrs. Gaughan We were so worried about those two words, "eminent domain," but I did see the value in that he was trying to tell us something. But I was too worried about - - because he's always been polite and professional And I thought that what he said on that message was sincere Paue 99, lines 12—23: David Warren: Sure But you were - -your concern was about the content of the message? Mrs. Gaughan Yes. David Warren. What was going to happen with you and your property? Mrs. Gaughan Yes. And if I had to vote whether I liked Marty or Wade McKinney, it is a no-brainer I like Marty much better, so -- David Warren: And is it fair to say you believe that Marty was always fair and reasonable with you when he dealt with you? Mrs. Gaughan Yes. Pane 106, lines 5—10: David Warren. In the last quarter of 2004, did you have a "for sale" sign on the building, on the subject property? Mrs. Gaughan. I believe it was "for sale or lease." I believe that is what the sign said. And I don't know about the time frame But it could have been then. 20 Page 107, lines 20—24. David Warren: Did anybody, at any time, tell you that what was contained in Marty Tracey's phone message to you in February of 2005 was false, that he was telling you inaccurate information? Mrs. Gaughan No Patrick Gaughan had his deposition taken on February 27, 2008 and February 28, 2008 in the matter of Gaughan v City of Atascadero et al. (Case No. CV060925). Page 217, lines 10 -23 David Warren: In your earlier testimony yesterday, I believe that you said that it was made know to you what goes on in some of the closed meetings. Do you remember that? Mr Gaughan- Yes, I do David Warren: How was that made know to you? Mr Gaughan By one of the councilmen David Warren Which one? Mr Gaughan I'm not going to say Roy Ogden- Let me take a break for a second (Recess taken) Roy Ogden* He wants to know which council member Answer that question. Mr Gaughan It was Jerry Clay On October 14, 2008 during a regularly scheduled city council meeting a citizen read from the transcript of Pat Gaughan's testimony and raised the issue that Councilman Jerry Clay may have divulged information that was discussed during a past closed session meeting of the Atascadero City Council. Clay responded to the citizen's comment as follows(SLOSPAN video time stamp 1-03:19) Jerry Clay, I wanted to comment on what Joan O'Keefe had to say in regards to testimony of Pat Gaughan 21 Sue and Pat Gaughn have been friends of mine for twenty years or so, you know I talk to them on occasions. They may have read something into something that I said, uh, certainly I've tried to make it clear that I am not for eminent domain I consider to be that way so, uh, you know I do my best. I realize that closed sessions are not supposed to be, uh, bantered in the public but, uh, I do my best to keep that trust. So anyway that's my comment. Pane 228, line 3—14. David Warren: Is it fair to say that, in your dealings with Mr , Tracey, you thought that he and you got along pretty well? Mr Gaughan Yes, I did David Warren. Did you find Mr Tracey to be a reasonable man to deal with? Mr Gaughan. He seemed decent, sure. David Warren: Did he deal with you in a professional manner? Mr Gaughan: Yes, he did. Paue 229, line 25 through Page 230, line 21. David Warren During the entire time that you dealt with Mr Tracey, did he treat you fairly? Mr Gaughan. Yes. David Warren: Did you think he was a reasonable man to deal with? Mr Gaughan Yes. David Warren: Did he treat you professionally? Mr Gaughan. Yes, he did. David Warren• What was your reaction when you heard the city had fired him? Mr Gaughan I thought he was a scapegoat. David Warren. Did you and your wife talk about that? Mr Gaughan- Yes. 22 David Warren And when you say you thought he was a scapegoat, what do you mean by that? Mr Gaughan He was a scapegoat. Set out on the alter for whatever David Warren. I think I know what that means, but I want to know your understanding of what you meant by that. Mr Gaughan You bet. I meant that they told him to do what he did, and he had to do it. And they didn't say otherwise Pane 230 line 22 throunh Paae 231, line 13. David Warren. In your discussions with Mr Tracey, I believe you testified that you had talked about the fact that, because of the city's redevelopment plan, the city wanted to phase out automotive uses in certain specified areas of the downtown, is that correct? Mr Gaughan I don't believe I discussed it, but I assumed that by reading the document. David Warren. Did you ever have a conversation with Mr Tracey wherein you said, "how about some of these other guys? We're being talked about right now Are they being talked about too? Do you remember anything like that? Mr Gaughan Yes, I do David Warren- Do you remember Mr Tracey telling you that the city was going to focus on a number of those, but couldn't do it all at once? Mr Gaughan Yes. Paae 237, lines 2— 11. David Warren: Did you think Marty was a mean guy for calling and telling you this? Mr Gaughan No. David Warren. Did you think he did anything wrong personally apart from the city? Mr Gaughan Him? David Warren: Yes Mr Gaughan No I mean I don't believe that. David Warren. Okay You don't recall he did anything wrong? Mr Gaughan. Right. 23 Pate 241, lines 16—22 David Warren Do you remember Mr Tracey telling you that, sure, you can lease your property, you own it, and if you did that, it is quite possible the city might have to provide some sort of relocation benefits for your tenant? Mr Gaughan Yes. Page 247, lines 9—16. David Warren. Did you understand that if the city elected to seek your property in eminent domain, you would have the right to go get an appraiser or an expert valuation person to put a price on what he believed the fair market value of your property was? Mr Gaughan Did I? David Warren: Yes. Mr Gaughan Yes. The October 31, 2005 Closed Session meeting regarding the City Manger, Wade G. McKinney, was held under Government Code Section 54957(The Brown Act). Section 54957 states in pertinent part: "As a condition to holding a closed session on specific complaints or charges brought against an employee by another person or employee, the employee shall be given written notice of his or her right to have the complaints or charges heard in an open session rather than a closed session,which notice shall be delivered to the employee personally or by mail at least 24 hours before the time for holding the session. If notice is not given, any disciplinary or other action taken by the legislative body against the employee based on the specific complaints or charges in the closed session shall be null and void." Mr Tracey was not given any notice, nor did he attend the closed session meeting. Mr McKinney was deposed on May 8, 2008 in the matter of Martin Tracey v City of Atascadero, Case No. CV 070917 In response to questions regarding the October 31, 2005 Closed Session meeting, McKinney responded as follows: Pane 71, lines 1 —4. David Warren: Had you been made aware that any of the Council members, prior to the meeting [October 31, 2005], had concerns about your performance? Wade McKinney- Yes 24 Paae 71, lines 10— 16. David Warren. And I'm just wondering if you knew—if it was communicated to you prior to the meeting at any point which Council members had issues or concerns with your performance, or whether it was all of them Wade McKinney So it was communicated to me by Pat [Enright] Greg Coats. Okay You can answer that. Wade McKinney Wendy Scalise and George Luna. Pane 73, lines 1-10: David Warren. All right. The agenda that dealt with that meeting [October 31, 2005] didn't say anything about Marty Tracey, correct? Wade McKinney Correct. David Warren: And no notice of any discussion of Marty Tracey was given to Marty Tracey before that meeting, correct? Wade McKinney That's correct. David Warren. To your knowledge, Marty Tracey hadn't been given knowledge from any source that he might be discussed at that meeting, correct? Wade McKinney Correct. 25 Event Time Line EVENT TIME LINE The following timeline is based upon contemporaneous emails, the Report of Investigation, and other period documents. April 2004 April 23, 2004 Wade McKinney introduces Marty Tracey to Pat Gaughan at the Auto Shoppe Tracey was directed to work with Pat Gaughan toward the possible purchase of EI Camino Real (ECR) properties. April 27, 2004 Commencement of Phase I Environmental Site investigation with permission of Pat Gaughan Tracey communicated with Wade McKinney through email. April 27, 2004 Redevelopment Agency Meeting Wade McKinney presents executive director report concerning Redevelopment Plan Amendment and the relationship to issues of eminent domain. Recorded excerpts from the April 27"' meeting: Wade McKinney- During the strategic planning session this year, the Board ask us to return this item to the agenda, that would reevaluate the Redevelopment Plan and provide for the use of eminent domain on conforming properties where there was a super vote by the Redevelopment Agency Board. This ordinance, I believe requires a four fifth vote for the use of eminent domain on conforming uses. When we initially established the Redevelopment Agency we could only use the Redevel or eminent domain authority under specific uses. There have been some properties in downtown that have been more or less abandoned and this potential may provide opportunities for additional redevelopment in the downtown area. Wendy Scalise I'd just like to say that I'd like to thank the staff for following up on what we discussed at length at strategic planning, about how we can best help the downtown and move things forward and with that I would move to make the adjustment in our Redevelopment Agency by laws to, uh, so we can have eminent domain on non conforming commercial use in the downtown. Jerry Clay, I'll second the motion and you know, just saying, that I don't see anybody up here that's unreasonable What we're trying to accomplish here is the situations that Wade described where we have buildings that are boarded up, that are hindering the 26 redevelopment of our downtown and you know this is with a four fifths vote will allow us, which is called a super vote, to be able to deal with those folks. George Luna. I'm going to not support this motion. Eminent domain is very controversial already and by opening it up to possibly condemning conforming uses, I think, when there are already many, many potential non conforming uses that should be tackled first, I think it is not very, does not have much foresight. So I am going to oppose this motion. Clay and Scalise vote in favor of the motion Luna, Pacas and O'Malley vote in opposition. May 2004 May 3, 2004 Tracey letter to Patrick Gaughan regarding Phase I Environmental Assessment. May 5, 2004 Letter from Patrick Gaughan requesting copy of appraisal and Phase I May 10, 2004 Tracey letter to Patrick Gaughan returning receipt for copy of Phase I and appraisal. May 11, 2004 Through email, Tracey reports to Wade McKinney regarding status of Phase I work. May 11, 2004 Redevelopment Agency Meeting. The previous Redevelopment Plan Amendment and the topic of eminent domain is discussed again Recorded excerpts from May 11"' RDA meeting: Tom O'Malley- and I would just suggesting that we consider this with a unanimous vote on the board in the future, that it might be a tool that would be helpful to the Redevelopment Agency Wendy Scalise Yes and I actually voted for it before because I believe it would be an excellent tool, not something that would be used uh, I think there was a fear that it would be used to liberally, I guess I should say, but it is just another option." Roy Hanley* If we are going to take a swing at using eminent domain on a piece of property I want to swing and hit instead of swing and miss." I'd like to make it clear that Redevelopment Agency has the perfect legal power to use eminent domain to purchase property from a private property owner and turn around and sell it to 27 another private property owner The purpose of it has to be to fulfill the redevelopment Agency plan and purposes. Wade McKinney- I think in summary, I think you are asking a global question to respond to the comments made Mrs. Main made comments as to the use of other agencies with eminent domain. I have experience using eminent domain in other cities. It is in every case, has been a friendly eminent domain. There are advantages to the property owner for us using eminent domain in the purchase of their property and the tax advantages. So normally, a deal is struck using the eminent domain. It is usually requested of us, even if your first request has to be to try and negotiate a piece of property and usually when you begin that negotiation you get a request for the use of eminent domain because it shields the money Tom O'Malley- And I assume if we had the ability to do eminent domain that would still be a public process and that would be held before the public on a particular item before it was finalized. Mr McKinney- Under the procedure your discussion it would require various public hearings, findings. You would have to negotiate You have to provide a market appraisal that is public information, and it would require a unanimous vote of the council. Wendy Scalise. I'll move that the Board make a change to our Redevelopment Plan to the amendment to allow an eminent domain proceeding with a unanimous vote from the board. Clay seconds the motion. O'Malley, Clay and Scalise vote in favor of the motion Luna and Pacas vote in opposition June 2004 June 1, 2004 Tracey scheduled meeting with Wade McKinney to discuss Phase I report & Phase II and to receive permission to conduct Phase II June 2, 2004 Tracey asked Wade McKinney via email if he was ready to provide Pat Gaughan a copy of the Phase I report. Tracey was advised to give Mr Gaughan a copy June 2, 2004 Through email, Tracey asked Wade McKinney to review and approve a cover letter to Pat Gaughan regarding the release of a copy of the Phase I report. 28 June 29, 2004 Wade McKinney emails Marty Tracey about a special State of California fund that provides reimbursement for the clean-up of underground storage sites July 2004 July 1, 2004 Through email Tracey has discussion with Wade McKinney regarding the July 1, 2004 letter to Gaughans which requests permission for access to their ECR properties in order to conduct the Phase II Environmental Assessment. The letter is approved and mailed July 1, 2004 July 9, 2004 Letter from Patrick Gaughan requesting a copy of Phase II Environmental Assessment and receipt. July 12, 2004 Through email, Tracey reports to Wade McKinney that Pat Gaughan had called and informed Tracey that he was ready to go forward with Phase li July 22, 2004 Through email, Tracey and Wade McKinney discuss Sue Gaughan's request for an offer to purchase and Pat Gaughan's demand that the offer be for$1 1 million dollars. They also discuss the structure of an offer to purchase The offer was prepared and signed by Wade McKinney and mailed to the Gaughans on July 22, 2004 Late July/Early August 2004(As indicated in interviews documented in Scholar's Report of Investigation)* Late July early August 2004 Gaughans met with Marty Tracey (Gaughans Interview, page 10, sections 1 —4, Tracey interview, page 4, section 4) Tracey told them that the offer was, in fact, for the appraised value not to exceed $1 1 million. The Gaughans reasserted their desire for the City to pay the$1 1 million regardless of what an appraisal might say Tracey explained that as a public agency any offer by the City/Agency would have to be at the appraised value. Mrs. Gaughan then asked if the City would take their property if they did not accept the offer Tracey said that he did not know if the City would resort to doing a condemnation of their property Mr Gaughan asked for a time line as related to the City's acquisition of the property should they not agree to sell (Gaughans Interview, page 10, sections 1 —4, page 15, sections 1 — 18; page 56, sections 7-11 Also refer Tracey's email to Wade McKinney dated July 22, 2004). Tracey and the Gaughans discussed the process that the City/Agency would have to engage in prior to instituting eminent domain proceedings When again asked for an estimated time line, Tracey told them that he did not know given that no decision had been made regarding their property When the Gaughans asked if there would be any problem if they leased their property prior to the City doing eminent domain, Tracey told them that the property was theirs and there was no reason that they could not lease their property Tracey told them that if the 290 City/Agency were to take their property by eminent domain and they had a tenant at the time, by law the City/Agency would be required to find another site for the tenant and pay the cost associated to relocate said tenant. (Gaughan Interview, page 26, section 7 ) Mrs. Gaughan asked Tracey why the City/Agency was singling out their property and not other nearby properties engaged in automotive uses (Gaughan Interview, page 33, sections 4— 12) Tracey told the Gaughan that there were a number of properties that the City/Agency was interested in seeing redevelopment occur However, according to the zoning for the downtown area and Council policy, automotive uses were to be phased out of the downtown area. (Gaughan Interview, page 30, section 8; page 31, section 3 - 5) Tracey also indicated that the City/Agency did not have enough money to buy all of the automotive use property at one time. (Gaughan Interview, page 33, section 6) As related to acquisition time line, Tracey again indicated that he did not and could not know, as no decision had been made by the City/Agency (Gaughan Interview, page 14, sections 1 — 15, page 15, sections 1 — 18) Tracey indicated that the next steps would be the Phase II Environmental work and property appraisal and asked if they would reconsider allowing the Phase II and appraisal. The Gaughns indicated that they would think about it. Mid to late August 2004 through January 2005 Mid to late August 2004 through January 2005 there was little or no further contact with the Gaughans. (Gaughan Interview, page 25, sections 11 — 13, page 26, sections 1 —5 and Tracey Interview page 9, section 15, page 10, section 1) August 2004 August 10, 2004 Through email, Tracey receives an outline reference pre-eminent domain procedures from Thomas Gibson, a representative of Best, Best and Krieger The email was copied to Wade McKinney November 2004 Nov 8, 2004 Through email, Tracey asks Wade McKinney if he should discuss activity related to Gaughan property at the Planning Commission. Mr McKinney suggests they get together and package a presentation and indicates there are a variety of fishhooks in dealing with the commission. 30 December 2004 December 14, 2004 Tracey requested meeting with Wade McKinney in seeking direction regarding the Gaughan property December 2004—February 2005 Tracey worked with Wade McKinney and the City Attorney regarding direction on the Gaughan property January 2005 January 11, 2005 Tracey and McKinney sought direction from Redevelopment Agency Board regarding property purchases in the downtown, specifically, 6040, 6090, 6105, and 6195 EI Camino Real. January 31, 2005 Through email, Wade McKinney referred a call from Pat Gaughan to Tracey The issue involved Mr Gaughan's request for a trash receptacle and bench In discussions with Public Works, Tracey arranges for trash receptacle. Due to bus rider safety issues the bench could not be provided. Tracey reports back to Mr Gaughan. January 31, 2005 Wade McKinney accepted meeting with Tracey regarding Mr Gaughan's requests and what had been accomplished. February 2005 February 10, 2005 Through email, Tracey reported to Wade McKinney that the Main Street restructuring committee was discussing putting together meetings with downtown property owners about selling their properties. Main Street had suggested that Wendy Scalise and George Luna be enlisted to meet with the Main Street committee and the Gaughans. Through email ,Tracey asks Wade McKinney if"this is something the Council may want to see play out before going down the eminent domain path?" Through email Mr McKinney replies "Perhaps. You should run that idea by Pat in light of our planned legal action " February 10, 2005. Through email, Tracey and Wade McKinney have discussion regarding public use of Gaughan properties. 31 February 15, 2005 City Council members received Bill Chisum Memorandum— Summary of Condemnation Process (McKinney confirms this in his statements to Ron Scholar and later in his deposition in Tracey v City of Atascadero, et al ) February 16, 2005 Through email Tracey and Wade McKinney discuss Bill Chisum's memorandum on the eminent domain process. February 22, 2005 McKinney and Tracey take the issue to Redevelopment Agency Board The Bill Chisum Memorandum —Summary of Condemnation Process was discussed McKinney insisted on unanimity in order to go forward with process and on a 5-0 vote, direction was given to commence the eminent domainrp ocess. Following the meeting, Tracey had a discussion with McKinney in reference to contacting the Gaughans to let them know about the direction of the Agency Board (City Council) and to request that they (Gaughans) meet with Tracey McKinney authorized calling the Gaughans February 23, 2005 Tracey called the Gaughans and left the following voice message. "Pat, Sue, this is Marty Tracey from Atascadero I want to give you a heads up. The City Council last night sitting as the redevelopment agency in closed session has directed staff to move forward with an eminent domain process on your property there across from the Carlton I hate to be the one that tells you this, but I wanted you to hear it from me before you get letters from the city attorney and stuff like that. So, I don't feel good about this, but I would like to talk to both of you about it and what the process would be and what your options are, not to advise you, but just to answer your questions. "So, if you would give me a call back at your earliest convenience, maybe we can set something up, meet me here, or I'll meet you wherever you want to I'm at 461-5000, extension 3460 Talk to ya soon. Bye " Tracey appears to have had a cordial working relationship with the Gaughans and that is reflected by the content and tone of the message and their comments about Tracey during the investigation and subsequent testimony Tracey has indicated that the message was compassionate and consistent with his knowledge of their sophistication with eminent domain law and process, and which was based upon earlier conversations with them With regard to the leading statement: "I hate to be the one that tells you this ", Tracey 32 said that he knew from his conversations with the Gaughans in 2004, particularly the conversation they had in late July or early August of 2004, that what the Agency was about to do (go to court to force access onto their property)would not be well received by Gaughans. It was intended to soften the blow of the message With regard to the language "So, I don't feel food about this ", Tracey has indicated that he was referring to the fact that if the Gaughans and the City could not come to terms, the relationship might become adversarial, and given his past relationship with them that would have been unfortunate It was Tracey's understanding and direction to maintain a relationship with the Gaughans that was as cordial as possible, for the purpose of making one final attempt to gain their permission for access to their property without resorting to court. Tracey said that was the purpose of the March 1, 2005 meeting with the Gaughans. February 28, 2005 Gaughans call Tracey on February 28, 2005, and make an appointment to meet with Marty Tracey on March 1, 2005 in Marty Tracey's office at 9.00 a m Through email, Tracey notifies Wade McKinney of the meeting. March 2005 March 1, 2005 At the request of Sue Gaughan, Tracey prepared a second Offer to Purchase, and a second request for permission for entry onto the Gaughan's property to conduct the Phase 11 and appraisal. Tracey met with the Gaughans in his office at approximately 9.00 a.m According to Tracey the Gaughans did not complain or mention the February 23, 2005 phone message (Gaughan Interview, page 38, sections 1 —4, page 39, sections 5—8; Tracey Interview, page 22, sections 2—8) The failure to mention the phone message was commented on by Councilman/Agency Board member Jerry Clay who was quoted in the Atascadero News on November 4, 2005 "Clay said he wondered why the Gaughans did not contact him or another council members, citing the message left by Tracey was reported to have been left in February "It probably would have been a good idea [for the Gaughans to call]," Clay said. "It probably wouldn't have got to this point." During the March 1, 2005 meeting, Tracey spoke with the Gaughans about reconsidering and allowing the Phase II and an appraisal in an effort to avoid the necessity of going to court. Tracey went through the process explaining that in the event they could not come to terms that the process would then shift to the City Attorney and that he (Tracey)would no longer be their City contact (Gaughan Interview page 54, sections 5— 10) 33 Tracey responded to the Gaughans questions and requests, and suggested they discuss the matter with their attorney and other city officials if they had additional concerns. Tracey gave the Gaughans a second Offer to Purchase (created March 1, 2005 at 8.04 a.m ) and second request for permission (created March 1, 2005 at 7 31 a m March 1, 2005 Tracey requested a meeting with Wade McKinney in order to give an update March 2, 2005 Tracey mailed downtown zone information requested by the Gaughans during the March 1, 2005 meeting March 7, 2005 Through email, Tracey and McKinney reviewed and discussed the Bill Chisum letter of March 7, 2005, wherein it is indicated that the Redevelopment Agency"is considering the possible acquisition," of the Gaughan's property March 7, 2005 Through email, Tracey informed Wade McKinney that he referred the Gaughan property to Ty Martin, Commercial Development, and Charles Treatch, JRW Group March 22, 2005. Through email, Tracey received information from Public Works reference a cost estimate regarding the demolition of the Gaughan property March 22, 2005 Through email, Tracey reported to Wade McKinney that the Gaughans did not respond to the Bill Chisum letter of March 7, 2005 Tracey also reported a telephone conversation with Roberta Fonzi who indicated that she was the Gaughans' realtor Fonzi complained that Charles Treatch's people were contacting the Gaughans directly, and asked Tracey to inform Treatch that he needed to be contacting her Tracey and Fonzi discussed the possibility of doing a mixed-use low/mod senior housing project on the site, since this was the only type of project that he believed could work under a long-term lease agreement. Fonzi indicated that she would talk with Sue Gaughan. Wade McKinney replied to Tracey's email, "I am very glad to see the eminent domain is headed forward, I think this is the real answer" April 2005 April 4, 2005 Bill Chisum letter to the appraiser, Bruce Beandoin, setting forth the terms of the assignment [appraising Gaughan property]. April 12, 2005 Bill Chisum letter to the Gaughans—Notice that Agency intends to apply for a court order for entry onto their property 34 April 12, 2005. Tracey helps revise Wade McKinney's declaration for the April 27, 2005 court case, which seeks an order of the court permitting entry on the Gaughan's property for the purpose of conducting the Phase II Environmental evaluation and property appraisal April 21, 2005 Through email, Tracey informs Wade McKinney that Pat Gaughan had called, requesting that Mr McKinney call back. Mr Gaughan wanted to talk to Mr McKinney about the potential of building a parking lot on their property and leasing it to the City Mr McKinney responds to Tracey on April 26, 2005 seeking clarification April 22, 2005 Bill Chisum letter to attorney, Roy Ogden, confirming Ogden's representation of the Gaughans. April 26, 2005 Wade McKinney responded to April 21, 2005 email from Tracey regarding Patrick Gaughan's request for a call from Mr McKinney reference the potential in building a parking lot and leasing it to the City April 26, 2005 Through email, Tracey informed Wade McKinney that Gaughans' attorney sought a $20,000 court deposit for any damage done as a result of the inspections. Tracey offered $5,000, which was agreed upon. April 27, 2005 Filing of Stipulation Permitting Entry on Property and Order Thereon. Letter from Wade McKinney to the Gaughan's, reference Notice of Decision to Appraise and Notice of Land Acquisition Procedures. April 28, 2005 Bill Chisum letter to attorney Roy Ogden— Notice and Description of activities April 28, 2005. Bill Chisum letter to ATC representative, Louis Cappel— Notice to do work between May 9, 2005 and May 27, 2005 April 28, 2005 Bill Chisum letter to appraiser—Notice of time and place May 2005 May 2, 2005 Tracey meets with Landis Automotive owner, Damian Chiapella. According to Tracey, Mr Chiapella was angry that he had not received a long term lease and that it took the City a month to process his business license Tracey and Mr Chiapella spoke about potential relocation should the City acquire the Gaughan property 35 May 2, 2005 Tracey worked with Bill Chisum and Wade McKinney on preparing a joint resolution of the City Council and Redevelopment Agency recommending the adoption of Relocation Guidelines. May 11, 2005 Tracey sent an email to update Wade McKinney regarding Phase I Environmental Site Assessment. McKinney replies by email and In part, states, "Hang in there" May 13, 2005 Tracey informed Wade McKinney of Pat Gaughan's request for a meeting with Wade and Tracey to discuss his idea of building a parking lot and leasing same to the City A meeting was set for May 19, 2005 at 9.00 a.m. May 17, 2005 Bill Chisum letter to Gaughan attorney, Roy Ogden, confirming the appraisal appointment for May 23, 2005 at 1000 a.m. May 19, 2005 Wade McKinney and Tracey met with Pat Gaughan regarding his parking lot concept. After Pat leeves the meeting Mr McKinney rejects the idea. May 24, 2005 Meeting of the Redevelopment Agency Consent calendar includes Joint Resolution reference relocation guidelines May 25, 2005 Copy of letter from Damian Chiapella, Landis Automotive, informing Pat Gaughan that he was terminating his lease. June 2005 June 8, 2005 Bill Chisum authors a letter to respond to Damian Chiapella letter In part, Chisum explains that, "The City is also engaged in general planning activities as to the subject property including the procurement of an appraisal and an environmental assessment in advance of a possible acquisition of the property June 20, 2005 Through email, Tracey informed Wade McKinney that he had received a copy of the Appraisal Report and asks if Mr McKinney wants to see it. Mr McKinney's email response is, "How much?" June 27, 2005 Bill Chisum letter to Gaughan attorney, Roy Ogden, reference a meeting scheduled July 13, 2005 with Gaughans and including Agency environmental consultants at City Hall at 2.00 p.m. to discuss the final report regarding Phase II Environmental Site Assessment. 36 July 2005 July 5, 2005 Tracey invited Wade McKinney to participate in the July 13, 2005 meeting with the Gaughans, their attorney Roy Ogden, environmental consultants, City Attorney Patrick Enright, and Attorney Bill Chisum regarding the final Phase II Environmental Site Assessment. McKinney replies "No, thanks for the invite " September 2005 Sept. 1, 2005 Tracey referred Gaughan property to the developer/investor Jay Higgins of Capital Pacific Homes. Sept. 13, 2005 Through email, Tracey has discussion with Wade McKinney regarding documents prepared by Bill Chisum —Offer to Purchase, Site Clean-up, Summary of Comparable Sales, and Summary of Appraisal Also discussed is status of Phase II final report. Tracey Informs Wade McKinney that he had authorized ATC to help the Gaughans in preparing and submitting a grant application to the UST Fund. Sep 27, 2005 Tracey informed Wade McKinney to expect a letter from the Water Quality Control Board. Sept. 27, 2005 Wade McKinney asked Tracey to prepare a packet with an executive summary for an Agency closed session on October 11, 2005 in order to have Board send the Gaughans an offer to purchase Sept. 29, 2005 Tracey provided copy of Government Code Section 7277 to Wade McKinney regarding relocation benefits. Sept. 30, 2005 Tracey informed Wade McKinney that the Water Quality Control Board letter had arrived, and that a copy was in his mailbox. Sept. 30, 2005 Tracey informed Wade McKinney that there was a New Times reporter looking into the establishment of the redevelopment project area. That she was looking for a "Blight Report." Tracey asked Wade where he might find a copy of such report. Mr McKinney responds that"It is in with the original Agency development stuff" 37 October 2005 October 3, 2005 Tracey asked Wade McKinney if the letter from the Water Quality Control Board should be included in the Closed Session packet. Tracey asked Wade McKinney if there was any problem with him calling Pat Gaughan and telling him that the Agency will be considering making an offer to purchase in closed session on October 11, 2005—to which he replied "No problem " Through email, Tracey informed Wade McKinney of an additional telephone conversation with the New Times reporter "Just had a pleasant conversation with the New Times Reporter She has figured out that it is very tough to get the same story from two people in Atascadero She said that there is a lot of lying going on," referring to the people she has been talking to in town She asked if she had more questions could she call me—to which I said "please do " Pat Gaughan told her that his place has never been for sale, and that Pat's real estate agent confirmed that. How does that work? Additionally, I understood that Roberta Fonzi was his agent." Tracey called Pat Gaughan and then reports through email to Wade McKinney- "Just spoke to Pat, he said that he has two offers- I congratulated him, and said that if he could make a deal that would be terrific. He said that the offers are low because of emanate domain (Chuck Treatch told me that he offered Pat $1.2 million, and Pat came back at$16) That he has not had a tenant for several months now, and someone is going to pay for that. I was very positive with Pat, saying that everything will work out. He wanted me to tell him what the offer would be, and also discuss his offer to build a parking lot and rent it to the City I told him that the Agency/Council may decide not to make an offer, and that it would be better if(wait to hear what the Agency/Council says before discussing these things any further" October 11, 2005 Agency conducts closed session regarding Offer to Purchase the Gaughans' properties. October 12, 2005 Offer and other documents discussed with Wade McKinney, and put into final form. October 13, 2005 Email received from Wade McKinney- "Tell me you didn't leave a message for Pat telling him that we have initiated eminent domain proceedings." Tracey replies by email- "What?" 38 Wade replies by email: "New Times was calling Council members last night saying they listened to a voice mail from a City Staff member on Gaughans' machine saying that we had initiated eminent domain " Tracey went to Wade's office and denied making a call to the Gaughans and indicating that the last time he called the Gaughans was on October 3, 2005 October 19, 2005 Tracey reported to Wade McKinney via email the following "I got a call from the New Times reporter this morning She had two questions for me 1 How long does the RDA last, and 2. Pat claims to have a phone recording from me to him wherein I say (admit) something to the effect that I told his tenant (Landis Automotive I think) about emanate domain to scare the tenant out of Pat's lease with him The Reporter wanted to know if I had called and said those things to Pat. I said: "Nope." I told her I would love to hear the recording She said she would ask the Gaughans. So, it appears there are now two recordings, or one, or? The New Times Reporter talked to Pat Enright yesterday, and we talked after I called Pat this morning and told him of this recent communication with the New Times Reporter" October 20, 2005 Tracey letter to Wade McKinney regarding New Times and Wendy Scalise October 20, 2005 New Times reporter called Tracey and set up meeting for him to listen to the Gaughan tape at 4 15 p m Tracey called Marcia Torgerson and asked if she was available to meet and listen as well. She was available and agreed to listen with Tracey October 20, 2005 Marcia Torgerson called Tracey and said that a New Times photographer was asking for him. Tracey told Marcia that he did not have a meeting with a photographer, but that he would go to the reception counter to see what was going on. The photographer was aggressive and immediately began taking photographs. Tracey asked that he not take his picture The reporter then showed up with a recorder indicating that she was going to play it. Tracey said several times that he had not agreed to this and then exited into the employee area of City Hall The photographer followed and tried to pull the door out of his hand while saying "Isn't this public property?" Tracey said "no," and pulled the door from his hands to close it. 39 Marcia Torgerson and others witnessed Tracey's encounter with the photographer, and Mrs. Torgerson told what she saw to Ron Scholar Her testimony is part of the Report of Investigation October 21, 2005 While meeting with Marcia Torgerson that morning, Tracey told her that the New Times reporter had called offering another opportunity to listen to the Gaughan tape. While Tracey was suggesting that she return the call and listen to the tape, Wade McKinney walked up and Tracey explained that he had not yet listened to the tape and speculating that perhaps it was fabricated. Tracey then suggested that Mr McKinney and Mrs Torgerson arrange to listen to it. October 24, 2005 Tracey authors memo random to Wade McKinney regarding encounter with New Times photographer and reporter October 25, 2005 Meeting with Wade McKinney in Tracey's office in late afternoon regarding New Times. Tracey's wife was present. Wade said he had heard a portion of the tape, and that it was Tracey's voice. McKinney told Tracey what he remembered of it, and Tracey said it sounds like he (Tracey)was trying to be a good guy, to which Wade McKinney agreed McKinney told Tracey that the New Times article would be bad, that it would hurt and that the New Times does not like the City of Atascadero, twists things out of context and will out- right lie Wade told Tracey to "stay cool, don't react, don't talk to the press when they call." McKinney indicated that he would send a meeting request for first thing Monday morning, October 31, 2005 and "Then we will work out a response to the Atascadero News and The Tribune" New Times—October 27, 2005: Excerpts from news article But Atascadero Mayor Wendy Scalise told New Times that the Council has not approved plans to turn the Gaughans property into a garage. "There are currently no specific plans for that property," she said. When asked about the low offer, Scalise used the reported contamination as a reason for the decrease in price She said she was not aware that the currently reported levels are not high enough to require cleanup When New times played the tape for Mayor Scalise she wouldn't comment as to the caller's identity But she did say when asked about the call "Clearly if any member of our staff is doing something wrong they will be dealt with." October 26, 2005 Meeting request from Wade McKinney for October 31, 2005 October 27, 2005 Wade McKinney authorizes press release to news media. October 28, 2005 Marcia Torgerson informed Marty Tracey that his meeting with Wade McKinney for October 31, 2005 at 8.00 a.m. was canceled. 40 That the Mayor, Wendy Scalise, had called for a closed session meeting to evaluate the performance of Wade McKinney, with possible disciplinary action October 28, 2005 Meeting in Marty Tracey's office with council member Tom O'Malley, and Deputy Director, Steve McHarris. Tom said that the New Times article was not a big deal. That he was proud to be associated and stand with Tracey That he looked forward to explaining the difference between eminent domain process and proceedings. That they would get through this, and not to worry October 29, 2005 Tracey wrote a letter to Tom O'Malley The letter was emailed to O'Malley and copied to Wade McKinney In the letter Tracey defended both himself and Wade McKinney Excerpts from Tracey's letter include. "With regard to the Gaughans and my dealings with them, while it appears that some council members now want to deny the truth in wake of the new times article, the City has been in the "process" of emanate domain regarding the Gaughan properties since February 23, 2005. The documents show that is exactly what the Agency and the City Attorney's office has been doing." "Given the nature of emanate domain, the Agency had a moral and ethical responsibility to inform the Gaughans, as the owners of the property and only the Gaughans, of the process and to include them from the beginning " "My intentions, as demonstrated by my actions, has been to treat the Gaughans with respect, to include them, not to deceive by omission or otherwise, avoid scaring them unnecessarily, work with them in the spirit of cooperation, and to keep them as informed as possible—all of which is well documented. In doing so, 1 know that I have represented City management honorably and professionally" "Both the Tribune and the Atascadero News have called to speak with me. It is important to my reputation that my story and facts get told. My expectation was that Wade would help me first thing Monday morning—that meeting was canceled Friday afternoon. I hope that cooler heads prevail during the Council meeting Monday morning " October 29, 2005 Negative email to Tracey from Council member Becky Pacas. October 30, 2005 Tracey asked Wade McKinney for his guidance on what to do with the calls from the Atascadero News and The Tribune that had come in late Friday afternoon. 41 The following morning Wade McKinney responds by email " Let them wait until this afternoon." The Tribune -October 31, 2005: "The board cannot directly fire or discipline Tracey, but can direct McKinney to do so," Councilman George Luna said. "I think that's a possibility Luna said. " This is a very serious issue. We'd been making substantial progress (on downtown redevelopment) and this is a black eye " The Tribune -October 31, 2005: "The council wants to know what happened here," Scalise said. "It raises the question in my mind as to what direction, if any, was given by the city manager" October 31, 2005 As recounted by Tracey- Tracey received a visit by Tom O'Malley in his (Tracey's) office prior to the closed session meeting. Tom said that he thought Wendy Scalise calling the meeting had more to do with the"Dean Coker incident"than the New Times article and that Wendy Scalise was very upset with Jim Lewis' conduct with Mr Coker[Bob Kelly], and with Wade. O'Malley suggested that he thought everything would work out. Later that afternoon, after the closed session meeting, Tracey ran into Mr O'Malley as he was exiting City Hall Annex. Tracey asked O'Malley how things went. O'Malley slapped Tracey on the shoulder, and said: "You will be just fine" Sometime later, about 3 30 or 4 00 p m , Wade McKinney came into Tracey's office. Tracey said to McKinney- "long meeting " McKinney replied "Yes, very long meeting." McKinney then said "The good news is that the Council is not firing me I have been exonerated of everything, and they gave me a five- 0 vote of confidence. However, the council wants you to resign " "Please gather your personal items and leave the premises. Go home and think about a severance package. You are not to speak to any city employees, or set foot on or in any city property You will be on administrative leave, on me, until further notice " Tracey was stunned and relied, "okay " McKinney stood up and left, and Tracey did as he was instructed. November 2005 The Tribune (Atascadero wants employee out)—November 1, 2005. Excerpts from news article 42 "Council reacts to alleged eminent domain threat by ordering city manager to ask for resignation of Marty Tracey, a city redevelopment official" "When something like this happens, it's a stop-check," Scalise said after the meeting "It (the meeting)was very professional " "McKinney said he did not plan to immediately name a successor to Tracey and said he might eliminate the job entirely" "It was still unclear Monday why Tracey, who was not asked to attend the meeting, told the couple of the action the city has no intention of pursuing, McKinney said." "I'm still not sure that we know what was said," between the two parties," McKinney said after exiting the meeting." "I think it (the meeting)was important and strategic and structured," McKinney said " I don't think it was a setback. It was a good check for us." November 1, 2005 Tracey email to Wade McKinney requesting that the Administrative Leave be put in writing Wade sent the letter on this day November 1, 2005 Tracey email to Marcia Torgerson regarding City cell phone November 2, 2005 Citywide email from Wade McKinney regarding October 31, 2005 Special Council meeting Atascadero News(Council votes 5-0 to support McKinney, dump Tracy)— November 2, 2005: Excerpts from news article "Sue and I were running scared," said Pat[Gaughan] when asked why they did not contact McKinney or a city council member regarding their fears, which they say were generated from the telephone message and other city correspondence "We called Wade McKinney [in the past] and he blew us off I'm disappointed [with the decision] I think Wade McKinney had something to do with it. I wish the city council would have reprimanded both fellows, [McKinney and Tracey], and they would have kept their jobs " " McKinney, who said he heard part of the message, said the voice on the tape is Tracey's. We have not initiated eminent domain," McKinney said. "There has been a lot of discussion with respect to this, such as an appraisal and environmental study" "Such a meeting has not occurred," he said. "I'm sorry there was a misunderstanding about the eminent domain process. We continue to be very interested in helping [the Gaughans] in developing their property" McKinney said no direction was given to Tracey to make the phone call to the Gaughans or to discuss eminent domain. 43 "He acted alone in that conversation," said McKinney "In that telephone conversation, that was his own words and of his own volition." "1 had direction," Tracey commented about McKinney's statement." "I'm not sure what our next move is," McKinney, who was working on the Gaughans' letter of clarification at time of press, said when asked what the city would do if Tracey decided not to resign. "I hope it helps clarify things and put things straight where the council is toward our property owners," Councilwoman Becky Pacas said "Mr Tracey misrepresented us. I hope it doesn't happen again. He was out of line " "I think we made the right decision," Mayor Wendy Scalise said. "I think it was totally unprofessional The council agreed this was a blooper that needed to be corrected." "We exonerated Wade on everything We gave him a vote of confidence We owe him a debt of gratitude," City Councilman Jerry Clay said "At the time, I thought it was the right thing to do " "I never expected this. I did nothing wrong, "Tracey said. "This has all been blow out of proportion This is so over the top" "Tracey contends he was only doing what he was expected and told to do, which was to start the procedure to develop or acquire the Gaughans' property In doing so, he said he was required to observe the city's mandate to remove all automotive shops from the downtown area. He said he referred developers to the property to consider the purchase and development of the property To his knowledge, only one developer made an offer Tracey said the steps or procedures he was following were part of the process to develop or acquire the land and are the same steps the city would have to go through at the end of the process if city leaders elected the eminent domain option." "He said the city's hope was to come to a solution before electing eminent domain. He said that city had not voted on an action involving eminent domain. In order to proceed, the city, according to Tracey, had to conduct an appraisal, a phase I and phase II environmental study and make fair market offers to the owners. He said if no resolution came about, the city had the option to decide and proceed in acquiring the property through the eminent domain process. "You have to work to make a good-faith effort to purchase property and find some other mutually agreeable resolution," Tracey said. "You only use eminent domain when everything else is exhausted." November 4, 2005 Pursuant to Marcia Torgerson's request, Tracey forwarded city credit card receipts Atascadero News (Gaughan not satisfied with city's clarification letter) — November 4, 2005. Excerpts from news article 44 "They are represented by an attorney Normally, it would be inappropriate to talk," said McKinney "Our attorney talked to their attorney, as would be appropriate." According to McKinney, the Gaughans' lawyer said they have a developer who is prepared to proceed with a commercial mixed-use project. "We're thinking everything is going right," said McKinney "I think it's a clear letter and clearly comes with an apology,"Atascadero Mayor Wendy Scalise said. Scalise did not wish to comment when asked why she did not call or visit the Gaughans when the allegations surfaced or why McKinney or other staff were not instructed to do so "The fact of the matter is we live in a sophisticated world where things need to be in black and white," Scalise said. "It's a long way from the days of a handshake and a verbal conversation were adequate I sympathize with them " Councilwoman Becky Pacas, who like the other council members reviewed the letter before it was mailed, said she thought the letter was appropriate. "I think that letter very fairly represents the agency," Pacas said. "I figured it wasn't my place," said Clay when asked why he did not call the Gaughans after the allegations of Tracey's threats surfaced. Clay said he wondered why the Gaughans did not contact him or another council member, citing the message left by Tracey was reported to have been left in February "it probably would have been a good idea [for the Gaughans to call]," Clay said. "It probably wouldn't have got to this point." "Three paragraphs on a page and a 37-cent stamp doesn't cut it. It's too little too late It's a perfect example of how the city treats its average citizens. It's what can the people do for them and not what they can do for the people," Sue [Gaughan] said. "Why couldn't Wade McKinney himself pick up the phone or any of the council members," Sue asked. Sue said she was also upset over statements made by Tracey and McKinney to the press and ones that were in McKinney's letter stating the city referred developers to them. "The city has never referred any developers to us," Sue said. "We'd be happy to go over any list of developers with them." The Gaughans said they were troubled over the council's decision to request Tracey's resignation. "They still don't get it. They were so interested in exonerating McKinney and dumping Tracey," Sue said. "They didn't consider talking to him It was like a lynching." November 4, 2005 Tracey requested copy of Personnel Rules from Marcia Torgerson November 8, 2005 City Council Meeting Agenda item "a" is scheduled for Closed Session. Agenda language- "Conference with legal Counsel— Anticipated Litigation—Two Cases Significant exposure to litigation pursuant to Govt Code Sec. 54956 9 Subdivision b.3 a." As recorded in corresponding meeting minutes, "City Attorney Patrick Enright announced that prior direction to the City Manager by the City Council to seek the resignation of Mr Tracey has been rescinded n 45 November 9, 2005 Memo from Wade McKinney notifying Marty Tracey that the City Council had rescinded its direction that McKinney request Tracey's resignation and that "a personnel investigation has been opened into the conduct and statements attributed to you in the October 27, 2005 New Times article entitled "Caught in the Act." McKinney indicates that the City has retained Ronald J Scholar, an attorney with the Low Offices of Kronic, Moskovitz, Tiedemann and Girard to conduct an "independent investigation" and directs Tracey to cooperate with Mr Scholar's investigation. Tracey is also informed that he can be represented at his "own expense " The Tribune (Atascadero drops move against official)— November 10, 2005. Excerpts from news article. "I think it was a rush to judgment for the council to do that without hearing both sides," said Mayor Wendy Scalise " The council's response marked the first time in recent history the five-member panel has actively sought an employee's resignation, Scalise said " "I have certainly never been through anything like this before," she said Tuesday " This was, in my estimation, a highly unusual situation, and we needed to have a response to it." "Council Members ordered Tracey's resignation after deeming McKinney's request to reassign the staffer"a long way away from matching the severity of the (Tracey's) action," Scalise said " "Scalise said the reversal could hamstring council members looking to hold a city staffer accountable for what fellow Councilman George Luna initially called a black eye on redevelopment efforts." "Scalise said that Tuesday's decision will limit how the council can address the way the city manager—one of only two employees who answer directly to the board—handles those working directly beneath him." November 10, 2005 Tracey email to and from Marcia Torgerson regarding city cell phone Atascadero News(City council rescinds request for Marty Tracey's resignation)— November 11, 2005. Excerpts from news article "In the first place, it was best to let the personnel process go forward," City Councilman Jerry Clay said. It's best to use proven and true procedures and not to overstep authority and influence We likely overreacted. We need to let the city manager do his job as he sees fit." 46 "City Councilwoman Becky Pellet-Pacas did not wish to comment on the council's decision regarding Tracey at Tuesday's meeting She did, however, say the council discussed the city manager and said, "there was absolutely no violation of the Brown Act" committed by the council. "We did make a mistake, "City Councilman George Luna said. "Only the city manager and city attorney work for the council. We can't review Marty Tracey" Luna concluded the issue should have been dealt with through the normal in-place proceeding as defined by the city's personnel process. He said the investigation will take place with the city manager in the lead. "The process should go forward, " said Luna. Luna said he meant the "disciplinary process"when asked to clarify which process he was referring "I don't know if our minds are changed. All council can do is give direction," Mayor Pro Tem and future mayor Tom O'Malley said. "The council represents city residents in setting policy direction for the city and should not be involved with internal personnel issues. The only city employees that the city council has authority to hold accountable for policy implementation are the city manager and city attorney "By law, personnel issues are confidential until final resolution. My intention is that any action I participate in reflects these principals " New Times—November 11, 2005 Excerpts from news article Tracey is expected back at work as early as tomorrow, Mayor Wendy Scalise said "I can't comment now," Scalise said when asked what action the Council would take regarding the alleged threats. November 11, 2005 Memo from Ronald Scholar to Tracey regarding his investigation Tribune Editorial (The wrong way to deal with an employee)— November 14, 2005. We give the Atascadero City Council a look-before-you-leap brickbat for the way it's handled the Marty Tracey affair As you may recall, Tracey was the city's deputy director of redevelopment who left an allegedly threatening message dealing with eminent domain on Pat and Sue Gaughan's answering machine last February Because of that, the council recently called a closed session to discuss the job performance of Tracey's boss, City Manager Wade McKinney, who walked out of the session with a vote of confidence from the council and orders to ask for Tracey's resignation. The council, saying it may have rushed to judgment, has since had a change of heart about the resignation Meanwhile, Tracey has been left dangling November 15, 2005 Tracey letter to Wade McKinney regarding employment rights and Brown Act violations. 47 November 15, 2005 Letter from Wade McKinney directing Tracey to meet with Mr Ron Scholar at City Hall Annex Thursday, November 17, 2005. November 15, 2005 Email between Ron Scholar, Wade McKinney and Marty Tracey regarding a change of time and place for the interview November 16, 2005 Letter from Wade McKinney acknowledging receipt of Marty Tracey's November 15, 2005 letter and refers to Mr Scholar's investigation as a "fact-finding inquiry" Atascadero News (Council may have violated Brown Act in Tracey case— November 16, 2005. Excerpts from news article "If any violations of the Brown Act occurred it was only because we got bad advice from the city attorney" Scalise said " "Scalise said the council did not request Tracey's resignation, but did request the city manager to do so" "When asked if the council discussed Tracey, Scalise said, "We did only to the extent that Mr McKinney is responsible to express our displeasure of Mr Tracey's behavior [During the meeting], 99 9-percent of the conversation was about McKinney" "According to Scalise, an attorney from Kronick Moskovitz Tiedemann &Girard, other than Enright, will begin the investigation this week." "I prefer not to make a comment until the investigation is over," City Councilman Jerry Clay said." "No official or unofficial notice was given to Tracey regarding the council's discussion of his resignation and/or actions, according to McKinney, although the council requested his resignation. According to McKinney, he was unaware the council was going to discuss Tracey's job. He also said the city attorney, Patrick Enright, by request of Mayor Wendy Scalise, gave direction to the staff member who drafted the agenda. McKinney said he had nothing to do with drafting the special closed-session agenda." "According to Enright, the cases differ because Moreno was an "at-will" employee, meaning he could be released at anytime by his superior, the city manager In a previous interview, Enright said no violation of the Brown Act had been committed by the Atascadero City Council regarding Tracey and the council's request of his resignation during the Oct. 31 special closed-session meeting." "On the eighth [of November], we proceeded with an abundance of caution to protect the due process for Marty," Enright said "We are going to follow the rules and regulations. The city manager has not been directed [at the Oct. 31 meeting]to fire him, but to seek his resignation." 48 "Currently, the city is performing an investigation into Tracey's actions, which, according to Enright, is "finding out what [Tracey] did wrong, if anything Let the investigation play out its part." "According to McKinney, the personnel process being employed by the city in similar cases may take up to three months." November 21, 2005 Tracey emailed clarifications to Ron Scholar interview questions Atascadero News (There are two problems city council members are facing by BECKY PACAS/ATASCADERO CITY COUNCILWOMAN)— November 23, 2005 "If a city has an employee who is falsely representing the city council, it is a problem. If that employee is taking it upon himself to make false threats to property owners in the council's name and creating liability for the city, the problem has escalated If a city manager claims any employee is out of his control, then my recommendation to that city manager would be to request the resignation of the rogue employee, before incurring further expenses to the city What I have been presented with, here in Atascadero, is a combination of these two problems. Mr Tracey's behavior has been covered in the newspapers with no need for discussion behind closed doors and no violation of the Brown Act. My question to our city manager was, what if any, was his direction to Mr Tracey to misrepresent our city council? Mr McKinney denies involvement in Mr Tracey's costly behavior If Mr Tracey has a different version of what occurred, then I want to hear it. "It wasn't me," "I don't remember," and "I don't know what I did wrong," are not sufficient." November 28, 2005 Email response by Wade McKinney to Marty Tracey's questions regarding the letter to the editor of the Atascadero News from Councilwoman Becky Pacas entitled "There are two problems city council members are facing." New Times (Martin Traceys whereabouts remain elusive)—November 28, 2005 "We did not want to give the appearance of violating the Brown Act," said City Council member George Luna. "We had to rescind our action and will investigate Tracey " "The investigation is expected to go quickly," Luna said. "We want to find out if there was any lying and exactly how things went with Tracey " November 29, 2005 Special Joint meeting regarding Conflicts and Ethics, Ex Parte Communications, and Brown Act. December 2005 December 12, 2005 Marty Tracey email response to Marcia Torgerson regarding invoices from Frazee Paints. December 21, 2005 Tracey acknowledges receipt of Notice of Intended Disciplinary Action and enclosures. 49 December 28, 2005 Letter from Martin Tracey to Wade McKinney requesting Pre- disciplinary Conference December 30, 2005 Letter from Wade McKinney to Martin Tracey granting request for Pre-disciplinary Conference January 2006 January 5, 2006 Tracey received copies of Ronald Scholar interview tapes via FedEx and copy of his Personnel File January 5, 2006 Letter from Wade McKinney to Martin Tracey regarding letter to Gaughans dated March 1, 2005 seeking authorization for access from them for the Phase II investigation and appraisal. January 6, 2006 Letter from Martin Tracey to Wade McKinney seeking better copy of recorded phone message and document related to the City Council Closed Session meeting on October 31, 2005 January 10, 2005 Letter from Meredith Hendrickson regarding Personnel File records. January 10, 2006 Letter from Wade McKinney in response to January 6, 2006 letter from Martin Tracey January 12, 2006 Letter from Martin Tracey in response to January 10, 2006 letter from Wade McKinney January 12, 2006 Letter to Wade McKinney regarding missing documents Personnel File January 20, 2006 Notice of Disciplinary Action January 21, 2006 Letter to Wade McKinney requesting earned Admin Leave pay January 27, 2006 Tracey request for Appeal of Disciplinary Action February 2006 February 21, 2006 Letter from City Clerk acknowledging receipt of Appeal letter New Times (Atascadero's redevelopment chief back at work)—March 2, 2006 "I didn't know Tracey was back," says Atascadero City Council member George Luna. "I asked, What is he doing here?" 50 Atascadero News (Marty Tracey returns to Redevelopment Agency— March 3, 2006 Excerpts from news article "Former Redevelopment Agency Deputy Director Marty Tracey quietly returned to work as a redevelopment specialist on Monday, Feb. 13, according to City Manager Wade McKinney" "He's still involved in a lot of the same [things]," McKinney said " "With Tracey removed from the deputy director position, McKinney said there are no plans to fill it. "We're still providing all the services we had with the deputy director," McKinney said." The Tribune—County Roundup— March 3, 2006 Tracey, who had been Atascadero's deputy redevelopment director, returned to work as a redevelopment specialist Feb. 13, City Manager Wade McKinney said In the new role, McKinney said, Tracey will continue performing many of the functions he did as an administrator In the new role, McKinney said, Tracey will continue performing many of the functions he did as an administrator May 2006 May 1, 2006 Claim against Public Entity submitted by Patrick Gaughan and Katherine (Sue) Gaughan New Times (Tracey demands public appeal) — May 4, 2006. Excerpts from news article The public will get a rare chance to examine the intricacies of a secretive Atascadero city staff disciplinary case During a public appeal slated for August, Marty Tracey, Atascadero's former deputy director of redevelopment, will fight disciplinary actions implemented by City Manager Wade McKinney Typically these appeals are conducted in closed seasons. But Tracey, now working as the city's redevelopment specialist, has demanded a public hearing. "I am not going to comment now, Tracey says. "It is better for the facts to come out when they will count. "I feel bad that Marty Tracey took all the blame for this when McKinney's signature is the only one on many of the threatening letters," says Pat Gaughan, who just last week submitted a $200,000 claim against the city "He was doing what he was told. He is the sacrificial lamb " 51 June 2006 Atascadero News—June 7, 2006. Excerpts from news article. "Without notice, Tracey was fully reinstated as deputy director last week, McKinney and Enright said. "Neither Enright nor McKinney said much about Tracey's return as they both said they are restricted by law what they can say about personnel issues. "He's entitled to privacy rights," McKinney said. "We've followed the appropriate personnel rules and taken appropriate action." "He's working for the city," Enright added." "Earlier this year, according to McKinney, Tracey did ask for a public appeal before the city council, but it will not happen as he was fully reinstated to his previous position " "From the beginning, [Tracey]was the sacrificial Iamb," Pat Gaughan said "I don't hold anything against him; I think he got caught in the middle. The city manager runs everything " July 2006 New Times (Atascadero leaders have something to hide)—July 13, 2006 Excerpts from news article "I would not have supported taking any property by eminent domain unless it was necessary for public safety," she [Becky Pacas] said." "I am not a fan of eminent domain, and don't think I would have voted for it," said Councilman Jerry Clay "I am in favor of letting the market take care of itself" "I believe Tracey was the sacrificial Iamb in an attempt to protect McKinney and the city council from scrutiny," said Pat Gaughan, who received the eminent-domain phone message that set off this whole chain of events " September 2006 September 4, 2006 Marty Tracey letter to City officials requesting to be reimbursed for his legal fees Auaust—September 2008 Atascadero News—August 29, 2008: Excerpts from news article 52 "The Gaughans' suit further claimed that the city's conduct caused them to lose their lessee, Landis Automotive, and suffer a "significant reduction"to the property's value In addition the suit said the Gaughans had lost of the ability to develop the property"now and in the future," and would lose future rental and lease income " "In contrast, the city stated it never made an official announcement of intent to acquire the property through eminent domain and was merely engaging in planning activities. "There was never any formal resolution or discussion to initiate eminent domain procedures against the plaintiffs,"the city's response to the lawsuit said. "Within their response the city also said Tracey's message was "nothing more than a true statement intended to keep [the] plaintiffs abreast of[the] city's interest in their property " The Tribune–September 8, 2008 Excerpts from news article. "Atascadero has settled a two-year-old lawsuit that claimed key city officials conspired to force the sale of a downtown property through eminent domain proceedings. The claim was one piece in a web of allegations made against city staff by the Gaughans, who accused Deputy Redevelopment Director Marty Tracey in 2005 of threatening them with potentially costly litigation if they refused to sell their downtown automotive repair shop at 6040 EI Camino Real to a private developer The Gaughans' building, which sits across from the Carlton Hotel in downtown Atascadero, is in the city's redevelopment area. It is now a motorcycle shop" "The accusation led the City Council to unanimously call for Tracey's resignation— circumventing a lengthy process by which city staff members targeted for discipline or termination can argue their case before the council or a state-appointed mediator The council, which initially characterized Tracey as a rogue employee, later reversed the decision after then-City Attorney Patrick Enright determined it exposed Atascadero to a potentially damaging lawsuit. Tracey was cleared of wrongdoing and returned to work." "In August 2007, Tracey filed a separate claim against the city, claiming that it should pay for all his legal fees. In a second claim, filed in October of that year, Tracey accuses the former City Council and City Manager McKinney of various charges, including age discrimination, wrongful termination and violation of whistle-blower statutes designed to protect employees who report administrative wrongdoing from retaliation. The claims filed by Tracey have not yet been resolved." The Tribune–September 23, 2008: Excerpts from news article "Tracey became embroiled in the lawsuit when downtown business owners Pat and Sue Gaughan accused the city of conspiring to force the sale of their property The accusation led the City Council to unanimously call for Tracey's resignation— 53 circumventing a lengthy process by which city staff members targeted for discipline or termination can argue their case before the council or a state-appointed mediator" "The council, which initially characterized Tracey as a rogue employee, later reversed the decision after then-City Attorney Patrick Enright determined it exposed Atascadero to a potentially damaging lawsuit. Tracey was cleared of wrongdoing and returned to work." "In the City's investigation of this matter, it was found that Mr Tracey did not threaten the Gaughans or treat them inappropriately," said the City Manager Wade McKinney in a press release Monday " "The claim was one piece in a web of allegations made against city staff by the Gaughans, who accused Tracey in 2005 of threatening them with potentially costly litigation if they refused to sell their downtown automotive repair shop at 6040 EI Camino Real to a private developer" Atascadero News—September 24, 2008. Excerpts from news article "I know that the city of Atascadero used my conduct and my work product to defend itself in the Gaughan's case," Tracy said, adding that while the city initially attempted to portray him as a rogue employee, the Gaughans were making public statements of their belief that Tracey was being made into a scapegoat." "A letter from the Gaughans to Tracey, cited in the city's release, said as a result of the investigations and discoveries in their own case they now believe that Tracey, "did not engage in any improper, fraudulent or misleading conduct concerning us and our property " "In all our dealings with you from April 2004 to the present you were always courteous and professional," the letter said " "Tracey said he has not received an apology from the city adding that while an apology would be nice, he would rather recover all of the money he has spent on legal fees." "That would be a whole lot more meaningful because I don't think these guys are sorry about a thing," he said." 54 Exhibits KRONICK ©ar Exmrr 3 MOSKO Y 1TZ Depon}entf"' rjrj�� TIEDEMANN �,e t bg Rptrx GIRARD D� M A PRGYE=0ML OONMRKDOi r MEMORANDUM ATTORNEY-CLIENT PRIVILEGE TO Honorable Members of the Redevelopment FILE NO 113351 Agency Board Wade McKinney, Executive Director Martin Tracey, Deputy Executive Director FROM Patrick Enright & William Chisum DATE February 15, 2005 RE Summary of the Condemnation Process Introduction The Atascadero Redevelopment Agency ("Agency") is interested in potentially acquiring property presently used as an automobile repair shop It is our understanding that the property owner has, thus far, been unwilling to consider a sale of his property Consequently, the Agency may ultimately need to condemn the property if it decides to proceed with the acquisition. It is also our understanding that the Agency has conducted a Phase I environmental analysis but still needs to conduct a Phase lI analysis and have the propeay appraised. The owner has been unwilling to allow access to the property for this testing and appraisal inspection This memorandum first addresses the immediate concern of access to the property As discussed, the Agency has the ability to obtain court ordered access for testing and appraisal purposes After it reviews the Phase II and appraisal results, the Agency may decide to proceed with acquiring the property including, if necessary, a condemnation of the property This memorandum therefore generally summarizes the process for instituting and litigating an eminent domain action. For your information, 1 have attached a step-by-step overview of the condemnation process Finally, this memorandum generally discusses the relocation advisory assistance and payments which the Agency must provide to a displaced business Procedures to Gain Entry on Property Code of Civil Procedure section 1245 010 provides that "any person authorized to acquire property for a particular use by eminent domain may enter upon the property" to make studies, surveys and tests If the owner does not consent to access, we can apply for a court order allowing access After a hearing on the application, the court can grant access upon such terms and conditions as the court deems appropriate. The process of obtaining an order usually takes only a couple of weeks. Prior to access,, the court may order the Agency to deposit funds sufcient to cover actual damages or interference with possession and use of the property If actual damage or interference occurs, the owner can request the court award it some, or all, of the deposit If there are no damages or interference, the Agency will get the deposit back 189825.2 Meme Page 2 Assuming the Agency Board and staff wish to proceed, we can file the necessary petition with the court and request a hearing. In preparing the petition, it would be helpful if staff could provide the following information. I The name of the property owner 2. The specific location of the property and its APN number It would be helpful to get the general size of the property as well as a map showing the general property location. This could simply be a copy of the relevant assessor's parcel map 3 The purpose of the potential acquisition of the property 4 The reason why access is required including the nature of activities to be performed on the property, who will access the property (for example. Agency personnel or a consultant), and the nature of any equipment that will be used on the property (such as drilling rigs, vehicles, survey equipment, etc.). This information will allow the court to understand exactly what the Agency intends to do on the property 5 When the Agency would like to access the property and the duration of such access 6 Is there any possibility of the property being permanently altered or damaged duc to the on-site activities? The access statute requires the Agency to post a bond to cover any damages to the property Thus, if possible, we need to explain to the court why the property will not be damaged and no bond should be required 7 Any details regarding conversations with the owner including any letters sent to the owner seelang access. It would also be useful to know any reasons given by the owner for denying access. 8 The name of the appraiser and/or consultants who will access the property so that we can obtain a declaration from them regarding their need for access Assuming a court order is required, we recommend seeking access for both the appraisal and Phase H analysis at the same time Additionally, prior to any court order, it might be useful for flus office to send out a final letter to the owner Property owners often agree to access once they receive a letter from an attorney demanding access and advising the owner that the Agency can and will seek court ordered access absent voluntary agreement Eminent Domain Acquisition Procedures Prior to actually filing an eminent domain action, the Agency must take certain preliminary steps. For example, the Agency must complete an environmental review of the project as required by the California Environmental Quality Act ("CEQA") The Agency must obtain a title report for the property to verify ownership The Agency must obtain a legal 799R25.2 3 A Memo Page 3 description and map of the property it seeks to acquire. The Agency should also confirm that the acquisition will be for a"public use", and that sufficient hinds exist for the acquisition In advance of acquisition, the Agency must have the subject property appraised The Agency is required to give the owner.notice of the appraisal including an opportunity to view the property with the appraiser Based upon the appraised value, the Agency must make a written offer to the owner Assuming litigation is necessary, California law requires the Agency Board to adopt a "resolution of necessity" finding both that the underlying project is in the public interest and that acquisition of the property is necessary for the project. Additional findings and consultation with counsel is required if the Agency will not use the property within seven years, the property is already being used by a public entity or the property is outside of the Agency's boundaries The owner must be given advance notice of his or her right to appear at the resolution of necessity hearing and comment upon its adoption Upon adoption by a 2/3 vote, the resolution authorizes commencement of litigation. Litigation begins with the filing of the complaint Once the complaint is filed, the Agency can, but is not obligated to, seek a court order authorizing possession of the property on a shortened time frame. A court will typically allow possession thirty days after serving the order of possession for vacant property but this period is typically ninety days for property occupied by a residence, business or farm. Prior to obtaining possession, the Agency must deposit the amount of probable compensation, as determined by its appraiser with the State Treasurer Regardless of whether the Agency seeks an order of possession, the Agency shoul(i deposit the amount of probable compensation with the State Treasurer immediately upon fihr,g the eminent domain action. Making such a deposit allows the Agency to lock in the date i i valuation as of the deposit date pursuant to Code of Civil Procedure section 1263 110 Absent a deposit, the valuation date is based upon the complaint s filing date if trial occurs within one year of filing or otherwise valuation occurs as of the trial date Since trial is unlikely to occur within one year, the valuation date would presumably be the trial date absent a deposit Once the Agency makes a deposit, the owner is free to withdraw it The owner can also seek a court order requiring an increase in the deposit upon showing the amount of deposit is inadequate. However, if the owner does withdraw any portion of the deposit, the owner waives all challenges to the taking except for the amount of compensation Upon possession by the Agency the owner is entitled to the payment of interest on any funds not withdrawn The actual trial will probably not occur for at least one year after the complaint is filed and perhaps substantially longer Recent revisions to eminent domain law essentially require that the trial not occur until at least one year after filing, and a backlog of court cases also tends to delay trials. During the intervening months, the parties conduct discovery and depose the various witnesses and experts. Since the subject property contains a business, the owner will likely seek compensation for both the taking of the property and a loss of business goodwill If the owner seeks compensation for loss of goodwill, the Agency will need to obtain a secon" appraisal of the business' goodwill value prior to trial 789825.2 Memo Page 4 The court will probably schedule a settlement conference at some point during this process. The parties are also free to attempt to voluntarily resolve the matter Assuming no resolution, the court will ultimately resolve any legal disputes, including challenges to the Agency's right to take the property Unless waived, a fury will determine the amount of compensation and any other damages. The fury will determine the value within the range established by the Agency s and the owner's appraisers. The judge will then enter a final judgment. Once the judgment becomes final, the Agency will have thirty days to pay the judgment plus court costs and interest The court may also award the owner its attorney fees. In determining whether to award fees, the court will evaluate the reasonableness of the Agency s final offer, made shortly before trial, in relation to the jury's verdict. At any time during thi process and up to thirty days afier the judgment becomes final, the Agency can abandon tl.e condemnation proceedings. Upon abandonment, the Agency must pay the owner its costs and fees Ager the Agency satisfies the judgment, and assuming no appeal, the court will enter a final order of condemnation. Once recorded, this final order will formally transfer title to the Agency Relocation Assistance and Payments Aside from paying compensation for any property taken, the Agency must provide relocation assistance and payments when its actions displace a person or business. The Agency s relocation obligations are contained in the Government Code at section 7260, et seq , and in title 25 of the California Code of Regulations at section 6000, et seq These obligations includ helping the business obtaining and becoming established in a suitable replacement location Prior to proceeding with any phase of a project, which will result in the displacement of a business, the Agency must make various preliminary determinations including that fair and reasonable relocation payments will be provided, a relocation assistance program will be provided, and eligible persons will be informed of the relocation assistance program and it, benefits Early in the planning process, the Agency is required to consider relocation advisor- assistance issues such as determining the needs of the displaced business and obtaining information on the availability of suitable locations to relocate the displaced business Eligible persons shall be informed of the availability of relocation assistance and benefits within 60 daye of initiation of negotiations for the acquisition of the property and no later than the close of escrow on the property In addition to the advisory assistance, a displaced person, including one engaged in a business, may be entitled to payment of various expenses. For example, the business can recover actual and reasonable moving expenses including costs of personal property lost due to moving; or discontinuance of the business, costs for removing, modifying, reconnecting and/or reinstalling equipment, permit or license fees, and fees for professional services. In addition to moving expenses, a business is entitled to reasonable and necessary reestablishment expenses not to exceed $10,000 A business can also receive costs, not to exceed $1,000, incurred m 789823.2 3 -� Memo Page 5 searching for a relocation site. Alternatively, a displaced person may be eligible for, and elect to receive, a lump sum payment based upon the average annual net earnings of a business and in an amount between $1,000 and $20,000 Thus,based upon these requirements and prior to any acquisition, the Agency must make a determination that the required assistance and benefits will be provided, and it must notify the owner of his potential right to assistance and benefits The Agency must also be prepared to survey both the relocation needs of the owner and the available resources to meet these needs. Finally, the Agency must be prepared to meet any financial obligations imposed by the relocation provisions. Please let me know if you have any questions or require any additional information 789X25.2 i 3- 5 Marty Tracey From Wade Mckinney Sent: Tuesday March 22 2005 9.47 AM To Marty Tracey Subject: RE. Gaughan I am very glad to see the eminent domain is headed forward, I think this is the real answer From: Marty Tracey Sent: Tuesday, March 22,2005 6.56 AM To: Wade Mckinney Subject: Gaughan Wade The Gaughans did not respond to Bill Chisem's letter requesting access for an appraisal and phase II work. He will be headed to court in a couple of weeks In other Gaughan news, I heard that they listed with Century 21 and spoke to Roberta Fonzi who confirmed I told her about the possibility of doing a mixed use low/mod senior project at the site, and that this scenario is the only of which I am currently aware that could work under a long term lease She said she would talk to Sue Gaughan Marty 11qC �' CI Al _ {ar s I C ATA C.A ER CITY C U 1 A V LEIMonday, October 31, 2005, 12 00 1r nx Atascadero Pavlhon ole the Lake 9315 Pismo Ave., At.astadero CLOSED E IO I Public Comment CLOSED SESSION 2 Call to Order a PUBLIC EMPLOYEE PERFORMANCE EVALUATION (GOverm-neat Code, Section 54957) Title CITY MANAGER b PUBLIC EMPLOYEE DISCIPLINE/DISMISSALIRELEASF_ I Closed Session Report ADJOURNMENT The Council will adjourn to their next recl«lady ,,-h 'dt. ei meetie g STATE OF CALIFORNIA ) COUNTY OF SAN LUIS OBISPO ) CITY OF ATASCADERO ) MARCIA MCCLURE TORGERSON being fully sworn,deposes,and says: That she is Ihr duly elected C ih' Clerk of the City of Atascadero and that on Friday,October 28,2005, she caused the above Notice to he parslcJ Im the doors of the City Hall Annex,6905 EI Camino Real,Atascadero,California. MARCLA MCCL,URE TORCFRSON t N1 Cite C'lerh City of Alascn4vio City of Ataseadero Office of the City Manager To Marty Tracey From Wade G McKinney, City Manager Date November 9 2005 Subject Personnel Investigation At its regular meeting of November 8, 2005, the City Council rescinded its prior direction to me in my capacity as City Manager to request your resignation A personnel investigation has been opened into the conduct and statements attributed to you in the October 27 2005 New Times article entitled Caught in the Act The City has retained Ronald J Scholar, an attorney with the Law Offices of Kronick Moskovitz, Tiedemann and Girard to conduct an independent investigation into these matters You are directed to cooperate with Mr Scholar s investigation At your choice and own expense, you may be represented throughout this process You will continue on paid administrative leave until further notice 0 n EXHIBIT Deponent tN'� Date`B D� Rptr.�S W W W.DEP0500RcOM I &b ,