REPORT OF THE CALIFORNIA ATTORNEY GENERAL

SAN DIEGO CITY ATTORNEY MICHAEL AGUIRRE’S ALLEGATIONS OF “CORRUPTION” AGAINST SAN DIEGO MAYOR JERRY SANDERS REGARDING THE SUNROAD BUILDING PROJECT

MAY, 2008

EDMUND G. BROWN JR. ATTORNEY GENERAL TABLE OF CONTENTS

I. INTRODUCTION 1

II. THE ATTORNEY GENERAL'S AGREEMENT TO THE MAYOR'S REQUEST FOR AN INQUIRY AND COMMUNICATIONS WITH THE CITY ATTORNEY 2

III. THE SCOPE OF INQUIRY AND THE SOURCES OF INFORMATION 3

IV. FINDINGS: FACTUAL BACKGROUND 6

, A. THE PERMITTING AND CONSTRUCTION OF THE CENTRUM 12 BUILDING AND EFFORTS TO ADDRESS THE FAA HAZARD DETERMINATION 6

1. From the New Century Master Plan to Permits for the Centrum 12 Building

2. The FAA Hazard Determination and the City's and Sunroad's Responses 7 \ 3. The Reaction to Sunroad's Decision to Build to 180 Feet 8

4. The Stop' Work Order and "Weatlj.erization" Proposal 9

5. "Separate Strategies"-The City Attorney Files Suit to Bring the Building Down to 160 Feet While 'Waring Attempts a Resolution and Approves the "Weatherization" Measures 10

6. The City Attorney Pursues Criminal Investigation and Prosecution of Sunroad and City Officials 11

7. Waring's and Sunroad's Efforts to Meet the FAA Hazard Concerns and Minimize Sunroad's Losses and Any City Liability 12

8. Mayor Sanders Authorizes a City Presentation to the FAA to Address the FAA's Hazard Concerns and Supports the City Attorney's Lawsuit 12

1 9. The City Orders All Construction Halted and Sunroad Agrees to Reduce the Centrum 12 Building to 160 Feet 14

B. THE LOAN OF EXECUTIVE TED SEXTON FROM THE AIRPORT AUTHORITY TO THE CITY, SEXTON'S WORK ON THE CENTRUM 12 BUILDING AND OTHER ISSUES, AND THE MAYOR'S STATEMENTS REGARDING SEXTON'S ROLE AND WORK 15

1. The Early Sauders's Administration Questions the City's Involvement in the Airport Business and Initiates a Discussion with the Regional Airport Authority 15

2. Mayor Sanders Requests the AA's Assistance with the Sunroad Building Issue 16

3. The "Loaned Executive" Agreement for Ted Sexton to Work with the City 17

4. Ted Sexton's Work with the City on the Sunroad Building and Other Issues 17

5. The Responses of the Mayor and his Office to Questions Regarding Ted Sextou's Role in the Sunroad Building Issue 18

C. THE TIMING AND CONTEXT OF THE CITY ATTORNEY'S ALLEGATIONS OF CORRUPTION AGAINST THE MAYOR 19

V. EVALUATION: THE CITY ATTORNEY'S ALLEGATIONS OF CORRUPTION 22

A. ALLEGATION: THE MAYOR ALLOWED A CAMPAIGN CONTRIBUTOR TO BUILD IN VIOLATION OF FAA REGULATIONS AND STATE LAW 22

B. FINDINGS AND EVALUATION 23

1. The Relationship Between Aaron Feldman and Sunroad and the Mayor and His Staff 23

11 2. The Mayor's Actions and Decisions Affecting the Construction of the Centrum 12 Building 25

C. ALLEGATION: THE MAYORMISUSED PUBLIC FNNDS BY HAVING TED SEXTON LOBBY THE FAA ON SUNROAD'S BEHALF FOR THE BENEFIT OF A CAMPMGNCONTRIBUTOR 30

D. FINDINGS AND EVALUATION 30

1. The Origin and Execution of the "Loaned Executive" Agreement 30

2. Ted Sexton's Work on the Sunroad Building Matter 31

E. ALLEGATION: THE MAYORENGAGED INA COVER-UP REGARDING TED SEXTON'S ROLE WITH THE CITY REGARDING THE SUNROAD BUILDING 33

F. FINDINGS AND EVALUATION 34

1. The Mayor's Response to QuestiQns Regarding the Role of Ted Sexton Concerning the Sunroad Building 34

2. Ted Sexton's Role in the Presentation to the FAA and the Release of Documents Related to Those Activities 35

LIST OF ATTACHMENTS

1. ComprehensiveTime Line ofEvents Relatedto the City ofSan Diego'sHandling of the Sunroad Centrum 12 Building from Permit to Deconstruction

2. Letter ofJune20, 2007 fromMayorJerry Sanders to Attorney General(includingletterto editor from CityAttorneyAguirre, dated June 15, 2007)

3. Letter ofJune21, 2007 from ChiefAssistantAttorneyGeneral Dane Gillette t() Mayor Jerry Sanders

iii 4. Letter of June 22, 2007 from Senior Assistant Attorney General Gary W. Schons to San Diego City Attorney Michael Aguirre

5. Letter of July 12, 2007 from Senior Assistant Attorney General Gary W. Schons to San Diego City Attorney Michael Aguirre

6. Report of Investigation Prepared for Independent Members of the San Diego Regional Airport Authority

7. Remarks by Mayor Jerry Sanders, May 18, 2007-"City's ConductRegardingtheConstruction ofthe Centrum12 Office Building by Sunroad Enterprises"

8. Letter of May 18, 2007 from Mayor Jerry Sanders to CalTrans and FAA "Re: Compliance with FAA Notice of Hazard"

9. Fact Sheet of June 7, 2007 Re: "'Loaned Executive' Program Provides City with Invaluable Experience at No Cost Issued by the Office of the Mayor"

10. Mayor Jerry Sanders Fact Sheet of May 22, 2007 Re.: "City Attorney's Mismanagement ofHis OwnBudget"Inconsistent with City Financial Reform Efforts"

11. Transcript of City Attorney Michael Aguirre's Press Conference, June 12, 2007

12. News Release, SanDiego CityAttorneyMichaelAguirre, June 12, 2007, "Documents Obtained by City Attorney Reveal Mayor Misled Public About Loaned Executive's Role in Assisting Sunroad Enterprises Evade Federal Air N~vigation Safety Regulations"

13. ScottLewis, "Aguirre: Mayor's Corrupt," Voice ofSan Diego (June 7, 2007)

IV 14. DVD with Video Clips-Mayor's Press ConferenceofMay18, 2007; KUSI MorningNews with CityAttorneyAguirre ofMay 23, June 6 and 13, 2007; AirportAuthorityMeeting ofJune 7, 2007 (audio only); City Attorney's Press Conference of June 12,2007

v I.

INTRODUCTION

The Attorney General agreed to a request by Jerry Sanders, the Mayor of the City of San Diego, to inquire into allegations of corrupt conduct made against the mayor by Michael Aguirre, the City Attorney of San Diego. This report is the product of our inquiry and evaluation of that matter.

The inquiry commenced shortly after June 15,2007, when the San Diego Union-Tribune published City Attorney Aguirre's letter to the editor concerning the mayor's handling of the Sunroad Centrum 12 buildingproject. In August 2006, the Federal Aviation Administration (FAA) had determined that the Centrum 12 building constituted an air navigation hazard due to its height and proximityto MontgomeryField Airport, which is owned and operated bythe City ofSanDiego. Sunroad's principal and the owner ofCentrum 12, Aaron Feldman, is a campaign contributor ofthe mayor's. City Attorney Aguirre's letter to the editor charged that Mayor Sanders "engaged in an embarrassing and corrupt course ofaction," by allowing Centrum l2's construction by Feldman "in defiance ofFAA safety standards and California state law," and by employing his staff and a San Diego Regional Airport Authority executive on loan to the city to "lobby the FAA for changes to the routing ofairplanes at MontgomeryField so that the illegal building could remain, [thus], misusing thousands ofdollars ofpublic funds for the privatebenefit ofa campaign contributor," i.e., Feldman. City Attorney Aguirre additionally charged that the mayor had "engaged in a campaign of delay, deny and deceive."

This office inquired into CityAttorney Aguirre's allegations ofa "corrupt course ofaction" by the mayor, as well as his related allegations made earlier in two television news programs, an­ airport authority meeting and a press conference. Our inquiry examined not only the mayor's handling ofthe Sunroad Centrum 12 building project after the FAA's hazard determination, but the reasoning and motivation for the actions taken concerning the Centrum 12 project by the mayor, his closest advisors and other city executives, directors and managers. We also inquired into contacts about the project that the mayor and his advisors and managers had not only with Sunroad's representatives, including its attomeys, representatives and Feldman, but with the FAA, CalTtans, the City Attomey's Office, the Airport Authority, the press and the public.

As a result ofthat inquiry, we identified the relevant circumstances concerning the Centrum 12 buildingproject thatinformedthe actions bythe mayor and his administration. After detennining those material facts, we analyzed whether the mayor or his managerial subordinates undertook activities that constitute a "corrupt course ofaction" as allegedbythe cityattorneyand whetherthose activities otherwise violated the law. From our inquiry and evaluation, we conclude that the record does not support the allegations made by the city attorney against the mayor.

1 II. THE ATTORNEY GENERAL'S AGREElVIENT TO THE MAYOR'S REQUEST FOR AN INQUIRY AND COMMUNICATIONS WITH THE CITY ATTORNEY

On June 20, 2007, Mayor Jerry Sanders requested that the Attorney General conduct an inquiry and evaluation ofallegations ofcorruption made against the mayor five days before by San Diego City Attorney Michael Aguirre in a letter to the editor published in the San Diego Union­ Tribune. Attachment 2. On June 21,2007, this office informed Mayor Sanders that the Attorney General agreed to investigate the city attorney's allegations of corruption in light of their serious nature and the importance ofmaintaining public confidence in its elected officials. Attachment 3.

Byletter ofJune 22, 2007, the Attorney General's Office infonned CityAttorneyAguirre of the Attorney General's agreement to the mayor's request and the Attorney General's reasons for that decision. In our letter, we requested that the city attorney inform this office ofhis specific charges againstthe mayor and that hespecifywhatpublic corruption formed thebasis oftheallegations made inhis letterto the editor and any other allegations ofcorruptionhemighthave concerningthe mayor. In that regard, we provided the city attorney with the Attorney General's understanding ofthe legal term "corruption" in the context ofthis matter. Additionally, this office asked him to provide the materials, documents, names of witnesses and sources of infonnation tending to substantiate his allegations ofcorruption. We infonned CityAttorneyAguirre that after receiving his response, this office would review those materials and arrange to meet with the city attorney and his staff. Attachment 4. There was no response to our letter.

On July 12, 2007, this office sent another letter to City Attorney Aguirre, requesting that he respond to our June 22 letter. Alternatively, we invited the city attorney to indicate either that he intended to make no response in the matter, or that he was withdrawing his charges of corruption against the mayor. Attachment 5. Again, this office received no response to the letter.

2 III.

THE SCOPE OF INQUIRY AND THE SOURCES OF INFORMATION

Our inquiry and evaluation centered on the allegations ofcorruption madeby City Attorney Aguirre in his letter to the San Diego Union-Tribune editor. The inquiry extended to sirnilar and related allegations made byhim during local television news programs on May23 and June 6, 2007, an Airport Authority meeting on June 7, 2007, and a press conference on June 12,2007. We considered these interrelated charges cumulatively insofar as they were sunnnarized or reflected in the Union-Tribune letterto the editor. Our intention was to ascertain all the facts relevant to the city attorney's allegatiOn that the mayor had engaged in a "corrupt course of action."

The city attorney's decision not to specifY his charges against the mayor or to identifY the natureofthe corruption alleged as requested bythis office had two consequences for ourinquiry and evaluation. First, we conducted the inquiry keeping in view the specific cpntext in which the city attorney's charges were made andthe degree to which the charges were supported byverifiable facts and sources ofinformation. The context in which the charges had appeared and the extent to which the source information supported them bore on their substance.

Second, we evaluated the facts employing the legal standard outlined in our June 22, 2007 letter to the city attorney. The Attorney General understands the word "corruption" in the present context to include illegal acts: such as bribery (Pen. Code, § 67 et seq.); conflict ofinterest (Gov. Code,§§ 1090, 1125 et seq., 87100 et seq.); misuse ofgovernment funds (Pen. Code § 424 et seq.); a breach ofapplicable city ordinances on ethics;'any act or course ofconduct that would constitute "a wrongful design to acquire or cause some pecuniary or other advantage to the person guilty ofthe act; or omission referred to, or tosome.other person" ("corruptly," as defined in Pen. Code, § 7, subd. (3)); or any course ofaction to cover-up or deceive so as to prevent discovery ofthe allegedly corrupt acts by competent officials or the public. This is an accurate and reasonably comprehensive legal defiiJition oftheterm "corruption." As such, it is one that properlymaybe applied to thepublic statements ofCityAttorneyAguirre, a lawyer and a prosecutor with executive responsibility for the city's legal affairs.

The breadth of the city attorney's allegations led us to consider the entire background of events leading up to and surrounding the construction ofthe Centrum 12 building. The events that precededthe cityattorney's allegations havebeendocumented inreports bythe city attorney(Interim Report No.17, Special Report to the City Council Regarding Sunroad Centrum 12 and Sunroad Residential Development, issued May 15, 2007), the mayor's office (Investigation Concerning the Sunroad Centrum 12 Building, issued July 19, 2007), and the press. Relevant events are also recounted in pleadings filed in the pending litigation between the city and Sunroad. We considered all these sources. The reports and pleadings largely recount factual matters based on interviews or depositions, correspondence, letters, e-mails, filings and other city and governmental records. We

3 reviewed the primarY source materials for those reports and obt;Uned hundreds of similar primary source materials. These included e-mails from city employees, interview reports from the mayor's office's investigation, and releases from both the mayor's and the city attorney's offices. We reviewed the transcript of the hearing on the motion to disqualify the city attorney's office in the criminal case ofPeople v. Thomas Story, San Diego Superior Court No. M0145l9. We reviewed reports ofcampaign contributions received byMayor Sanders and SanDiegans for CityHallReform, a measure backed by the mayor. We also obtained and reviewed pertinent video from the electronic media and press conferences conducted by the mayor and the city attorney. Attachment 14.

In addition, we obtained the Report of Investigation Prepared for Independent Members of the San Diego County Regional Airport Authority Board, a report authored by counsel for the Regional AirportAuthority. 11mt report followed inthewake ofa "criminal investigation" launched by the city attorney in June 2007 regarding his allegations that Airport Authority members and staff conspired to misuse public funds and violated the Brown Act open meeting law. The Airport Authority, which provided its counsel's report to the Attorney General's Office in October2007 to assist in our investigation, has authorized this office to release that report here. Attaclnnent 6. Events recounted in that report that are discussed herein are adopted as part ofour factual findings.

We also interviewed Mayor Sanders; Fred Sainz, the mayor's Director of Communications and Press Secretary; Jim Waring, the Deputy Chief Operating Officer for Land Use and Economic Development during the relevant time period; and Marcela Escobar-Eck, the Director of the Department of Development Services from October 2006 through August 2007. As of October 2006, Waring and Escobar-Eck were the two city officials reporting to the mayor with responsibility for matters arising from the Centrum 12 building project. Our interviews with those individuals focused primarily on the motivations and reasons for their actions with respect to the handling of Sunroad and the Centrum 12 building in light of the FAA's hazard determination.

From these and other related sources, this office prepared a Comprehensive Time Line of , .­ Events. Attachment 1. By and large, the events listed in the time line and the relevance of those events to this office's inquiry and evaluation are not reasonably subject to dispute. Itis included in this report and constitutes part ofour factual findings. The time line supplements and supports the factual narrative in the Findings (Section N).

Itshould be clear from the scope ofour inquiry and the legal standard employed in evaluating the facts that we did notjudge the public benefit or the practical utility ofthe various actions bythe mayor, subordinate city officials and employees, the city attorney and his office, the Airport Authority, Sunroad and its representatives, the Federal Aviation Administration, the California Department ofTransportation, or any other entity or party with respect to the Centrum 12 building project. Nor did we undertake an administrative performance review like the one in a July 2007 reportbythemayor's office, which criticizedvariousjudgments, d;ecisions, actions and lapses ofcity officials respecting the Centrum 12 building project.

4 Similarly, we have not made anypublic policyjudgments concerning the mayor's strategies or course of action in dealing with Sunroad, the FAA or CalTrans concerning the Centrum 12 project. In particular, we did not assess the merits or the likely outcome of the pending litigation arising from the Centrum 12 project. Sometime ago, the FAA determinedthat Centrum 12 no longer posed a hazard to airnavigation afterthe building was deconstructed to 160-foot height. Butthe City ofSan Diego faces significant ongoing legal expenses defending against Sunroad's pending cross­ claim for million-dollar damages concerning the Sunroad Centrum project. (People ofthe State of California and the City ofSan Diego v. Sunroad Centrum L.P., et aI., San Diego Superior CourtNo. GlC 877054.)

Ourevaluationfocused onwhetherthestrategyandthe course ofactionpursuedbythemayor and his subordinates were lawful, had a legitimate basis in reason, and were pursued in good faith for the public interest. Because intent and motive are crucial in determining ifpublic corruption occurred under the applicable legal standard, our investigation included an evaluation ofthe good or bad faith of the mayor and his subordinate staff who dealt with Sunroad and the Centrum 12 project.

5 IV.

FINDINGS: FACTUAL BACKGROUND

A. THE PERMITTING AND CONSTRUCTION OF THE CENTRUM 12 BUILDING AND EFFORTS TO ADDRESS THE FAA HAZARD DETERMINATION

1. From the New Century Master Plan to Permits for the Centrum 12 Building

In 1997, the San Diego Planning Commission and the San Diego City Council approved a MasterPlanand a development agreement with General Dynamics for the New CenturyProject. The project concerned the development of the site of General Dynamics's former manufacturing plant on Kearny Mesa near Montgomery Field. When approved, the Master Plan had no building height limitations because of the property's zoning designation. The approval of the Master Plan was prefacedwith an Environmental ImpactReport (EIR). TheMasterPlan, the development agreement, and the EIR were provided to the California Department ofTransportation (CaITrans). CalTrans did not provide a response or interpose objections to the New Century Project.

In 1998, General Dynamics sold theproject to LRN Kearny Mesa, Inc. (Lennar Partners). In November 2000, Sunroad 4025 Partners L.P. (Sunroad) purchased the property from Lennar. Just before Sunroad's purchase, the City Council approved a zoning code update, which added a 45-foot height limitation to the commercial zone within the building site. In 2002, an amended development agreement with Sunroad, the last amendment to the Master Plan, was processed through public . hearings. The resulting zoning designation resulted in no height restrictions in the new zone.

In 2005, when the Development Services Department reviewed Sunroad's proposal for the 180-footctall Centrum 12 building, a permit plannernoted the potential conflict between the 45-foot height limit in the 1998 zoning update and the building's proposed height. The planner determined that the original Master Plan superseded the subsequentzoning change, giving Sunroad a vestedright to the prior, no-height-limitation zoning designation. The planner was unaware of airspace regulations of the Federal Aviation Administration (FAA).

At the time, cityplaimers had not implemented the October 2004 tentative Airport Land Use Compatibility Plan (ALCUP) promulgated by the Airport Authority. Had ALCUP been implemented, compliance with Federal Aviation Act regulations under 14 C.F.R. Part 77-0bject Affecting Navigable Airspace--would have been part ofthe planning and approval process for the Sunroad Centrum 12 project. Furthermore, the City Council had not adopted or incorporated the FAA Part 77 regulations into the building review and approval process provided in the San Diego Municipal Code. Also, the Centrum 12 building site was outside the then-existing Montgomery Field Airport Influence Area (AIA).

6 On September 16, 2005, Sunroad submitted the building permit application for the Centrum 12 building project, with a proposed height of 180 feet. The application was complete as of September 30, 2005.

Mayor Sanders was sworn in on December 5, 2005. Jim Waring became the mayor's Deputy ChiefOperating Officer for Land Use and Economic Development on January23, 2006. Waringhad responsibility for the city's Real Estate Assets, Development Services, Planning, Economic Development and Redevelopment Agency departments (CCDC and SEDC) and for some 750 employees within those departments.

In February 2006, the city completed its Substantial Conformance Review for Centrum 12. Building permits were issued for the Centrum 12 building on February 7, 2006 (building structnre) and February 24 (trenching and excavation). Sunroad began-construction on March 6, 2006.

2. The FAA Hazard Determination and the City's and Snnroad's Responses

The proposed height ofthe Centrum 12 building became an issue on April 3, 2006. On that date, the FAA, apparently having been alerted by an anonymous letter, advised Sunroad that it must file for an aeronautical study pursuant to its 14 C.F.R. Part 77 regulations because ofthe building's height and proximity to Montgomery Field.

Sunroad immediately notified perso1l1lel in the city's Development Services Department (DSD) of the FAA's "presumed hazard" finding respecting Centrum12. A DSD project manager directed that the matter be studied, but apparently there wa~ little follow-up on the directive within DSD. Sunroad applied to the FAA for approval to build to 180 feet. However, the FAA denied that request and issued it Notice ofPresumed Hazard onApril24, 2006.

Nearly two months later on June 19, 2006, top management in DSD learned ofthe problem when the FAA alerted them ofthe action. The next day, June 20, the FAA advised Sunroad and, by copy, DSD managers, that it would issue a Determination ofHazard in 60 days absent changes to the building's plans. Sunroad immediately informed the FAA and DSD that it would halt construction at 160 feet (a height within the FAA's Part 77 standards) while it studied the problem. Sunroad also filed an aeronautical study request with the FAA advising it that the building would be 160 feet. On June 23, DSD managers requested their legal adviser, Deputy City Attorney David Miller, to research the issue and to provide a legal opinion. On June 27, the FAA issued a determination ofno hazard for the building at the 160-foot height. When so advised, DSD senior . management copiedthe infornlation bye-mail onJune29 to JimWaring, his first notificationhaving. to do with the Centrum 12 building. On July 1,2006, Centrum 12 construction had reached an 82­ foot height, and the city issued its final building permit for the project, which was for the interior construction.

On July 26,2006, Sunroad's counsel advised the city and the FAA that it intended to build Centrum 12 to 180 feet pursuant to its pennit. Indeed, Sunroad advised that construction had reached 180 feet. Within tllat same week, Gary Halbert, the Director ofDSD, contacted DCA Miller

7 and learned that the previously requested legal research on building Centrum 12 to 180 feet had not been completed in light ofthe issuance ofthe city's permit and the FAA's no hazard detennination. (DCA Miller apparently had not pursued researching the matter after Sunroad indicated in June that it would not build above 160 feet.) On August 7, 2006, DCA Miller advised DSD managers that the city could legally order a halt to construction under a nuisance theory. The next day, August 8, the building was topped out at 180 feet. On August 11, DSD managers and DCA Miller met with Sunroad,representatives and its counsel to discuss air space issues with respect to the Centrum12 building and two other buildings that Sunroad planned to construct in the area. A similar meeting ) took place on September 5, 2006.

3. The Reaction to Sunroad's Decision to Build to 180 Feet

On September 14, 2006, CaITrans became a party to the controversy by advising Sunroad, DSD and the city attorney's office, that the building violated state law because it required a state permit in light of the FAA Part 77 height issues. Sunroad immediately objected to CaITrans's position, but thereafter applied to CaITrans for a state pennit.

On October 4,2006, Marcela Escoba,r-Eck became Director ofDSD, filling the vacancy left by the retirement ofGary Halbert, who had departed in August. (Halbert's departure was unrelated to the Sunroad project.)

On October 12, Mike Tussey, the city's Deputy Director ofAirports, advised Jim Barwick, Director ofReal Estate Assets, and Jim Waring, that the Airport Advisory Committee had voted the previous day to advise Mayor Sanders to support CalTrans in withholding a pennit for the Centrum 12 building to stand at 180 feet. This was Waring's first notice ofa problem with the Centrum 12 building. Waring began advising the mayor about the issue soon afterward. Mayor Sander's initial direction to Waring was to be certain that no Sunroad-proposed buildings in the project area were approved or pennitted without compliance with FAA regulations.

On October 16 and 19,2006, DCA Miller advised Waring in writing that Centrum 12 was illegal and a nuisance, that the city had a duty to seek abatement, and that it should issue a Stop Work Order (SWO). Because no legal analysis had been made concerning either the city's possible liability if an SWO issued or the effect of the FAA's hazard determination, Waring had no confidence in that advice. Approximately a week later, on October 25, DCA Carmen Brock sent an e-mail to Waring and Escobar-Eck questioning why an SWO had not issued. The same day, an e­ mail exchange ofsome importance occUlTed between Waring and DCA Miller, which was copied to Escobar-Eck, other DSD managers and other attorneys in the city attorney's office, including Assistant CityAttorney Karen Huemann. Inthat e-mail exchange, DCA Miller stated that Sunroad needed a pennit from CalTrans and a no hazard determination from the FAA and that in the meantime, the city should issue an SWO.

Waring responded with an outline ofwhat became his and the mayor's strategy for the next seven to eight months in dealing with Sunroad and the Centrum 12 building in light ofthe concerns expressed by the FAA and CalTrans:

8 First of all I want to say no one at DSD is an advocate for Sunroad. The appropriate process needs to be followed and we support that effort. What is hard here is that CalTrans was given the notices required by law as part of the project review. They did not respond. [~ A pennit was issued that followed all of our city's rules and regulations. [~ Now with the owner having spent millions ofdollars someone raises an issue ofheight-putting the City of San Diego in the middle of a problem we did not create and exposing the ownerto millions ofdollars in damages. Who is a[t] fault here? What are the rules when an agency with notice does not respond or express concern and our city and a private party relies on the process? What would be the position ifthe FAA first raised this issue after the building is opened and occupied? The same? Is there a difference when it is topped out? [~ DSD will follow the orders from your office. We want a specific instruction to issue the stop order you want and your assurance of the city's legal position on liability. Clearly a lawsuit will follow, which ofcourse cannot drive our policy decisions. [~ But why not have the state DOT [CalTrans] go to court and seek the order? [~ We could as a city then follow it. In other words for the city of San Diego aren't we better served following a court order than responding to an administrative request from an agency that alreadymissed the proper time to become involved? Ifthe law and rights are so clear it should be easy for the state to get such an order. Certainly helps our city. [~ As for talking to the owner, I respectfully suggest that as government and regulators it is always helpful and important to speak directly with impacted parties to clear the air, identify areas of agreement and . disagreement and hopefully design an acceptable and non-adversarial approach to a solution.

4. The Stop Work Order and ''Weatherization'' Proposal

On October 27,2006, Waring responded to an e-mail from CalTrans stating that the building was illegal. Waring'asked ifCalTraris was seeking an SWO and would assume liability ifthe city issued it. Waring copied the e-mail to DCA Miller and Escobar-Eck. Nonetheless, that day, the city (DSD) issued an SWO to Sunroad. The order to stop work encompassed Centrum l2's top two floors with a height of17 feet, which was later modified to the top 20 feet. Wariug's view was that the SWO was essentially meaningless and did not subject the city to any liability because the building was already at 180 feet and no work was being done on the top two floors ofthe building at that time.

OnNovember21,2006, SunroadrepresentativeTomStorywroteto the city'sChiefInspector for pe=ission to work on Centrum l2's top 20 feet in order to seal the building and to prevent weather damage to the lower floors. The following week, city land use and city attorney representatives metwithSunroadrepresentatives to discuss this so-called"weatherization"proposal. On December 1, City Attorney Aguirre personally sent a memo to Waring advising him not to change the SWO, i.e., not to allow the "weatherization" measures. On December 4, Waring

9 responded bye-mail to Escobar-Eck and DCA Miller, stating that with respect to Sunroad's '.'weatherization" proposal, he was attempting to minimize the city's liability and prevent a lawsuit. Waring also restated his view that the FAA or CalTrans should commence litigation to enforce their rules, adding, "I want us to remain spectators, not actors, in this." DCA Brock irmnediately responded that the city attorney had directed that no changes were to be made to the SWO and that the city attomey was working with CalTrans to "abate the nuisance."

5. "Separate Strategies"-The City Attorney Files Suit to Bring the Building Down to 160 Feet While Waring Attempts a Resolution and Approves the "Weatherization" Measures

On December 15, 2006, the city attorney filed a civil nuisance action against Sunroad, seeking to have the building lowered to no more than 160 feet. The same day, Waring e-mailed City Attorney Aguirre, with copies to'DSD managers, the mayor's closest advisors and Rorme Froman, the city's Chief ofOperations. Waring told the city attorney that he shared the latter's concern for public safety, but did not "understand the tactics you are taking toward the Sunroad project," adding that there was asolution (proposed by Sunroad"s counsel in a letter on December 1) "that can be reached consistentwithFAA standards and,the interest ofthe aviation cormnunity." Waringpledged DSD's cooperation with the city attorney, but asked in reference to the city attorney's repeated demands for DSD documents and employee interviews that those demands be coordinated through senior management. Waring closed by asking the city attorney to contact him directly for the facts concerning Sunroad "and the current plan to try and resolve the currently unacceptable situation."

The city attorney did not respond to Waring's e-mail and adhered to ,a strategy to bring the building down to 160 feet via the lawsuit. Eventually, the city attorney brought criminal investigation and prosecution pressures, or the threat thereof, to bear on Sunroad and on those city officials·whom he viewed as working with Sunroad toward a solution other than the "160 foot solution."

Onthe otherhand, withoutadditional notice to or consultation with the cityattorney, Waring pursued an apparent strategy of trying to resolve concerns about Centrum 12 by the FAA and CalTrans, while seeking to minjririze the city's potential liability from suit by Sunroad in the event that deconstruction to 160 feet or other significant alterations to the building were imposed or required. In the days following December 15, 2006, Escobar-Eck consulted at Waring's direction with city building officials and inspectors regarding Sunroad's "weatherization"proposal, without further consultation or input from the city attorney's office. The Chief Inspector advised Escobar­ Eck that the proposals were reasonable and necessary to protect the building's lower floors.

At this time, Sunroad principal Aaron Feldman was in contact with Waring and requested a meeting with the Mayor Sanders to work out a solution in the wake ofthe city attorney's lawsuit. The mayor agreed to a meeting on December 19 in his office, where Feldman and an aide, Tom Story, met with Mayor Sanders and.Waring. At the meeting, Feldman told the mayor that the city attorney's suit could result in millions of dollars oflosses to Sunroad and that he would be forced to countersue the city to protect Sunroad's interests, a measure he said he did not want to take.

10 Feldman said his lawyer had told him that ifthe mayor wrote the FAA asking that agency to make permanent the then-existing Notice to Airman (NOTAM), which had altered the inclement weather approach pattern at Montgomery Field to accommodate the 330-foot construction crane for the building, it would solve the FAA's concerns and end the litigation. The mayor made no commitment to Feldman and ultimately refused to take that action. The "weatherization" proposal under consideration by Waring and Escobar-Eck at the time was not discussed at the meeting. , \

On December 21, 2006, Escobar-Eck sent Sunroad a letter. Itmodified the October 27 SWO to allow Sunroad to take the "weatherization" measures on the top 20 feet of the building. The permission was conditioned on Sunroadproceeding at its own risk and without any claim against the city. Waring and Escobar-Eck were motivated, Waring later stated, by the concern that a possible consequence ofthe litigation was "one day, the citycould own that building," and thus the two aimed to minimize the city's liability and damage to the remainder ofthe'building. On January 19, 2007, CalTrans wrote to Waring that the city's failure to enforce the original SWO, i.e., by issuing the December21 letter allowing the "weatherization"measures, allowed constructionthat violated state law. Waring responded on January 23, 2007 that Centrwn 12 was not in the AIA, the building was already at 180 feet, the SWO modification would not change that fact, and the city could not order the building lowered in light ofthe city attorney's lawsuit.

6. The City Attorney Pursues CriminalInvestigation and Prosecution ofSunroad and City Officials

CityAttorneyAguirre conducted a press conference at the site ofthebuilding onJanuary23, 2007. He announced that he was asking the United States Attorney to open a criminal investigation into the constructionoftheCentrum12 building, and suggestedthatboth Sunroad executives and city officials should be targets ofthe federal probe and "an aggressive prosecution." The United States Attorney apparently never acted on the city attorney's,call for a federal criminal probe and prosecution.

On January 30, 2007, DCA Kimberly Urie sent a letter to Aaron Feldman giving notice to Sunroad of a criminal nuisance (pen. Code, § 373, subd. (a» with respect to Centrum 12. In February 2007, Sunroad 'filed a cross-claim in the city attorney's nuisance action, seeking $40 million in damages from the city for inverse condemnation ofthe building. OnMarch 21, 2007, the city attorney obtained a warrant to search Sunroad's offices in an investigation of Tom Story, a _Sunroad executive and ex-chief of staff for fonner Mayor Dick Murphy, and of others unnamed-presumably city officials in DSD-for conspiracyto violate San Diego Municipal Code provisions regarding lobbying activities by fonner city officials. On March 29, after the San Diego Police Department and other law enforcement agencies had refused to serve the search warrant, the issuing superior courtjudge ordered tlle warrant and the supporting affidavit unsealed. On April 3, • 2007, the city attorney nevertheless filed misdemeanor charges against Story for violation of the city's lobbying ordinances. On May 8, 2007, a superior courtjudge ordered the city attomey and his officerecused from the Storyprosecutionbasedon a finding, among others, thattlle cityattorneyhad personally attempted to use the criminal process to advance the civil case against Sunroad:

11 7. Waring's and Sunroad's Efforts to Meet the FAA Hazard Concerns and Minimize Sunroad's Losses and Any City Liability

From February through May 2007, Waring pressed the effort to satisfY the FAA's safety concems prompting its hazard determination and to minimize the costs to Sunroad in order to lessen or eliminate any financial liability by the city. This effort had begun in early December 2006, when Sunroad's counsel first proposed an operational resolution to the FAA's concerns and Waring had DSD staffstudythe proposal. Inaddition, on February 15, 2007, Waring, Ronne Froman, and Mike Tussey met with CaiTrans officials Jeff Brown and Pedro Orso Delgado to discuss airport issues, including Sunroad, and to "clear the air" with CalTrans over tIle city'~ position.

On April 25, 2007, Feldman wrote to Waring with an offer to dismiss the Sunroad litigation against the city as consideration for the city's dismissing its nuisance action and assisting Sunroad in obtaining a lifting ofthe FAA's hazard determination. Feldman offered to lower the building by 18 feet by removing the "wing" element ofthe building, in an effort to comply with FAA Part 77 requirements, and to fund an instrument approach for one of the Montgomery Field runways. Apparently, however, the proposal was rejected by the FAA as inadequate to meet its safety concerns.

In early May 2007, Sunroad's counsel, Steve Strm{ss, called Waring to propose a second solution. That solution called for lowering the building to 166 feet 3 inches to address the FAA hazard determination, releasing the city from all liability, and securing a dismissal of the 'city­ Sunro~d litigation.

8. Mayor Sanders Authorizes a City Presentation to the FAA to Address the FAA's Hazard Concerns and Supports the City Attorney's Lawsuit

About the same time that Strauss proposed the second solution to Waring in early May 2007, City Attorney Aguirre, according to Mayor Sanders, asked that the mayor attempt to settle the Centrum 12 building controversy, saying "We want to be seen as problem solvers." The mayor subsequently met with Jim Barwick, Director of Real Estate Assets, and Ted Sexton, an executive on loan from the Airport Authority to work on the city's airport issues. (See Part N.B.) The meeting was held to discuss a possible solution for Centrum 12 to be presented to the FAA. Sexton and Barwick had been in contact with the FAA and discussed a proposal to solve the building's height problem. Thatproposal would have entailed changingthebadweather western approach from circling north nearthe Centrum 12 buildingto circling south-aroute already approved bythe FAA. After meeting with the mayor, Barwick and Sexton contacted Bruce Laird at the FAA. Laird agreed to meet with them to discuss the city's version of Strauss's proposal.

On May18, 2007, the mayor held a press conference with CityAttorneyAguirre. Themayor made these points:

• FAA and CalTrans had determined that the Centrum 12 building was a hazard at 180 feet and Sunroad had built to that height in defiance

12 ofthe applicable regulations and statutes.

• DSD and the city attorney failed to respond in a timely fashion to the concerns oftheFAAand CalTrans andthemayorpersonallyaccepted responsibility for these failures and admitted that mistakes were made.

• The mayor stated his support for the city attorney's lawsuit to lower / the building to 160 feet.

• The mayor was directing DSD to infonn Sunroad that the city was requiring strict observance ofthe October 27 SWO, meauingno work on the top 20 feet of the building.

The mayor had directed Chief Operating Officer Froman to investigate the pennitting process for the Centrum 12 building and to recommend refonns.

• The mayor was sending a letter to the FAA and CalTrans regarding a proposal being discussed with the FAA to addre~s the FAA's safety concernslhazard detennination regarding the building.

Attachment 7.

That same day, May 18, Mayor Sanders sent a letter to the FAA and CalTrans which maae these representations:

• The mayor took responsibility for the city's failure to stop Sunroad from building to 180 feet.

• The mayor outlined a proposal previously discussed with the FAA to (1) reduce the height ofthe building to 163 feet with the exception of the mechauical equipment enclosure, comprising 15 percent of the overall roofline, which would reach 180 feet; (2) work with the FAA to discontinue circling instrument approaches north of the field and allow aircraft to circle south; (3) modify visual course rules to ensure aircraft remain clear ofthe building; and (4) work with Sunroad and the FAA to fund and install a straight-in instrument approach procedure to one of the runways.

• The mayor advised that (1) the October 27 SWO was being reinstated; (2) he was supporting the city attorney's lawsuit; and (3) he was directing an investigation into the city's response to building at 180 feet.

13 According to the mayor's aide, Fred Sainz, just before the press conference, the mayor's letter to the FAA and CalTrans was provided to City Attorney Aguirre. He read it and remarked that "this is great." The mayor directed copies ofthe May 18 letter be sent to the City Council, the city attorney, Ronne Froman, Waring, Escobar-Eck and Barwick. Attachment 8.

In the following days, Sexton communicated with Sunroad representatives to refine a presentation to the FAA. That presentation detailed the city's proposal as outlined in the mayor's May 18 letter. On May 22, Barwick and Sexton traveled to Fort Worth, Texas to present the city's proposal to FAA staff, including Kevin Haggerty, an official from Washington, D.C. Barwick and Sexton believed the proposal was well received. However, the FAA responded that it would not support any intrusion above 160 feet unless the airspace around the Centrum 12 building was totally cleared. That would require the cityto institute an exclusive bad weather landing pattern that would take aircraft south ofthe field.

On May 31, 2007, Mayor Sanders met with Sexton, Barwick, and Waring, his senior advisers Kris Michell and Fred Sainz, and Alan Bersin, Chairman of the Airport Authority. The mayor decided that he could not endorse the flight path changes proposed by the FAA to clear the airspace over the Centrum 12 building. He later explained in a memo to the City Council on June 11 that the exclusive bad weather landing pattern would increase air traffic over the residential area of Serra Mesa, unfairly burdening its residents, and undermining the city's lawsuit against Sunroad. The mayor decided that the only solution was reduction ofthe building's height to 160 feet.

On June 18,2007, City Attorney Aguirre wrote Kevin Haggerty at the FAA, advising him, . that the citywas notrequesting the FAAto modifY its August 2006 hazard detennination. Soon after, Haggerty advised Waring that the FAA did not intend to change that dete=ination.

9. The City Orders All Construction Halted and Sunroad Agrees to Reduce the Centrum 12 Building to 160 Feet

On June 19,2007, the city attorney sent a memo to the mayor and the City Council requesting that the mayor issue an SWO for all work on the Centrum 12 building. Mayor Sanders responded that he wanted advice on the legal implications of a total SWO and that he was requesting advice from outside counsel, Latllam & Watkins. On June 20, the city attorney in another memo to the mayor and City Council stated that thebuilding violated state law and requested that the mayor order the building reduced to 160 feet.

On June 21, 2007, after receiving advice ofoutside counsel, the mayor directed the issuance ofa total SWO, halting all construction on the building, and issued a statement that he would work to require Sumoad to reduce the building to 160 feet. A Mitigation and Restoration Order was sent by Escobar-Eck to Sunroad directing that the building be reduced to 160 feet. On June 26, Sunroad agreed to lower the building to a height acceptable to the FAA. Deconstruction began in September 2007. On November 19; 2007, the FAA advised Sunroad that the Centrum 12 building no longer posed a hazard to air navigation.

14 B. THE LOAN OF EXECUTIVE TED SEXTON FROM THE AIRPORT· AUTHORITY TO THE CITY, SEXTON'S WORJ( ON THE CENTRUM 12 BUILDING AND OTHER ISSUES, AND THE MAYOR'S STATEMENTS REGARDING SEXTON'S ROLE AND WORK

1. The Early Sanders Administration Questions the City's Involvementin the Airport Business and Initiates a Discussion with the Regional Airport Authority

Early in Mayor Sanders's administration, senior staff discussed whether the city should remain in the "airport business" considering the city's financial difficulties and requisite core functions. Part of the discussion touched on possibly obtaining a "loaned executive" from the Airport Authority (AA) to provide expert advice and guidance similarto agreements the cityreached with the county and the port district. The AA had a legal mandate under the Public Utilities Code to assist local governments in ensuring compatible land uses in the vicinity ofexisting airports and was frustrated by a historical lack of coordination with the city relating to land use decisions surrounding city airports. The FAA itselfhad advised the AA that it was not satisfied with the city's performance in the operation of Brown and Montgomery Fields.

In March 2006, before the Centrum 12 building issue arose, ROllile Froman attended a meeting with the AA to discuss the city's position with respect to the airports. On June 7, Mayor Sanders wrote the AA with reference to prior discussions between the city and the airport authority and proposed that AA assume control ofBrown and MontgomeryFields. InAugust, the AA agreed to explore the mayor's proposal and suggested bringing in the FAA to assist in discussions of regulatory considerations under. suchan arrangement. The AA conducted a study and circulated a report internally.

Late in 2006, the city and the AA held preliminary talks about lending the city an AA executive, along the lines ofthe executive loan made by the port to the city. On December 13,2006, ROllile Froman and city staff members met with AA Executive Director Thella Brown and AA executive Ted Sexton about the Brown and Montgomery Fields proposal. At the meeting, the city suggested a "lease agreement" for the two airports placing them under the AA's control. The Sunroad building issue possibly was mentioned at the meeting as an example oftheneed for better coordination between the city and the AA. That same December, Alan Bersin became ChaiJ,man of the AA and might have had discussions with Mayor Sanders in which the mayor asked for the AA's assistance with the Sunroad building issue. InJanuary, 2007, the mayor informally asked Bersin for assistance, including a "loaned executive."

On February 2,2007, Thella Bowens sent Waring an e-mail proposing a meeting between the city and the AA staffand two AA board members to discuss how the city and the AA could work better together. The meeting held on February 12 included AA staffmembers Bowens, Sexton, and Shafer-Payne; AA board members Bersin and Watkins; and city staffmembers Waring, Anderson, and Escobar-Eck. Coordination issues and the "loaned executive" proposal were discussed. Thereafter, the "loaned executive" proposal was studied within the AA in the context ofthe agency's duty to assist local agencies on airport land use matters, rather than in relation to the Sunroad issue.

15 2. Mayor Sanders Requests the AA's Assistance with the Sunroad B~ilding Issue

On March 2, 2007, Mayor Sanders signed a letter drafted by Waring to Alan Bersin referencingonlythe Sunroadbuildingissue andrequesting assistance from theAA. Theletter stated:

The City of San Diego is involved in litigation regarding a building constructed by Sunroad Enterprises near Montgomery Field. The building is already constructed to its maximum height, although interior improvements are not complete. As mayor, my primary concern is with the safe operation of all city facilities, including our airports. For a number of reasons, my office has unfortunately been unable to get a clear analysis of whether or not the building is a safety risk to aviation, and, ifso, whether there may b.e changes to operations and notices that would eliminate that risk. While the lawyers say the lawsuitwill result in the building being lowered, the outcome ofany lawsuit is never certain, and will take many months to determine. Furthermore, the taxpayers ofSan Diego face an unknown level ofpotential liability ifthe building owner is required to lower the structure. I would appreciate and am requesting that the Airport Authority assist us in analyzing the situation and in working with the FAA and other interested stakeholders in an attempt to resolve the issue. Given the Authority's staff experience in aviation and FAA matters, your help would be invaluable in providing my office with clear and dispassionate guidance and advice. Please let me know ifthe Authority will help with this important effort.

The letter made no explicit reference to a "loaned executive."

On March 12,2007, after consulting with the AA's legal department, AA Chairman Alan Bersin wrote the mayor in response: I Thank you for your letter dated March 2, 2007 in which you request assistance from the San Diego Regional Airport Authority to help resolve issues surrounding the Sunroad Enterprises building near Montgomery Field. In our role of addressing long-tenn transportation needs ofthe region,. Airport AUthOlity staff is already working with City of San Diego staff to identifY the best approaches for achieving the highest use of air transportation infrastructure in the region. We believe it is in everyone's best interest to understand how other airports might play into meeting the future needs ofthe travelingpublic. At the same time, we are fully cognizant ofthe importance ofprotecting both public health and safety near all of the county's airports as well as airport operations. With that in mind, we are more than glad to provide the assistance you requested. The President/CEO ofthe Airport Authority, Thella Bowens, will assign our highest level executive with the necessary expertise on these issues to work with the City. She will also identifY with City staff a scope of work and appropriate procedural

16 Issues. Ms. Bowens can be contacted at ...

Bersin's letter was copied to all members ofthe SDCRAA Board.

3. The "Loaned Executive" Agreement for Ted Sexton to Work with the City

An MOD executed by ThelIa Bowens for the AA and by Ronne Froman for the City on March 31, 2007 provided for the "Executive Loan of Services of Airport Employee Theodore ("Ted") Sexton." Itincluded broad language concerning Sexton's duties. Attached to the MOD was a 15-itemlist entitled "Scope ofServices." While issues related to the Sunroad building were listed, no specific mention of the Sunroad project appeared in the agreement. Attachment 6, Exhibit 11.

As the AA counsel's Report reflects, AA executives viewed the executive loan to the city as an "operational decision," not a "policy decision," based on ThelIa Bowens' consultation with legal staff. Consequently, AA Board approval ofthe executive loan was not sought. Attachment 6,p.3.

The mayor's office did not advise the city attorney's office ofthe MOD or seek that office's review or approval. The mayor's office maintains that no such review or approval by the city attorney's office was required. The mayor' office cites two similar pre-existing "loaned executive" agreements with the county and the port district, respectively, which were entered into by the mayor's office without review and approval by the city attorney's office. '

On April 11,2007, less than two weeks after the MOD's approval, AA Chairman Bersin discussed and explained the executive loan agreement at a City Council Rules Connnittee meeting. The attendees included City Council Member Donna Frye and Chief Deputy City Attorney Catherine Bradley, head of the Business & Government Section in the City Attorney's Office.

ThelIa Bowens briefed the AA Board on the loaned executive agreement on May 2,2007. Attachment 6, p. 3.

4. Ted Sexton's Work with the City on the Sunroad Building and Other Issues

Ted Sexton began the "executive loan" on April 1, 2007. He worked with Jim Waring and Jim Barwick, head of Real Estate Assets Department. In April and May, Sexton worked on proposals for making the Sunroad building compliant with FAA regulations. He worked on many other issues affecting city airport operations, including FAA Notification Requirements that were later published. A complete SunmIary ofSexton's workwiththe cityis contained in a memorandum he prepared for the AA' s counsel on June 21, 2007. It is included in AA counsel's Report. Attachment 6, Exhibit 12.

With respect to the Sunroad building, the AA counsel's Report detailed Sexton's view ofhis missIon as follows: (1) impress upon the city the significance ofthe issues implicated bythe height ofthe building and the FAA's concerns; (2) impress upon the city that the FAA was not a paper tiger 17 and could not be ignored; and (3) address the safety issues, as an aviation expert and fonner military pilot, while the building remained at 180 feet pending the outcome of the litigation. Pursuant to those mission concerns, Sexton sought to educate city regulators and Sunroad representatives, when asked to attend meetings with city staff, about the serious nature ofthe Sunroad building height issue as affecting airport operations and FAA safety concerns. Sexton made a presentation jointly to city and Sunroad officials on this specific topic. Attachment 6, p. 4.

Workingwith cityofficials, the FAA, and Sunroadrepresentatives, Sexton developed several options for the operation of Montgomery Field in light of the 180-foot height of the Sunroad building. The draft options were circulated to all stakeholders, including city officials, Sunroad representatives, and tlle FAA prior to any fonnal presentation to the FAA onbehalfofthe city. The proposal ultimately called for reducing 86 percent ofthe Sunroad building to 166.3 feet, leaving 14 percent (the elevator mechanics) at 180 feet and modifying some flight approaches to restore flight safety margins. This was the proposal in Mayor Sanders's May 18 letter to the FAA and CalTrans, which was copied to the city attorney and City Council.

As noted, Sexton was with Jim Barwick at the May 22; 2007 presentation of the city's proposal to the FAA in Fort Worth. Sexton also attended a meeting with city and FAA officials in Los Angeles regarding the flight pattern modification aspect of the proposal, and he attended the May 31 meeting where Mayor Sanders decided that there would be no changes to flight patterns and that the building must come down to 160 feet. Ultimately, the city withdrew the proposal made to the FAA. Attachment 6, pp. 4-5.

5. The Responses of the Mayor and his Office to Questions Regarding Ted Sexton's Role in the Sunroad Building Issue

On June 6 and 7, 2007, City Attorney Aguirre publicly charged that AA's loan ofSexton to the city had been improper and was solely to aid Sunroad because Feldman was a contributor to the mayor's campaign. A member ofthe press contacted the mayor's Communications Director, Fred Sainz, on June 7 to inquire about Sexton's role with the city: At the time Sainz did not know ofthe mayor's March 2 letter to Alan Bersin or Bersin's reply letter ofMarch 12-andwould not leam of them until weeks after when a reporter alerted him. Sainz responded to the press inquiry by contacting Ronne Froman, and Froman provided Sainz with various documents, including minutes ofmeetings with AA staffregarding the city's airport operations generally and the executive loan agreement. Froman evidently did not have the March exchange of letters between tlle mayor and Bersin, however. Without having spoken beforehand to Waring, Barwick, or Mayor Sanders about the matter, Sainz prepared and on June 7 issued, without consulting the mayor, a "Fact Sheet." It addressed the loaned executive agreement and outlined Sexton's general duties in assisting the city in its detennination how best to manage its airports. With respect to the Sunroad building issue, the 'Fact Sheet" stated: "Mr. Sexton was not brought on board to manage the Sunroad building issue." Attaclnnent 9.

Later on June 7, Mayor Sanders made one of his regular appearances on the Roger Hedgecock radio program. Sainz believes that he quickly briefed the mayor in advance of the

18 program concerning Sekton consistent with his "Fact Sheet." When Hedgecock raised a question during the program with the mayor concerning Sexton's role with the city and the Sunroad building issue, the mayor responded to the effect that "Sexton was not brought on with the city to work on Sunroad." When he made the statement, the mayor later explained, he had forgotten his March 2 letter to Bersin, a letter drafted by Waring that was "stuck under his nose" and signed along with scores ofother documents regularly submitted for his signature; and he had not recalled Bersin's March 12 reply letter during the radio program either. The mayor subsequently realized that Sexton had played a significant role in assisting the city on the Sunroad matter. At the mayor's next appearance on the Hedgecock program, on June 14, he admitted the error in his statement and corrected it. The mayor stated in his interview with our office that although Sexton had attended meetings with the mayor and other city staff to discuss and briefthe mayor on the Sunroad building issue in April and May, he did not really know who Sexton was on sight.

C. THE TIMING AND CONTEXT OF THE CITY ATTORNEY'S ACCUSATIONS OF CORRUPTION AGAINST THE MAYOR

Asjndicated previously, after the FAA's hazard determination, the Sunroad Centrum 12 project gave rise over time to a sharp split between the city attorney's office and the mayor's office, the principal representative ofthe latter being Jim Waring as director ofDSD. Initially, however, DSD and,the city attorney's office worked in coordination on theSunroad building height issue.

WhenseniorDSD officials flIst weremade aware oftheFAA' s concerns about thebuilding's height in mid-June 2006, they ilmnediately contacted DSD's attorney in the city attorney's office, DCADavid Miller, for advice. Miller, in tum, was in contact with and met with DSD officials and Sunroad's counsel in August and September 2006. In Miller's words, this activity was to "find a ~ way to make the situation safe" and to resolve the matter without litigation. Miller later testified at a hearing in the Thomas Story prosecution that the parties were making progress on resolving the matter.

Miller further testified in the Story case, that in mid-October, 2006, after learning of the Sunroad building situation from Deputy City Attorney Abbe Wolfsheimer Stutz, City Attorney Aguirre called DCAMillerillto his office. Millertold the city attorneythatprogress was beingmade on resolving the matter by seeing ifthe FAA would agree to an alternate plan to resolve the hazard determination. However, the city attorney told DCA Miller that the only resolution he was going to accept was the building being taken down, that he did not want Miller tb work on any resolution, and that he "would rather hear that [Miller] would take a chainsaw and go up to the building and cut it down." Miller told the city attorney that there were no irregularities or illegalities with respect to how the permits had been issued to Sunroad for the Centrum 12 building. The city attorney responded that somebody had to have done something illegal and asked if somebody at DSD was capable of"taking a bag ofmoney." Millerresponded that was bothunlikely and unnecessary since no one at DSD would need to take a bribe in order to properly issue the permits.

Shortly thereafter, in mid-October, DCA Miller and, in turn,DCA Carmen Brock, to whom Miller had surrendered his Sunroad file on orders ofthe city attorney, directed DSD to issue a Stop

19 Work Order for the building. They asserted that the building was illegal and a nuisance. Waring openly questioned this approach with Miller, Brock and other senior attorneys in the city attorney's office, fearing liability for the city. However, in two weeks' time he complied with the city attorney's direction and directed that an SWO issue for the top two floors ofthe building. Waring told us that he did not believe that action would prejudice the city because no work was being done then on the building's top two floors.

The city attorney's office discussed with DSD and Sunroad the "weatherization" proposal made by Sunroad in November 2006. As previously noted, however, City Attorney Aguirre sent a memo to Waring telling him not to modifY the SWO, i.e., to reject Sunroad's "weatherization" request. Intent on minimizing city liability by resolving the matter with the FAA and allowing the "weatherization" measures to go forward, Waring corresponded with the city attorney's office to urge that the city step back and let CalTrans press the FAA height concerns and state permit compliance issue with Sunroad. Any meaningful relationship between Waring and the city attorney's office concerning the matter ended on December 15, 2006, when Waring e-mailed City Attorney Aguirre and others to dispute the city attorney's tactics, urge a solution with the FAA, and ask City Attorney Aguirre to contact him directly. The city attorney instead sued Sunroad, asserting the building constituted a nuisance. Six days later, on Waring's direction and without further consultation or communication with the city attorney's office, Escobar-Eck modified the SWO to allow the "weatherization" measures.

City Attorney Aguirre publicly charged that Waring was "corrupt" and on January 24, held a press conference to announce that he was calling on the United States Attorney to investigate and "make an aggressive prosecution" of Sunroad representatives and city officials in connection with Centrum 12. Federal authorities made no response. In March, City Attorney Aguirre unveiled his own criminal investigation when he sought and obtained a search warrant for Sunroad's offices to seek evidence ofan alleged conspiracy between Sunroadrepresentatives and city officials to violate city lobbying restrictions, but no law enforcement agency would execute the warrant. In April, the city attorney charged SUllToad representative and former city employee, Tom Story,. with misdemeanor offenses for violating city lobbying restrictions while working for Sunroad on the Centrum 12 building and other projects. A little over a month later, a superior court judge removed the city attorney's office from the prosecution, finding that the city attorney had personally used the . criminal investigation and prosecution to attempt to gain an advantage against SUllToad in the city attorney's civil suit over the building.

By early May, the outcome of the civil litigation to bring down the building remained uncertain and the effort to generate a criminal investigation and prosecution appeared thwarted. City Attorney Aguirre urged Mayor Sanders to settle the dispute with Sunroad so "we could be seen as problem solvers," read the mayor's letter before the May 18 press conference (twice, per Sainz), and stated, "[I]t was great." The city attorney stood with the mayor at the press conference and spoke after the mayor admitted mistakes were made by the city concerning the building and announced his support for the city attorney's lawsuit. Crucially, the mayor also detailed the proposal the city was going to make to the FAA, calling for only a partial removal ofthe top 17 feet oftlle building and the rerouting ofinclement weather air approaches. As ofMay 18, it appears that tlle mayor and the

20 city attorney were in agreement over dealing with the Sunroad building issue and the city attorney was fully aware of the mayor's proposed course of action. As noted, Ted Sexton and other DSD officials afterward worked with Sunroad and the FAA to refine the proposal modifying the building and rerouting the air approaches and then officially presented the proposal to the FAA.

Fourdays afterthepress conference, however, the cityattorneyheld anotherpress conference himself. There, he asserted the mayor refused to fund 17 "supplemental" Deputy City Attorney positions in retaliation for the city attorney's May 15 report in which he criticized the handling of the Sunroad project by the mayor's office. The mayor's office immediately responded with a "Fact Sheet"refutingthe city attorney's allegations and accusing the city attorney ofmismanaginghis own budget processes. Attachment 10.

What was not publicly known was this: In his interview with this office, Fred Sainz stated that about this same time, Executive Assistant City Attorney Donald McGrath met with Fred Sainz ofthe mayor's office. ACA McGrath suggested that City Attorney Aguirre would "go easy" on the mayoroverthe Sunroadbuildingmatterifthe mayorrelented onthe "supplemental" deputypositions budget issue. Sainz declined. McGrath also told mayoral aide Kris Michell that City Attorney Aguirre would publicly accuse the mayor ofbeing corrupt in connection with the Sunroadbuilding in the absence of a concession on the plan to cut the 17 "supplemental" deputy city attorney positions. Fimilly, in his statement to this office, Mayor Sanders stated that the city attorney telephoned the mayor and asked for the budget to preserve the 17 "supplemental" positions. The mayor said, "No." The city attorney responded, "It's not going to be pretty," and hung up.

The next day, May 23, City Attorney Aguirre made public accusations against the mayor of corruption in connection with the Sunroad project.

21 V.

EVALUATION: THE CITY ATTORNEY'S ALLEGATIONS OF CORRUPTION

A. ALLEGATION: THE MAYOR ALLOWED A CAMPAIGN CONTRIBUTOR TO BUILD IN VIOLATION OF FAA REGULATIONS AND STATE LAW

City Attorney Aguirre wrote in his Union-Tribune letter to the editor:

Unfortunately, the mayor engaged in an embarrassing and corrupt course ofaction when he allowed a campaign contributor, who had raised thousands of dollars for the Sanders campaign, to construct a building near the city's airport at MontgomeryField in defiance ofFederal Aviation Administration safety standards and California state law.

Because the June 15 letter was the culmination ofcharges leveled by the city attorney over three weeks, it would be unfair to the accuser, as well as the accused, to focus exclusively on the words ofthe letter alone. Thosewords were notable onlybecause, perhaps for the first time, the city attorney actually accused the mayor ofbeing "corrupt." A complete evaluation ofthe charge must include the full breadth ofthe allegations leveled by the city attorney in the May23 ana June 6 KUSI morning news programs, the June 7 Airport Authority meeting, and the June 12 press conference. Attachments 11, 14. ~

The city attorney made the following related allegations on the two news programs, at the Airport Authority meeting on June 7 and at his June 12 press conference, leading up to the letter of June 15:

• Referring to the approval of the "weatherization" measures, the mayor was personally involved and "cut a backroom deal" with the Sunroad people.

• The mayor "allowed" the construction ofan "illegal" building which created a "safety issue" "on behalf' of someone (Aaron Feldman) who held a fund raiser for the mayor.

• After meeting with Aaron Feldman on December 19, the mayor authorized the modification ofthe SWO to permit the "completion of the building."

• Aaron Feldman, a "major contributor" to the mayor, built a building with the mayor's knowledge and assistance in violation ofthe SWO 22 and FAA hazard determination.

• "[T]here was no authority for the Mayor to take a position with the FAA to change the landing at the Montgomery Field Airport."

• "What I'm suggesting here is that there is a very deep, on-going effort to circumvent the legal requirements on behalf of the Mayor's substantial campaign contributor."

• "Misuse ofpublic funds to help someone who had violated the FAA laws."

• "The thing you have to remember is the Mayor's staffissued the 180­ foot permit on July 7th after the presumedNotice ofHazard had been issued on the 24th ofApril, after Sunroad had represented on June the 20th and again on June 22nd that they would limit it to 160."

• "A rich campaign contributor who contributes thousands ofdollars to the Mayor has been given special treatment by the Mayor and his staff. TIley were allowed to build the building in defiance ofthe FAA safety standards. They were allowed to circumvent the stop work order that the city attorney's office advised had to be put into place."

B. FINDINGS AND EVALUATION

1. The Relationship Between Aaron Feldman and Sunroad and the Mayor and His Staff

It is impracticable to attempt to identify all those among the numerous contributors to the mayor's campaign who might have had relationships with Aaron Feldman or might have made contributions at his behest. Our inquiry reflects that Feldman and individuals related to him contributed at minimum $3 ,000 to the mayor's election campaign. In addition, on October 11,2006, Sunroad Asset Management, Inc. contributed $10,000 to San Diegans for City Hall Reform. That committee backed Proposition C, a November 2006 ballot measure related to the privatization of municipal operations that was supported by Mayor Sanders. TIms, it is fair to say that Aaron Feldman was a major contributor to the mayor.

As Mayor Sanders and Jim Waring informed us, they were aware that Feldman was a significant contributor during their dealings with Feldman and Sunroad concerning the Centrum 12 building. Fred Sainz, one of the mayor's principal political advisors, told us that in- the mayor's office there is never any discussion whether a person with an issue before the city is or could be a contributor and that the mayor customarily meets with people from all walks oflife and individuals on both sides of an issue of concern to the city. (Sainz advised us that he has never met Aaron Feldman and that before the Centrum 12 building issue arose, he did not know of Feldman or

23 Sunroad. As general matter, Sainz advised us, he is unaware of whether individuals he deals with on behalf of the mayor are contributors or not.)

According to Mayor Sanders, he met Feldman to discuss the building issue consistent with his practice in all the city's business to meet with individuals on both sides ofan issue, whether he agrees or disagrees with the individual's position and regardless whether the individual is a supporter or detractor ofhis. The mayor advised us that before meeting with Feldman on December 19, 2006, Waring briefed him concerning his dealings with. Sunroad and that it did not put Sunroad in a good light. The mayor denied doing favors for Feldman or Sunroad or taking any action because Feldman and Sunroad were contributors.

Waring advised us that when he started working for the mayor in January 2006, he did not know Aaron Feldman or Sunroad. Waring did not have a favorable impression of Feldman and Sunroad and their business practices with respect to the city's regulatory and planning roles. As an example, Waring cited a bitter controversy between Sunroad and SDG&E over the relocation and allocation of costs concerning the SDG&E substation at the New Century project site, a matter in which Waring became involved in Spring 2006 and in which he eventually advised Sunroad that the city would not issue it any discretionary permits for further development until Sunroad settled. Waring stated that he had no reason or motive to assist Sunroad or Feldman. He denied any actions or decisions were taken to assist or favor Feldman or Sunroad because they were contributors to the mayor or otherwise. Waring advised that he urged the mayor to meet with Feldman consistent with the ongoing efforts at the time to attempt a resolution of the FAA hazard determination while minimizing liability for the city.

We found no direct or circumstantial evidence suggesting that the decisions and actions of the mayor, his staff, or other city officials under his direction regarding the Centrum 12 building matter had been motivated by a desire to lend assistance to Feldman or Sunroad Enterprises or that any of those decisions or actions were the result of Feldman's or Sunroad's contributions to the mayor's campaign.

Nor is there any evidence that Feldman's status as a contributor to the mayor provided him special access or undue influence, whichmaybe viewed as a form of"corruption" or the ~ppearance thereof. (See McConnell v. Federal Election Comm 'n (2003) 540 U.S. 93, 150; Buckley v. Valeo (1976) 424US. 1,27 (per curiam).) On two occasions, the mayor could have taken action to assist Feldman and Sunroad to resolve the FAA hazard determination and maintain the building at 180 feet, as planned and constructed. On both occasions, the mayor refused. First, at the December 19, 2006 meeting, the mayor refused to act on Sunroad counsel's advice as stated by Feldman that the FAA's hazard determination would be resolved ifthe mayor asked the FAA to make pennanent its NOTAM, whichraised the minimum inclement weather circling altitude. Second, inlate May2007, the mayor rejected the FAA's offer to allow the building to remain at 180 feet if the inclement weather approaches were shifted to the south ofMontgomeryField that would have meant more air traffic over Serra Mesa residential neighborhoods, even though for less than one percent of all landings. Thus, the record refutes the notion that Mayor Sanders intended to aid Feldman and Sunroad as his campaign contributors.

24 An elected officeholder is neither legally prohibited from meeting nor ethically expected to decline meeting an individual based upon contributions the person makes to the officeholder's political campaign. The sources and amounts of campaign contributions are sharply limited and thoroughly reported in this state. Those limits and reporting requirements combined with measures like the Freedom of Information Act, the Public Records Act, and open meeting laws carve a formidable legal landscape. Armed with access to both governmental deliberations and campaign fiI)ancial information, an informed public can make its own judgments about the propriety of the actions taken when officeholders deal with contributors and their issues. The fact that an officeholder meets with campaign contributors is not itself a corrupt practice.

2. The Mayor's Actions and Decisions Affecting the Construction of the Centrum 12 Building

In evaluating the charge ofcorruption, the mayor's actions with respect to Centrum 12 must . be judged from the perspective of this fact: the mayor learned of the FAA's hazard determination fully two months after the building had reached its permitted height. The Centrum 12 building had been proposed at 180 feet and had been permitted at that height. Most of that permit process occurred prior to the mayor assuming office and without the mayor's knowledge or Waring's knowledge.

It is false to assert that the mayor "allowed" Sunroad to construct an illegal building which endangered public safety. The construction was properly and legally permitted bTthe city's established process. DCA Miller testified he so infonned City Attomey Aguirre in October 2006. Before the city issued its final pennit for interior construction, Sunroad had agreed to comply with FAA regulations and hold the building to 160 feet. The FAA issued a pennit for a 330-foot crane to construct the building to its permitted height and a NOTAM to route air traffic safelyabove the crane. It was up to Sunroad, not the city, to apply to the FAA pursuant to the 14 C.F.R. Part 77 regulations, and, ifnecessary, to apply to CalTrans for a permit pursuant to the Public Utilities Act. The building as topped out did not endanger public safety because the FAA would hav~ closed Montgomery Field to air traffic ifit had. We find no evidence of corruption or unethical behavior in the permitting process undertaken by the city.

Waring did not trust the city attorney's office's advice that the building was an illegal nuisance and that the city, as opposed to the FAA or CalTrans, had a duty to abate it. Waring was not given a clear alia direct legal opinion from the city attorney's office that there would not be city liability. Four differentDCA's had come and gone as legal advisors to Waring's city deparhnents in the first six months of his tenure. The city attorney's office had besieged DSD staff for the production of documents and interviews by December 2006. By January, 2007, the city attorney had publicly accused Waring ofMing "conupt" and had publicly announced that he was requesting a federal criminal investigation of Sunroad and DSD officials.

Waring advised us that when he became aware of the FAA determination he conducted research into the FAA regulations and learned that the Part 77 regulations were not "law," but guidelines or"standards for detennining obstructions innavigable airspace." (14 C.F.R. Part 77, sec.

25 77.1 (a).) Waring spoke directly with FAA officials who advised Waring that hundreds ofbuildings in the nation violate the Part 77 regulations and that the FAA cannot enforce the regulations by making land use directions. Waring was told that only two buildings had been modified to comply with the Part 77 regulations, one ofthem the FAA's ownbuilding in Atlanta, Georgia. He was told that the FAA for its part would not tell the city what to do, that it only makes hazard determinations and will shut down an airport ifsafetyis compromised bya structure or condition. The FAA did not undertake such action in this case because it had issued the NOTAM to accommodate the construction crane, and thus the Centrum 12 building was not a "safety issue."

Marcela Escobar,Eck corroborated Waring's conclusions. She informed us based on her extensive experience in development and land use regulation that the FAA commonly "overrides" strict compliance with Part 77 regulations. A contemporaneous local example is the La Jolla Commons Project in the University Town Center area. Escobar,Eck pointed out to us that many downtown buildings in San Diego teclmicallyviolate the Part 77 regulations, but are accommodated by the approved FAA air routes for Lindbergh Field.

Waring's concern was that action by the city contrary to Sunroad's building pennit such as the issuance of an SWO or a Restoration and Mitigation order to reduce the building to 160 feet would subj ect the cityto civil liability. The question posed bythe mayor's staffto the city attorney's office reduced to this: ifthe city lawfully issued a permit to Sunroad to build to 180 feet, what was the legality of revoking or modifying the permit and requiring deconstruction of the l80,foot building on the basis ofthe FM's Part 77 regulations? Waring could not obtain an opinion on that question from the city attomey. Likewise, Waring was unable to induce CalTrans to enforce its own position that the building violated state law or to provide a legal opinion on the matter. Waring concluded that Sunroad itselfwould have to settle matters with the FAA and CalTrans, without the city forcing its hand, because Sunroad would have a problem obtaining insurance and tenants in light of the FAA hazard detennination. For that reason, Waring resisted issuing the SWO, agreed to Sunroad's "weatherization" measures, and sought to reach a resolution which would satisfY the FAA, while avoiding liability for the city. In Waring's view, the city attorney's suit against Sunroad converted Sunroad's practical problem into potential civil liability for the city. We find that

regardless ofthe practical or strategic merit ofthat position and the COill'se ofaction he pursued as I a result thereof, Waring had a reasonable basis for his position and pursued it in good faith in order to avert or minimize the city's potential civil liability and not as a favor to Sunroad or Aaron Feldman.

We also find, however, that there was not unanimity with respect to handling the Sunroad building issue in the mayor's office. Fred Saini, the mayor's political and media advisor, told us that he was convinced the building was illegal based on the correspondence from CalTrans and that he urged the mayor and Waring to support the city attorney's effort to force Sunroad to lower the \ building to 160 feet. Part of Sainz's concern was how the matter would appear to the press and . public.

Mayor Sanders told us that he was well aware ofWaring's and Sainz's opposing positions. He readily articulated the bases ofthese positions and characterized them as "vehemently" opposed.

26 The mayortold us that he was genuinely concerned that the city would have civil liabilityifit sought to force Sunroad to deconstruct the building contrary to the city's permit and that he could not get objective legal advise from the city attorney's office on that issue. The mayor advised us that he sided with Waring and endorsed his handling ofthe matter because he believed it was sound policy even though he knew it might not play well politically.

With respect to Sunroad's proposed "weatherization" measures, the mayor was aware of Waring and Escobar-Ec).<:'s rationale for approval of them. He did not play any direct role in the matter, but concedes responsibility for the decisions. As detailed in the Findings (Part IV), Waring approved themeasures after consultingwithEscobar-Eckbecausehewas concernedthat the October 2006 SWO preventing Sunroad from working on the top 20 feet ofthe building to seal the building against the elements could result in civil liability for the city for" any weather-caused damage. Waring told us 'that he was concerned "one day the city could own that building" and did not want a building with weather damage. Escobar-Eck consulted with city building officials Hasenin and Harris who agreed that the proposed measures were reasonable to insure against weather damage. The city's letter to Sunroad to permit the "weatherization" measures was explicit that any construction undertaken by Sunroad was at its own risk and without any claim against the city. We find that regardless ofthe practical or strategic merit in permitting the "weatherization" measures, Waring and Escobar-Eck had a reasonable and good faith beliefthat the action was in the city's best interest to minimize potential civil liability and that they were not doing a favor for Sunroad or Aaron Feldman.

The proposal to the FAA and CalTrans addressed in the mayor's May 18, 2007 letter to modifY the building and to change some inclement weather approach patterns was, as previously noted, personally reviewed and approved by the city attorney. The mayor' sproposal was an open and direct effort on his part to satisfY the FAA safety concerns and eliminate any potential liability of the city. The FAA countered that the Sunroad building could remain at 180 feet if all alternate air traffic patterns were diverted to the south ofMontgomery Field over the Serra Mesa residential neighborhood. The mayor rejected the proposal and decided instead that the building had to be reduced to 160 feet. The mayor so directed on June 21, 2007. We find no evidence that the mayor made his proposal to the FAA as a favor for ,Sunroad or Aaron Feldman.

We make the following conclusions with respect to the city attorney's specific allegations conceming the mayor and his office· acting to favor campaign contributor Aaron Feldman and Sunroad Enterprises:

• Accusation: Referring to the approval of the "weatherization" measures, the mayor was personally involved and "cut a backroom deal" with theSunroad people and after meeting with Aaron Feldman on December 19, the mayor authorized thelnodification ofthe SWO to permit "completion ofthe building," and Aaron Feldman, a "major contributor" to the mayor's campaign, built a building with the mayor's knowledge and assistance in violation ofthe SWO andFAA hazard determination.

27 The "weatherization" measures were not mentioned at the December 19 meeting between the mayor and Aaron Feldman. The mayor was not "personally involved'" in approving those "measures," albeit he takes responsibility for the decision of Waring and Escobar-Eck. There was no "back room deal"; rather, Waring and Escobar-Eck vetted the proposal through the city's building officials. They agreed that it was a reasonable request to protect the building. Approval ofthe proposal did not allow Sunroad to "complete the building." The measures did not violate the SWO because the approval issued by the Escobar-Eck modified the SWO. The measures did not violate the FAA hazard determination because it was concerned exclusively with the height ofthe building.

• Accusation: The mayor "allowed" the construction of an "illegal" buildingwhich created a "safetyissue" "onbehalf'ofAaronFeldman who held a fund raiser for the mayor. "A rich campaign contributor who contributes thousands of dollars to the Mayor has been given . special treatment by the Mayor and his staff. They were allowed to build the building in defiance of the FAA standards. They were allowed to circumvent the stop work order that the city attorney's office advised had to be put in place."

The mayor did not allow the construction ofan illegal building which was a safety issue. The building was properly permitted and had been constructed to the height which caused the FAA hazard determination before the mayor knew about the problem with the building. The goal ofthe mayor and his staffintaking action after learning ofthe FAA hazard determination was satisfying the FAA hazard finding and thereby eliminating the safety issue" as well as lnini~nizing or eliminating potential liability to the city. None,ofthe actions were taken on behalfofAaron Feldman or Sunroad. On two occasions when the mayor could have acted to assist Feldman and Sunroad (in December 2006 and May 2007), the mayor refused to do so.

• Accusation: "[T]here was absolutely no authority for the Mayor to take a position withthe FAA to change the landing [patterns] at Montgomery Field Airport."

Only the city as owner and operator ofits airport could approach the FAA regarding the modification of aboveground operations. The mayor had the authority to make this proposal to the FAA. He disclosed to the city attorney, the City Council, and the public his intention to do so in advance.

• Accusation: "What I am suggesting here is that there is a very deep, on-going effort to circumvent the legal requirements onbehalfofthe Mayor's substantial campaign contributor."

28 There was no effort by the mayor, his staff or DSD to "circumvent legal requirements." The efforts bythe mayor and his staffafter they learned ofthe FAA hazard determination were intrnded to achieve a resolution that would satisfy the FAA and eliminate the hazard determination in conformity with the law, while minimizing or eliminating city liability.

• Accusation: "Misuse ofpublic funds [referring to Sexton's work] to help someone who had violated FAA laws."

Sexton was employed in an effort to find a resolution to satisfy the FAA's safety concerns. As the airport belongs to the city, only it had the authority or ability to approach the FAA with the proposal made by it. Sextons's actions were on behalf ofthe city, not Feldman or Sunroad. His employment did not constitute a misuse of public finds. (The Airport Authority Report reaches the sarne conclusion. Attachment 5, p. 6.) .

• Accusation: "The thing you have to remember is the Mayor's staff issued the 180-foot pennit on July,7th after the presumed Notice of Hazard had been issued on the 24th of April, after Sunroad had represented on June 20th and again in June 22nd that they would limit it to 160."

The mayor's staff did not issue the permit on July 7. It was issued by DSD, before the mayor and his staff were aware of the problem with the Sunroad building. The permit issued 'on July 7 was for interior construction and had nothing to do with permitting the building to be built to 180 feet. That had been permitted in February 2006, long before the FAA hazard detennination. The July 7 permit issued after Sunroad represented to the FAA and to the city that it would not build above 160 feet in conformance with the Part 77 regulations. There was no legal reason for the city not to issue the interior construction pennit.

Applying the law to these factual findings, there is no basis to conclude that the handling of the Sunroad Centrum 12 building or the dealings with Sunroad Enterprises or Aaron Feldman by the mayor, his staff, or DSD was corrupt. The facts do not reflect even the relatively low level of probable cause for a beliefthat a violation ofa statute involving corruption-e.g., bribery, conflict ofinterest, misuse.ofgovernment funds or a breach ofapplicable municipal ethics ordinances-had occurred. The facts do not support a reasonable suspicion of "a wrongful design to acquire or cause some pecuniary or other advantage to the person guilty ofthe act or omission referred to, or to some other person ("corruptly" as defined by the Pen. Code, § 7 subd. (3)). The facts do not support a conclusion that Sunroad Enterprises or Aaron Feldman had "special access" or enjoyed "undue influence" with the mayor, his staff, or DSD officials.

29 C. ALLEGATION: THE MAYOR MISUSED PUBLIC FUNDS BY HAVING TED SEXTON LOBBY THE FAA ON SUNROAD'S BEHALF FOR THE BENEFIT OF A CAMPAIGN CONTRIBUTOR

City Attorney Aguirre wrote in his Union-Tribune letter to the editor:

Moreover, the mayor engaged in a corrupt and embarrassing course of action when he deployed the 'highest level executive with the necessary expertise on these issues' from the San Diego Regional Airport Authority, along with city staff, to lobby the FAA for changes to the routing of airplanes at Montgomery Field so that the illegal building could remain. In doing so, Mayor Sanders misused thousands of dollars ofpublic funds for the private benefit ofa campaign contributor.

Prior to this allegation in the letter to the editor, the city attorney made the following related allegations at the June 7 Airport Authority meeting and at his June 12 press conference--Attachments 11,14:

• Without public notice or discussion, the mayor, with the assistance of AA Chairman Bersin, sent Ted Sexton to work on changing the landing patterns to the south of Montgomery Field to accommodate a substantial campaign contributor ofthe mayor.

• Sexton was used to help the mayor's campaign contributor circumvent FAA requirements and Sexton was "lobbying" the FAA.

• "They [Sunroad Enterprises and Aaron Feldman] were given the benefit of a secret agreement with the Airport Authority; the misuse of an airport authority employee to try to circumvent the FAA requirements; the misuse of city funds to pay for the travel of that employee ...."

D. FINDINGS AND EVALUATION

1. The Origin and Execution of the "Loaned Executive" Agreement

The "executive loan" agreement of Ted Sexton from the AA to the city to work on airport matters had its origins in discussions at the outset ofthe Sanders administration. Those discussions concerned both how and whether the city ought to manage its airports. A number ofmeetings took place between city and AA officials between March 2006 and February 2007 at which the participants discussed the idea of a "loaned executive" assisting the city in handling its airport operations and relationship with the FAA.

On March 2, 2007 Mayor Sanders sent a letter, authored by Jim Waring, to Alan Bersin, chairman ofthe AA, requesting AA's assistance withthe Sunroad buildingissue. Themayor's letter

30 did not contain a request for a "loaned executive." Itrequested that "the Airport Authority assist us in analyzing the situation [concerning the Sunroad building] and in working with the FAA and other interested stakeholders in an attempt to resolve the issue." After consulting with the AA's legal department, Chairman Bersin replied in a letter onMarch 12, which offered the loan of"our highest level executive with the necessary expertise on these issues to work with the City." The "issues" mentioned in Bersin's letter did not specifically address the Sunroad building issue. That letter instead spoke to the "best approaches" for the city's airport uses, user needs, and public health and safety near the airports. As the Airport Authority Report notes, "Ted Sexton was the logical choice to provide the expertise needed by the City." Attachment 6, p. 18.

OnMarch 31,2007, anMOD was executed byAA CEO ThellaBowens and cityCOO Ronne Froman, for the "executive loan" ofTed Sexton from the AA to the city. The MOD described a wide range of duties for Sexton. None of the duty descriptions specifically referenced the Sunroad building issue, but they did touch on issues related to that matter.

As the AA counsel's Report details, the formation and execution of the agreement was "operational" and did not require full AA board approval. Nonetheless, the board was advised of the agreement. Attachment 6, p. 3. For the city's part, the mayor's office contends, contrary to the city attorney's assertion, that the agreement did not require the approval ofthe City Councilor the city attorney's office as it did not require the expenditure of city funds and was an agreement for executive assistance the mayor's office was competent to make. Insupportofthis chiim, themayor's office pointed to similar "loaned executive" agreements reached by the city with the county and the harbor district, both of which were negotiated and executed exclusively within the mayor's office. We fmd that regardless of whether the "loaned executive" agreement, as a matter of internal municipal procedures, should have been approved.bythe City Councilor the city attorney, the fact it was not does not suggest "corruption" in connection with the origin or execution ofthe agreement.

As to the allegation that the ''loaned executive agreement" was in some manl1er or degree "secret," the fact that City Attorney Aguirre was not made aware ofthe agreement at the time it was executed did not make it secret. As detailed in the Findings, AA Chairman Bersin discussed the "loaned executive" agreement at a City Council Rilles Committee meeting on April 11. Present at the meeting were City Council Member Donna Frye and Chief Deputy City Attorney Catherine Bradley, the head ofthe city attorney office's government section. The city attorney has responded to this fact by asserting that the discussion in the City Council ofthe "loaned executive" agreement for Ted Sexton "was never noticed on the agenda discussion." Attachment 12, p. 4. It is difficult to understand how the absence ofthe issue on the agenda matters to the charge ofa corrupt course· of conduct. We conclude that the fact that the agreement was openly discussed by the chairman of the AA at the City Council committee hearing only days after it was executed undermines the suggestion that the agreement was secret or that the city attorney's office was not made aware ofit.

2. Ted Sexton's Work on the Sunroad Building Matter

As detailed in the Findings, Ted Sexton worked with a broad mandate under the MOD to assist the city with a host ofissues related to its operation ofcity airports. He worked on a number

31 ofissues wholly unrelated to the Sunroad building. Attachment 6, Exhibit 12. Sexton did work with citymanagers and regulators ontheSunroadbuilding issue, most specificallyin the effort to address and resolve the FAA hazard determination.

The city attorney's allegations focus on Sexton's activities following the mayor's open letter ofMay 18, setting forth the proposalto address the FAA's hazard determination. Attachment 12, p.2. As detailed in the Airport Authority's Report, Sexton had made presentations to city officials and later to city and Sunroad officials in which he emphasized the seriousness of the FAA hazard determination and the need to address it. He worked on a proposal to resolve the FAA height concerns. In part due to that work, the mayor's open letter of May 18 proposed to the FAA and CalTrans lowering part ofthe building to163 feet, keeping the equipment enclosure (15 percent of the roof line) at 180 feet and modifying circling instrument approaches.

In the days following the mayor's letter, Sexton continued to work with city and Sunroad officials to refine a power point demonstrating the mayor's proposal for a presentation to the FAA. At the May 22 meeting in Fort Worth, Texas, where Sexton and Jim Barwick presented the city's proposal, FAA officials were mildly supportive, but since it entailed alteration offlight approaches, the FAA suggested the matter be vetted with FAA officials in the FAA's Los Angeles regional office. Sexton and Barwick later met with the FAA in Los Angeles. While the proposal was under consideration, the city withdrew the proposal.

The mayor's May 18 proposal to the FAA was an open matter disclosed to the City Council and the public. The city attorney had been made aware ofthe proposal and approved. The fact that the mayor would follow up his written proposal with a formal, documented presentation to the FAA should hardly be surprising. Sexton was the most appropriate resource available to the city to assist in this presentation. We find no basis for the city attorney's claims ofimpropriety or "corruption" regarding the use of Sexton in this regard.

Neither Sexton nor Barwick were "lobbying" the FAA on behalf of Sunroad or Aaron Feldman in the presentations. They presented to the FAA the city's proposal which the mayor had openlydisclosed beforethemeetings. Onlythe city, as the owner-operator ofthe airport, couldmake such a proposal to the FAA. The proposal was not designed to ",circumvent FAA requirements." The proposal was intended to meet and satisfY the FAA's concerns underling the "hazard determination." The proposal was not designed to benefit Sunroad. It required Sunroad to make substantial, costlymodifications to thebuilding. Theproposal was designed to resolve thebuilding's height issue with the FAA and eliminate all liability ofthe city arising from the costs ofthe required modifications to the building's height and roofline, the cost ofwhich Sunroad would bear. There was no misuse of public funds in the use of Sexton (or other city personnel or resources) in presenting the mayor's proposal to the FAA.

Under Penal Code section 424, a public official charged with authority over public moneys (and public resources such as employees and equipment [see People v. Sperl (1976) 54 Cal.App.3d 640]), who "without authority oflaw, appropriate[s] the same, or any portion thereof, to his own use, or to the use of another," commits a felony. No evidence reflects the use of Ted Sexton in

32 connection with the Sunroad building matter and the presentation of the mayor's proposal to the FAA was an appropriation ofpublic money (or personnel orresources) without authority oflaw and for the use ofanother. Themayor clearlyhad the authority to make his proposal to the FAA (indeed, the city attorney reviewed and agreed to it). The proposal was a city matter done for an official purpose. We conclude that the use of Sexton to assist in presenting the city's proposal to the FAA did not constitute misappropriation of public funds.

E. ALLEGATION: THE MAYOR ENGAGED IN A COVER-UP REGARDING SEXTON'S ROLE WITH THE CITY REGARDING THE SUNROAD BUILDING

City Attorney Aguirre wrote in his Union-Tribune letter to the editor:

When the facts ofthe mayor's misconduct began to leak out to the public, the mayor engaged in a campaign of delay, deny and deceive. The mayor delayed turning over pertinent documents for weeks. He denied that he was helping his campaign contributor to circumvent FAA rules. And he deceived by claiming 'nothing could be further from the truth' in response to allegations he was misusing an Airport Authority senior staffer to lobby the FAA to allow the illegal building to stay.

Prior to this allegation in the letter to the editor, the city attorney made the following related allegations at his June 12 press conference--Attachments 11, 14:

• "In addition, you might recall on May the 30th, the mayor, in response to a demand for any documents associated with Sunroad, produced a series of documents to the city attorney's office which have now been made available, in part, to the media. Not produced by the mayor at that time was a March 2, 2007 letter [from the Mayor to AA Chairnlan Bersin]. This letter was not released on May 30th when the mayor represented thathe had released all the documents associated with Sunroad to the city attorney's office based upon our demand."

• "[P]roviding of false information to the media regarding the matter; and failure to disclose the other documents relating to this. And now we have the disappearance of Mr. Sexton."

• "[T]he Mayor tells the news media that Sexton 'was not brought on to manage the Sunroad building issue,'" citing the June 7 Fact Sheet.

• "Mayor Jerry Sanders, however, failed to disclose [in connection with the press conference and letter ofMay 18] that City staff and loaned executive Sexton were days away from presenting to the FAA in Texas a flight modification proposal that Sunroad had been advocating."

33 • "TheMayorhas never informed the public ornews mediathat Sunroad officials have been involved in the presentation to the FAA."

• "[T]he Mayor knowingly withheld essential facts at this news conference [presumably on June 7]. He never disclosed that a presentation had been made to the FAA by Ted Sexton and City Official Jim BarWick in Ft. Worth, Texas on May 22, 2007 regarding flight pattern modifications and Sunroad Centrum I [sic] building modifications, as well as that the FAA had refused to support such a plan."

• "June 11,2007, Mayor's memorandum to the City Council regarding the Centrum 12 Office Building Update. The memo states that Sexton and the Mayor's staffhad met with FAA officials to 'discuss the various options that would be available to the city.' In addition, the memo also reveals that the FAA 'told the city's representatives that it would not support any intrusion into the airspace above 160 feet.'" and "[t]he Mayor's memorandum was releasedat the same time the city attorney received the requested documents related to Sexton."

F. FINDINGS AND EVALUATION

The city attorney's allegations that "the"mayor engaged in a campaign ofdelay, deny and deceive,'~ i.e., engaged in a cover-up, inextricably are tied to the city attorney's allegations that the mayor and his staff took corrupt actions respecting Centrum 12, Sunroad Enterprises, Aaron Feldman and Ted Sexton. Indeed, the cover-up allegation explicitly alleges corruption. We do not find evidence of corruption in those actions by the mayor and the staff. The mayor and his staff certainly believe they engaged in no corrupt conduct. There appears to have been no motive for a cover-up.

The cover-up allegationmayreflect a view that the cityattorney and, perhaps, thepublicwere entitled to contemporaneous disclosure of all the mayor's actions with respect to the Sunroad building issue aIfd that a cover-up is signaled in its absence. Ifso, we find no support in the law for that view. Certain documents may not have been released as quickly as the city attorney desired. Nonetheless, it appears thatall relevant documents had been released within a matter ofdays. The mayor has denied to us that he intended to withhold or delay the release of documents and affinned that his view was "there was nothing to hide." We find n6 evidence of an intentional cover-up by the mayor or his staff.

1. The Mayor's Response to Questions Regarding the Role of Ted Sexton Concerning the Sunroad Building

On June 7, inthe midst ofthe city attorney's accusations against the mayor, a member ofthe press (likelyFred Lewis oftheVoice ofSan Diego) asked the mayor's spokesman, Fred Sainz, about Sexton's role respecting the Centrum 12 building. Attachment 13. Unaware of the March letters between the mayor and Bersin, Sainz contacted Ronne Froman, who signed the MOU for the Sexton executive loan onbehalfofthe city. Fromanprovided Sainzwithvarious documents concerningthat

34 agreement, none ofwhich directlyrefer to the Sunroadbuildingissue. Using these documents, Sainz prepared a Fact Sheet which he released to the press. Attachment 9. Inpertinent part, the Fact Sheet stated, "Mr. Sexton was not brought on board to manage the Sunroad building issue." Later that day, Sainz briefed the mayor in advance ofhis weekly appearance on the Roger Hedgecock radio program, and the mayor made a similar statement about Sexton in response to a question from the host. On the following week's show, the mayor corrected the record.

The mayor explained t6 us that at the time he had forgotten the March letter exchange with the Airport Authority and that, while he was aware Sexton worked on the Sunroad building issue, he thought (correctly) Sexton was working on a range of issues related to the city's airport operations. The mayor stated that he had no intention of l11isleading the press or public about Sexton's role or his work with the city on the Sunroad building or otherwise, and that he, in fact, did not view Sexton as "managing" the Sunroad issue, but rather as a resource to assist in dealing with the FAA.

On its face, the Fact Sheet and the mayor's statements that Sexton was not brought on board "to manage the Sunroad building issue" were accurate. Sexton, an aviation executive and an expert resource on the city's airport issues, clearly was not "managing" the Centrum 12 building problem, which was Waring's role. The Fact Sheet and the mayor's statements on the radio program might be criticized for failing to mention Sexton's considerable work on developing the city's proposal to address the FAA concerns about the building. However, based on all the facts, there is no evidence. that the mayor or his staffdeliberately misled the press concerning Sexton's role or made an effort to cover-up the work Sexton had performed in connection with that issue.

2. Ted Sextons's Role in the Presentation to the FAA and the Release of Documents Related to Those Activities

Many of City Attorney Aguirre's allegations of a cover-up concern the mayor's failure to \ announce in advance or contemporaneously the presentations to the FAA in late May and the delay or failure ofthe mayorto release documents inresponse to a Charter section 40 demand that the city attorney had apparently made ofthe mayor's office concerning the Centrum 12 building. From the city attorney's COlmnents on June 12, it appears that the mayor's office released a host ofdocuments on May 30. However, according to the city attorney, the mayor's office had failed to release the Mayor's March 2 letter to the Airport Authority and perhaps other documents related to the presentation made to the FAA between May 22 and May 30, which City Attorney Aguirre had acquired by the time ofhis June 12 press conference.

Because the city attorney refused to cooperate with our inquiry, we lack an accounting of which documents he sought and received from the mayor's office on May 30 or how he acquired all ofthe documents by June 12. The mayor advised us that he and his staffattempted to comply with the city attorney's demand for documents and did not deliberately withhold any documents, because "there was nothing to hide." There was notiJing improper about Sexton working on the Sunroad issue generally and nothing amiss or secret in the fact ofthe presentations Sexton and Barwick made to the FAA in the last two weeks ofMay.

35 The mayor's letter on May 18 openly announced that "my staff has put forward a proposal that will reduce the building height to 163 feet...." Nothing overtly alarming, hidden or improper appears in Sexton's and Barwick's working with Sunroad to perfect a proposal that required significant concessions by Sunroad or in their presenting that proposal to the FAA. Likewise, nothing legally compelled the mayor to advise the city attorney, the press, or the public day-by-day and up-to-the-minute what measures his office took to place the proposal before the FAA. The mayor had publicly announced, with the apparent concurrence ofthe city attorney, that he and "his staff' would make a compromise proposal to the FAA to resolve the FAA height concerns regarding the Sunroad building. For present purposes, how the mayor and his staffwentabout that in the days following is oflittle moment. From the record, it appears that the mayor had publicly outlined those efforts byJune II. All documents related to these measures wereinthe city attorney's hands byJune 12, less than three weeks after the events occurred and while the mayor worked out his ultimate response to the Sunroad building issue.

We conclude that themayor andhis office did not deliberatelywithhold documents to cover­ up post-May 18 actions on the Centrum 12 issue or to conceal Ted Sexton's role regarding that issue. The mayor's denial hf helping Aaron Feldman and Sunroad Enterprises to circumvent FAA rules appears accurate in that the mayor's post-May 18 actions sought to bring the building into conformity with the FAA rules and eliminate civil liability of the city. The mayor's denial of "misusing" Sexton "to lobby the FAA to allow the illegal building to stay" appears accurate as Sexton was not misused, there was no lobbying by Sexton, and the mayor's effort were directed toward making the building legal under FAA rules.

36 (

Attachment 1 COMPREHENSIVE TIME LINE OF EVENTS RELATED TO THE CITY OF SAN DIEGO'S HANDLING OF THE SUNROAD CENTRUM 12 BUILDING FROM PERMIT TO DECONSTRUCTION

Date Event February 7 and 24, City issues permits to Sunroad to construct Centrum 12 building at 2006 180'. March, 2006 Ronne Froman attends initialmeeting with Airport Authority (AA) to discuss City's status vis a vis all City airports. March 6, 2006 Sunroad begins construction of Centrum 12 building. March 27, 2006 City issues framing and foundation permit for building at 180'. April 3, 2006 Alerted by an anonymous complaint, FAA advises Sunroad it must file for an aeronautical study because ofbuilding's proximity to Montgomery Field. April 3, 2006 Sunroad architect, Dan Munch, advises Sunroad that FAA will be making an "obstruction evaluation" ofthe Centrum 12 building. April 3, 2006 Munch calls John Cruz, City DSD, and advises that FAA has concern over proposed height of Centrum 12 building. Cruz advises Jeanette Temple, Project Manager II, that building has been designated a "presumed hazard" due to height. Temple directs Cruz to gather information and report back to her. [Mayor's Report notes no evidence offollow-up.] April 5, 2006 Sunroad files a notice ofProposed Construction with the FAA requesting approval ofthe C~ntrum 12 building at 180'. April 24, 2006 FAA advises Sunroad that building is a hazard at 180' and may not exceed 160'-Notice ofPresumed Hazard. ! June 7, 2006 Mayor Sanders writes letter to AA proposing that AA assume control ofMontgomery and Brown Field Airports.

June 11, 2006 FAA issues a Notice to Airman (NOTAM) to raise the "deck" 300' for approaches and landings to accommodate the crane for the Centrum 12 building.

1 June 12, 2006 First floor ofbuilding is constructed [steel framing begins].

June 19,2006 FAA advises Kelly Broughton, Asst. Dir., DSD, who advises, Tait Galloway, Senior Planner, DSD, who advises Gary Halbert Dir., DSD that FAA has significant concerns about the planned 180' height ofthe Centrum building. FAA confirms to Galloway.

June 20, 2006 Mayor Sanders meets with Halbert and Waring (subject: Halbert's retirement; Centrum building not discussed. Halbert retired in August.)

June 20, 2006 FAA advises Sunroad that 60 days from April 24, it will issue a Determination ofHazard absent changes to plans for building. FAA copies warning to Broughton and Galloway, who forwards to Halbert on June 21. , SuITroad writes to FAA and advises it will halt construction at 160' while it studies effect ofApril 24 Notice from FAA.

June 22, 2006 Sunroad files a second aeronautical study request with the FAA (form 7460-1); says the building will be 160'.

June 23, 2006 Halbert meets with Dep. City Atty. David Miller, Broughton, Cruz and Galloway to discuss FAA concern and possible solution. Halbert asks Miller to research FAA issue and provide a legal opinion; Miller agrees to do so. (Miller subsequently spoke with SD Regional Airport Com. attorney and was advised the proposed height was not a problem because the building was not in the Airport Influence Area (AlA).) June 23, 2006 Sunroad's counsel, Barbara Lichman, advises Halbert and DCA Miller at Airport Technical Advisory Group meeting that building will hold at 160' pending outcome.ofnew aeronautical study. Miller advises Lichman that City could issue stop work order or file nuisance action but will not because of Sunroad's agreement to hold at 160'. Miller so advises Galloway. Halbert advises Waring by cc of response e-mail to Galloway. Lichman also advises Galloway that building would go only to 160' pending outcome ofaeronautical study; Galloway co=unicated this information to DCA Miller and Halbert by ecmail. June 27,2006 FAA issues No Hazard Determination for building at 160' based on June 23 submission from Sunroad and approves Maxims Crane's application to erect a 330' crane to construct the building.

2 June 29, 2006 Halbert sends e-mail to Galloway with cc to Broughton and Waring advising that Sunroad has agreed to abide by FAA regulations, i.e., 160' height limit. [First possible notice to Waring re: Centrum 12.] July 7, 2006 City issues final building permit (interior construction). Construction reaches 82'. July 26, 2006 Sunroad's counsel notifies City and FAA that Sunroad is proceeding with building at 180'. Also says building is already 180'. Lichman advised Galloway that Sunroad intended to proceed to 180'. Galloway advised Halbert, Broughton, Miller, Galloway, Mike Westlake and Keith Greer bye-mail. Halbert contacted Senior DSD Inspector, Joe Harris, who advised that Sunroad had a permit to build to 180'. (Halbert thought Sunroad's permit was for 160'.) . July 31,2006 Halbert contacts DCA Miller, informed him Sunroad was continuing to build to 180' and inquired ifMiller had completed previously requested research (see, June 23). Miller had not done so, responds, "not yet." August, 2006 Airport Authority agrees to explore Mayor Sanders' proposal that AA assume control ofBrown and Montgomery Fields.

Halbert retires from city service. He leaves Waring a list of some 30-40 projects, including the Sunroad building, which were "issues." August 7, 2006 Deputy City Atty. Miller e-mails Galloway asking why there was no response to previous e-mail (apparently never received per Galloway's responsive e-mail on August 8) suggesting City could legally order a halt to construction under a nuisance theory. August 8, 2006 .. Building reaches 180'. August 10, 2006 Deputy City Atty. Miller contacts Galloway for a meeting and asks for a copy ofLichman's statement regarding building height (see 7/26 entry). August 11, 2006 FAA issues Hazard Determination, declares building at a 180' to be a hazard to use ofMontgomery Field airspace.

Tom Story, Barbara Lichman and Tom Karmann (Sunroad's aviation consultant) meet with Greer, Galloway and DCA Miller to discuss airspace-land use issues with respect to the Centrum building. (See, Galloway's notes ofmeeting.) August 15, 2006 Peter Chou advises senior inspector that building is outside the flight activity zones and airport influence area.

3 August 26, 2006 FAA issues another Determination ofHazard to air navigation. September 5, 2006 Story, Licbman and Karmann meet again with Galloway, and Bill Anderson, Director Planning & Co=unity Investment. Anderson needed further input from City staff, FAA, airport operator and CalTrans. (See, Galloway's notes ofmeeting.) September 14,2006 CalTrans advises Sunroad building is in violation of state Aeronautics September 29, 2006 Act (Cal. Public Utilities Code, sec. 21659 (a)); cc to Mike Tussey, Deputy Director ofAirports for the City, and DCA Miller.

September 15,2006· Galloway e-mails Broughton and B. Anderson re: CalTrans letter to Sunroad, cc: Cruz, Westlake, Hajiri, Miller, Bruvold, Linda Johnson. September 18,2006 Sunroad's counsel writes to CalTrans and objects to request that Sunroad apply to CalTrans for a permit pursuant to PUC sec. 21659. September 22, 2006 Galloway contacts Bill Anderson advising that Tussey wants a meeting to include representatives from CalTrans. October 3, 2006 Sunroad's counsel writes to CalTrans and agrees, under protest, to make application pursuant to PUQ sec. 21659. [Apparently, never done.] October 4, 2006 Marcela Escobar-Eck returns to city employment as Director of Development Services Department. The Sunroad building problem was immediately "on her plate."

October 12, 2006 Tussey e-mails Barwick, Director ofReal Estate Assets Dept., and Jim Waring to advise that on October 10, the Airport Advisory Committee had voted to advise the Mayor's office to support CalTrans in withholding a permit. [Waring later says this is first notice to him of problem.] October 16 and 19, City Atty. by DCA Miller writes e-mail and letter to Waring advising 2006 that building height is illegal, building is a nuisance and City has duty to prevent it and directs that a stop work order (SWO) issue. Waring had no confidence in this advice. Waring talks with FAA [and in January with Ted Sexton ofthe AA] to learn the effect ofPart 77 guidelines and "determination ofhazard" designation.

4 October 25, 2006 Depu1y Ci1y At1y. Brock sends memo to Waring and Escobar-Eck questioning debate/delay in issuing a SWO.

Depu1y Ci1y Attorney Miller exchanges e-mails with Waring concerning building being in violation ofPUC. Miller suggests Sunroad needs a state permit and an FAA "no hazard" determination. Waring responds to Miller and Escobar-Eck, "DSD is not an advocate for Sunroad" and suggests that CalTrans should file suit, not the Ci1y, and that the Ci1y should seek a settlement. cc: Broughton, Wolfsheimer, Brock, Carlyle, Huemann and Shirley Edwards. [First statement of"Waring strategy."]

October 25,2006 CalTrans sends letter in response to letter from Ci1y At1y. confmning its position that Ci1y should take action to abate construction in violation of state and federal law. October 26, 2006 Sunroad's counsel writes to Ci1y and asserts it is not in violation of Gov. Code sec. 50485.2, SDMC or FAA regs. and has a "vested right" to proceed with building. October 27, 2006 Gary Cathey, CalTrans, Office of Airports, e-mails Waring stating that it is CalTrans' position that building is illegal under state law (Gov. Code sec. 50485.1 and 50485.2). Waring responds, and asks if CalTrans is asking for Ci1y to issue SWO and, ifso, will CalTrans assume liabili1y for action. cc: Escobar-Eck and DCA Miller.

Ci1y issues a Stop Work Order (SWO) to Sunroad to stop work on top two floors (17') ofthe building. (Waring believes that SWO is essentially meaningless because bUilding already at 180' and no work being done oftop 20' anyway, so no liabili1y for Ci1y.) Waring advises Mayor Sanders ofissue. Mayor's first response is to ensure no other buildings in the development area violate Part 77, i.e., "no Sunroad II." Waring begins to work with staffto find a solution which will not cause liabili1y for the Ci1y. November 8, 2006 Sunroad appeals the issuance ofthe SWO. November 9, 2006 CalTrans sends to letter to Escobar-Eck advising that SWO failed to state building was in violation of state law and that work had to halt on top 20', not 17', ofbuilding. November 21,2006 Tom Story, on behalf ofSunroad, sends letter to Joe Harris, Chief Inspector, requests Ci1y's permission to do limited work to top 20' of building to "weatherize" the building.

5 November 27,2006 CalTrans writes to Suntoad and reaffirms its position that a state permit is required for the building.

November 28, 2006 Sunroad files an appeal ofthe October SWO.

November 30, 2006 Sunroad representatives meet with Land Use and City Attorney representatives to discuss request to modifY SWO to allow work to "weatherize" the building.

December 1,2006 City Atty. sends memo to Waring that he should make no change to the SWO, i.e., reject "weatherization" request.

December 1,2006 Lichman sends letter to Waring proposing an "operational" resolution to FAA concerns, including straight-in lAP, paid for by Sunroad and also raises "weatherization" issues. Waring forwards the proposal to DSD staff. (Tussey responds to Waring bye-mail on December.4; Waring gets proposal from Sunroad attorney Strauss on December 5, which raises "weatherization" and indemnity for the City; Waring e- mails to Escobar-Eck on December 6.) "~

December 4, 2006 Waring sends e-mail to Escobar-Eck with cc: to DCA Miller referencing December 1 letter and attachments (presumably letter from Lichman proposing settlement) spelling out "remain spectators" strategy to keep the City out of the controversy between the FAA1CalTrans and Sunroad, i.e., let FAA or CalTrans sue.

DCA Brock responds that the CA has directed no changes to SWO and that the CA is working with CalTrans to "abate the nuisance." December 8, 2006 Sunroad offers to pay for $2 million guiding device system to obviate building height concern.

December 13, 2006 SWO is amended to include top 20' ofbuilding. (See, CalTrans letter ofNovember 9.)

December 13, 2006 Ronne Froman meets with Thella Bowens, AA executive director, and Ted Sexton; they discuss proposal for AA to "purchase" or "lease" Brown and Montgomery Fields and "loaned executive" to provide assistance to City with airports reform measures. Problem with Sunroad building might have been mentioned as an example ofneed for closer coordination between City and AA.

6 December 15,2006 City Attorney sues Sunroad, asserting building is a public nuisance and seeking order to have building taken down to 160'.

.Waring sends e-mail to City Attorney Aguirre with cc: to Broughton, Escobar-Eck, Sainz, Michell, Froman and DCA Carlyle disputing CA's tactics in dealing with Sunroad and suggesting a solution can be worked consistent with FAA standards and co=unity safety and asks Aguirre to contact him regarding current plans to resolve the issue with Sunroad. (City Attorney was apparently sending investigators and document requests to DSD at the time.) No response from City Attorney.

December 19, 2006 Aaron Feldman and Tom Story meet with Mayor Sanders and Jim Waring to discuss settlement ofcontroversy over the building. Feldman raises possibility ofcounter-suit to hold the City liable for Sunroad's damages. Feldman says his attorney advised him that ifMayor requested that FAA make the existing Notice to Airmen (NOTAM) permanent, that it would solve FAA's problem. Mayor refuses to do so. No commitments are made. December 19,2006 Isam Hasenin, Chief Building Official, e-mails Escobar-Eck and , advises that Joe (presumably Joe Harris) has advised him that Escobar- Eck is about to permit work on the roofarea and that he has reviewed plans with senior structural staffand recommends against permitting work on topmost floor, roofand penthouse. Concern is for potential city liability in the event ofdeconstruction.

December 21,2006 Hasenin sends e-mail to Escobar-Eck advising that ifthe top 20' of building is removed, all portions ofthe structure above the 11 th floor must be removed to accommodate the elevator penthouse, therefore, it is not advisable to do construction above the 11th floor. [E-mail is in response for advice sought by Escobar-Eck regarding potential City liability in the event ofdeconstruction.]

Joe Harris meets with Sunroad builders to discuss modification of SWO request and work out additional agreements. Harris had no problem with request or agreements, as they were, in his view, necessary to protect the building.

Escobar-Eck sends letter to Sunroad modi:fYing SWO to allow Sunroad to "weatherize" the top two floors ofbuilding as ~greed in meeting with Harris; work was at Suntoad's risk and without any claim against the City.

7 January 19, 2007 CalTrans, in a letter to Waring, advises City that failure to enforce original SWO, i.e., Dec. 21 modification, is allowing construction of the building in violation ofstate law. January 23, 2007 Waring responds to CalTrans letter, advising that building is not in Airport Influence Area, that building is already at 180', that modified SWO would not raise the height and that City could not lower building because ofCity Attorney's lawsuit: .

City Attorney Aguirre publicly calls for the U.S. Attorney to open a criminal investigation and "make an aggressive prosecution" ofboth City officials and Sunroad executives in connection with the construction ofthe Centrum 12 building. [A federal investigation is never opened.] January 30-31, 2007 City Attorney, via DCA Kimberly Urie, sends letter to Aaron Feldman, giving notice ofnuisance, PC 373(a), to Sunroad. February 2,2007 ThelIa Bowens sends e-mail to Jim Waring proposing meeting between City, AA staff and 2 AA board members to discuss methods to work together better. February 12, 2007 Meeting held with AA staff-Bowens, Sexton and Shafer-Payne, Board members Bersin and Watkins and City staff-Waring, Anderson and Escobar-Eck to discuss coordination and "loaned executive." February 12, 2007 Sunroad files a cross-claim against the City seeking $40 ruillion in damages for the inverse condemnation ofthe building. February 15, 2007 Meeting held at City Hall with Ronne Froman, Jim Waring, Mike Tussey (AA), JeffBrown and Pedro Orso Delgado, CalTrans, to discuss airport issues including Sunroad building and to "clear the air" with CalTrans over the City's position. February 26, 2007 Mayor Sanders, Kris Michell and Jim Waring meet with Aaron Feldman in Mayor's office. Feldman shows charts/exhibits regarding the effect ofthe building on flight paths. Nothing results from meeting. March 2, 2007 Mayor Sanders signs letter drafted by Waring to Alan Bersin, Chair of the Airport Authority, requesting assistance with "analysis" re: Centrum building. March 12, 2007 Bersin responds to Mayor's 3/2 letter offering to assign a "loaned executive" with techuical expertise to the City. March 20, 2007 City Attorney sends letter to Tom Story giving notice to Sunroad to comply with SWO.

8 March 21,2007 City Attorney obtains search warrant to search Sunroad offices in connection with investigation ofTom Story for conspiracy to violate city Municipal Code regarding former officials lobbying activities.

March 29, 2007 After all law enforcement agencies refuse to serve the City Attorney's search warrant, the court orders the warrant and affidavit unsealed. March 31, 2007 City and Airport Authority sign agreement for assignment ofTed Sexton on "executive loan" to City. No specific mention of Sunroad Centrum building, although issues surrounding the project and controversy are mentioned in the agreement. April 1, 2007 Sexton begins "executive loan" program and begins work with Waring, Jim Barwick, Real Estate Assets Department on proposals for building compliance with FAA requirements, including meeting with M,ayor . Sanders. Sexton also worked on many other issues affecting City airports operations, including FAA Notification Requirements. April 3, 2007 City Attorney files misdemeanor charges against Tom Story in connection with his contacts with city officials on behalfof Sunroad. April 11, 2007 Alan Bersin, AA, addresses the City Council Rules Committee. Present are Council Member Donna Frye and Chief Deputy City Attorney Catherine Bradley. Bersin explains executive loan ofTed Sexton to the City. April 25, 2007 Feldman writes to Waring offering to settle the litigation and obtain a clearance from the FAA-a "no hazard determination." May, 2007 Sunroad's counsel, Steve Strauss, calls Jim Waring and makes another (2d) proposal (1" proposal, 12/1/06) to solve FAA objections to building, including removing the roof and lowering the building to 166' 3" and releasing the City from all liability.

City Attorney contacts Mayor and asks Mayor to attempt to settle the dispute with Sunroad over the building-"to be seen as problem- solvers."

Barwick and Sexton, after meeting with Mayor Sanders, have conversations with Bruce Laird, FAA regional director in Fort Worth, who agreed to meet to discuss the City's proposal in the "broadest sense" to address the FAA's concern over the Sunroad building. May 8, 2007 Superior Courtjudge orders City. Attorney's Office recused from Tom Story prosecution due to a conflict ofinterest, including using criminal process to advance the civil case against Sunroad.

9 May 13-14, 2007 Union-Tribune publishes articles regarding the Sunroad Centrum 12 building.

May 15, 2007 City Attorney issues Report #17 regarding Centrum 12 building. Report is critical ofdecision to allow work on top two floors of building and recommends that building be reduced to 160'.

May 16, 2007 Mayor Sanders orders internal investigation ofhandling ofSunroad building project.

May 17, 2007 City Attorney writes to Governor and requests that State join in his suit against Sunroad. [State does not join the suit.]

May 18, 2007 Mayor Sanders directs new SWO issued to Sunroad to stop all construction on building, i.e., re-institutes October 27, 2006 SWO.

May 18, 2007 At press conference, Mayor Sanders unveils letter, authored by Waring and edited by Sainz, to FAA and CalTrans, with a copy to the City Council and City Attorney, acknowledging that City failed to issue SWO after first learning of FAA concerns, sets forth City's proposal that building be lowered to 163 feet (wi equipment enclosure at 180') and that City had a further proposal for flight path alterations (lOA, first proposed in Dec.) [FAA later rejects this proposal.] City Attorney given draft ofletter before press conference and approves ofit. Appears with the Mayor at the press conference. May 19, 2007 Tom Kamman, Williams Aviation, a Sunroad consultant, e-mails Sexton making suggestions for Sexton's presentation to FAA. May 21, 2007 Sexton e-mails Tom Story a draft copy of his power point presentation for the FAA meeting. May21,2007 Sunroad makes offer to City to settle dispute over building. May 22, 2007 Ted Sexton and Jim Barwick present alternative plan re: Centrum building to FAA (Haggerty) at meeting in Ft. Worth, Texas. [FAA suggests "circle south" resolution (over Serra Mesa). Mayor later rejects this solution.] .

10 May 22, 2007 City Attorney holds press conference and says that Mayor's position on City Attorney's budget and supplemental positions is in retaliation for City Attorney's report concerning the Sunroad building. (Repeats this' charge on KUSI morning news program on May 23.)

Mayor's Office issues fact sheet accusing City Attorney of mismanaging his budget over 17 supplemental positions, responding to City Attorney accusation, among others, that Mayor's position on City Attorney's budget is in retaliation for City Attorney's aggressive posture on Sunroad building.

May 31, 2007 Mayor meets with Ted Sexton, Jim Barwick, Jim Waring, Kris Michell, Alan Bersin and Fred Sainz to discuss building in light.of FAA rejection ofproposal at May 22 meeting. Mayor decides against any flight path changes, as suggested by FAA, and decides that building must come down to 160'.

June 1,2007 Mayor holds press conference at Sunroad Harbor Island and states that conversations with FAA continue.

June 6, 2007 On KUSI morning news program, City Attorney Aguirre says that Mayor accepted campaign contributions from Sunroad builder (Feldman) and allowed him to complete the building, citing December 19 meeting, after which SWO was modified. Also mentions Ted Sexton from AA working for City with FAA to change flight approaches.

June 7, 2007 At Airport Authority meeting, City Attorney accuses the Mayor of corruption for allowing Ted Sexton to consult on City aviation matters, including Montgomery Field and Sunroad. City Attorney accuses AA Chairman Bersin ofaiding the Mayor by agreeing to the "loaned executive" agreement. City Attorney states that agreement for Sexton's loan was solely to aid Sunroad because Feldman contributed to the Mayor's campaign.

Mayor holds press availability at his office and announces there will be no alternative landing approaches allowed to accommodate the building.

Mayor's Office, by Sainz, issues "Fact Sheet" in response to reporter's question concerning Ted Sexton and City's arrangement with Airport Authority and states that Sexton was not brought on board to "manage" the Sunroad issue. Sainz says fact sheet not checked with Mayor, and some ofexplanation ofSexton's role was in error. ,

11 June 7/14, 2007 On Roger Hedgecock radio show Mayor Sanders responds to question and says Sexton was not brought in to work on the Sunroad building, but corrects that the next week, saying Sainz made error on Fact Sheet. June-, 2007 Strauss for Sunroad makes 3d proposal to Waring, offering to take the building down to 166', release City from lawsuit, provide $75K to $1 million to Montgomery Field for improvements. Barwick and Sexton discuss this offer with FAA's Haggerty and Laird. June 11,2007 Mayor sends memo to City Council re: Sunroad building, announcing decision that building must be reduced to 160'. Memo explains May 18 letter to FAA raising possibility of"circle south" approach pattern. Memo discloses Mayor's staff and Ted Sexton presented this proposal to FAA as outlined in May 18 letter. Memo states FAA proposed clearing airspace around the Sunroad building by adopting "circle south" approach and that Mayor has rejected that proposal. Memo also explains arrangement for Ted Sexton and advises that although Sexton did not "manage" Sunroad building issue, he did work on the matter. Memo asserts "loaned executive" agreement is legal and that City Attorney was aware ofit as DCA Catherine Bradley was at Council Rules Committee meeting when matter was discussed on April 11. June 11,2007 Ronne Froman resigns as Chief Operating Officer effective June 29.

- City Attorney's budget is cut with respect to 14 Deputy City Attorney positions. June 12, 2007 City Attorney Aguirre conducts press conference and publicly charges that Mayor Sanders had misled public about Sexton's role as a "loaned executive" and asserts that Sexton was brought in via a "secret agreement" to "assist Sunroad to evade federal air navigation safety regulations" and that this constitutes a "misuse ofpublic funds." Accuses Mayor ofa "cover-up" and of"improper activity on behalf of a substantial campaign contributor [Feldman]." June 13, 2007 City Attorney Aguirre appears on KUSI morning news program and repeats allegations that Ted Sexton was obtained pursuant to a "secret letter" (the Sanders-Bersin exchange in March) and that Sexton was used to "circumvent FAA rules" and was "lobbying the FAA for Sunroad." Also says that after he issued his report on Sunroad [#17 on May 15], Fred Sainz called and said the "deal" regarding funding his DCA supplemental positions was off.

12 June 15,2007 Union-Tribune publishes City Attorney's letter accusing the Mayor of corruption for (l) allowing campaign contributor Feldman to construct the building in defiance ofFAA standards and California law; (2) deploying Ted Sexton to lobby the FAA for changes to airplane routing so that Sunroad building could remain, thus misusing public funds for the benefit ofa campaign contributor; and (3) deception in describing Sexton's role. June 15,2007 DCA Carmen Brock sends e-mail to Escobar-Eck advising that City should not issue pennits for deconstruction ofbuilding without knowledge ofCity Attorney's Office. June 18, 2007 City Attorney writes to FAA, Haggerty, and advises that the City is not requesting that the FAA modify its August 16, 2006 detennination of hazard regarding the Centrum building, specifically contradicting the Stinroad offer to lower the building to 166'.

Shortly thereafter, Haggerty advises Waring that FAA decision will not, be changed.

" June 19,2007 By memo to Mayor and City Council, City Attorney requests that the Mayor issue a SWO for all worl): on the Centrum 12 building.

Mayor sends memo to City Attorney seeking advice on "implications ofthis action [total SWOj." Mayor advises that he is seeking legal opinion from outside counsel, LathaJn & Watkins, regarding legality of a total SWO. June 19,2007 City Attorney, by Head DCA David Karlin, writes letters to ThelIa Bowens, Ted Sexton and Alan Bersin ofthe AA, and Waring, Escobar- Eck and Kelly Broughton ofDSD announcing a criminal investigation of"whether public officials lobbied the FAA on behalfof Sunroad, a private enti~, resulting in the unauthorized expenditure ofpublic monies."

City Attorney later personally called Sexton and Bowens a.Ildaccused them ofcriminal conduct. City Attorney called Linda Johnson, another AA employee, and asked for her to tell him the truth, "confidentially."

13 June 20, 2007 By memo to Mayor and City Council, City Attorney writes regarding Sunroad's violation ofPUC section 21659 and City's involvement in allowing the violation and requesting that the Mayor order the building reduced to 160'.

Mayor writes to Attorney General to request investigation ofCity Attorney's "corruption" charges. June 21, 2007 After receiving advice from outside counsel, Mayor directs issuance of total SWO and a statement ofthat he will work to require Sunroad to remove the top 20' ofthe building.

Restoration and Mitigation Order sent by Escobar-Eck on behalfof City to Sunroad to reduce height ofbuilding.

Mayor conducts press conference regarding developments ofthe day and announces his request that Attorney General investigate the City Attorney's "corruption" charges.

Attorney General responds to Mayor and agrees to investigate City Attorney's "corruption" charges.

1 , June 26, 2007 Sunroad announces it will lower building to height acceptable to the FAA. July 19, 2007 Mayor's office issues report: Investigation Concerning the Sunroad Centrum 12 Building. September, 2007 Sunroad begins deconstruction ofthe Centrum 12 building. November 19, 2007 FAA advises Sunroad that building is no longer a hazard. Building at 158.7'.

14 COMPREHENSIVE TIME LINE OF EVENTS RELATED TO THE CITY OF SAN DIEGO'S HANDLING OF THE SUNROAD CENTRUM 12 BUILDING FROM PERMIT TO DECONSTRUCTION

Date Event February 7 and 24, City issues permits to Sunroad to construct Centrum 12 building at 2006 180'. March, 2006 Ronne Froman attends initial meeting with Airport Authority (AA) to discuss City's status vis a vis all City airports.

March 6, 2006 Sunroad begins construction ofCentrum 12 building. March 27, 2006 City issues fraruing and foundation permit for building at 180'. April 3, 2006 Alerted by an anonymous complaint, FAA advises Sunroad it must file for an aeronautical study because ofbuilding's proximity to Montgomery Field. April 3, 2006 Sunroad architect, Dan Munch, advises Sunroad that FAA will be making an "obstruction evaluation" ofthe Centrum 12 building. April 3, 2006 Munch calls John Cruz, City DSD, and advises that FAA has concern over proposed height ofCentrum 12 building. Cruz advises Jeanette Temple, Project Manager II, that building has been designated a "presumed hazard" due to height. Temple directs Cruz to gather information and report back to her. [Mayor's Report notes no evidence offollow-up.] April 5, 2006 Sunroad files a notice ofProposed Construction with the FAA requesting approval ofthe Centrum 12 building at 180'. April 24, 2006 FAA advises Sunroad that building is a hazard at 180' and may not exceed 160'-·Notice ofPresumed Hazard. June 7, 2006 Mayor Sanders writes letter to AA proposing that AA assume control ofMontgomery and Brown Field Airports. June 11,2006 FAA issues a Notice to Airman (NOTAM) to raise the "deck" 300' for approaches and landings to accommodate the crane for the Centrum 12 building.

1 June 12,2006 First floor ofbuilding is constructed [steel framing begins].

June 19,2006 FAA advises Kelly Broughton, Asst. Dir., DSD, who advises, Tait Galloway, Senior Planner, DSD, who advises Gary Halbert Dir., DSD that FAA has significant concerns about the planned 180' height ofthe Centrum building. FAA confinns to Galloway. June 20, 2006 Mayor Sanders meets with Halbert and Waring (subject: Halbert's retirement; Centrum building not discussed. Halbert retired in August.) June 20, 2006 FAA advises Sunroad that 60 days from April 24, it will issue a Determination ofHazard absent changes to plans for building. FAA copies waming to Broughton and Galloway, who forwards to Halbert on June 21.

Sunroad writes to FAA and advises it will halt construction at 160' while it studies effect ofApril 24 Notice from FAA. June 22, 2006 Sunroad files a second aeronautical study request with the FAA (form 7460-1); says the building will be 160'. June 23, 2006 Halbert meets with Dep. City Atty. David Miller, Broughton, Cruz and Galloway to discuss FAA concern and possible solution. Halbert asks Miller to research FAA issue and provide a legal opinion; Miller agrees to do so. (Miller subsequently spoke with SD Regional Airport Com. attorney and was advised the proposed height was not a problem because the building was not in the Airport Influence Area (AlA).) June 23, 2006 Sunroad's counsel, Barbara Liebman, advises Halbert and DCA Miller at Airport Technical Advisory Group meeting that building will hold at 160' pending outcome ofnew aeronautical study. Miller advises Liebman that City could issue stop work order or fJle nuisance action but will not because of Sunroad's agreement to hold at 160'. Miller so advises Galloway. Halbert advises Waring by cc of response e-mail to Galloway. Liebman also advises Galloway that building would go only to 160' pending outcome ofaeronautical study; Galloway co=unicated this information to DCA Miller and Halbert bye-mail. June 27, 2006 FAA issues No Hazard Determination for building at 160' based on June 23 submission from Sunroad and approves Maxims Crane's application to erect a 330' crane to construct the building.

2 June 29, 2006 Halbert sends e-mail to Galloway with cc to Broughton and Waring advising that Sunroad has agreed to abide by FAA regulations, i.e., 160' height limit. [First possible notice to Waring re: Centrum 12.] July 7,2006 City issues final building permit (interior construction). Construction reaches 82'. July 26, 2006 Sunroad's counsel notifies City and FAA that Sunroad is proceeding with building at 180'. Also says building is already 180'. Lichman advised Galloway that Sunroad intended to proceed to 180'. Galloway advised Halbert, Broughton, Miller, Galloway, Mike Westlake and Keith Greer bye-mail. Halbert contacted Senior DSD Inspector, Joe Harris, who advised that Sunroad had a permit to build to 180'. (Halbert thought Sunroad's permit was for 160'.) July 31, 2006 Halbert contacts DCA Miller, informed him Sunroad was continuing to build to 180' and inquired ifMiller had completed previously requested research (see, June 23). Miller had not done so, responds, "not yet." August, 2006 Airport Authority agrees to explore Mayor Sanders' proposal that AA assume control ofBrown and Montgomery Fields.

Halbert retires from city service. He leaves Waring a list ofsome 30-40 projects, including the Sunroad building, which were "issues." August 7, 2006 Deputy City Atty. Miller e-mails Galloway asking why there was no response to previous e-mail (apparently never received per Galloway's responsive e-mail on August 8) suggesting City could legally order a halt to construction under a nuisance theory. August 8, 2006 Building reaches 180'. August 10,2006 Deputy City Atty. Miller contacts Galloway for a meeting and asks for a copy ofLichman's statement regarding building height (see 7/26 entry). August 11, 2006 FAA issues Hazard Detennination, declares building at a 180' to be a hazard to use ofMontgomery Field airspace.

Tom Story, Barbara Lichman and Tom Karmann (Sunroad's aviation consultant) meet with Greer, Galloway and DCA Miller to discuss airspace-land use issues with respect to the Centrum building. (See, Galloway's notes ofmeeting.) August 15,2006 Peter Chou advises senior inspector that building is outside the flight activity zones and airport influence area.

3 August 26, 2006 FAA issues another Determination ofHazard to air navigation. September 5, 2006 Story, Licbman and Karmann meet again with Galloway, and Bill Anderson, Director Planning & Community Investment. Anderson needed further input from City staff, FAA, airport operator and CalTrans. (See, Galloway's notes ofmeeting.)

September 14,2006 CalTrans advises Sunroad building is in violation of state Aeronautics September 29, 2006 Act (Cal. Public Utilities Code, sec. 21659 (a)); ccto Mike Tussey, Deputy Director ofAirports for the City, and DCA Miller.

September IS, 2006 Galloway e-mails Broughton and B. Anderson re: CalTrans letter to Sunroad, cc: Cruz, Westlake, Hajiri, Miller, Bruvold, Linda Johnson. September 18, 2006 Sunroad's counsel writes to CalTrans and objects to request that Sunroad apply to CalTrans for a permit pursuant to PUC sec. 21659. September 22, 2006 Galloway contacts Bill Anderson advising that Tussey wants a meeting to include representatives from CalTrans. October 3, 2006 Sunroad's counsel writes to CalTrans and agrees, under protest, to . make application pursuant to PUC sec. 21659. [Apparently, never done.] October 4, 2006 Marcela Escobar-Eck returns to city employment as Director of

./ Development Services Department. The Sunroad building problem was inunediately "on her plate." October 12, 2006 Tussey e-mails Barwick, Director ofReal Estate Assets Dept., and Jim Waring to advise that on October 10, the Airport Advisory Committee had voted to advise the Mayor's office to support CalTrans in withholding a permit. [Waring later says this is first notice to him of problem.] October 16 and 19, City Atty. by DCA Miller writes e-mail and letter to Wacing advising 2006 that building height is illegal, building is a nuisance and City has duty to prevent it and directs that a stop work order (SWO) issue. Waring had no confidence in this advice. Waring talks with FAA [and in January with Ted Sexton ofthe AA] to learn the effect ofPart 77 guidelines and "determination ofhazard" designation.

4 October 25,2006 Deputy City Atty. Brock sends memo to Waring and Escobar-Eck questioning debate/delay in issuing a SWO.

Deputy City Attorney Miller exchanges e-mails with Waring concerning building being in violation ofPUC. Miller suggests Sunroad needs a state permit and an FAA "no hazard" determination. Waring responds to Miller and Escobar-Eck, "DSD is not an advocate for Sunroad" and suggests that CalTrans should file suit, not the City, and that the City should seek a settlement. cc: Broughton, Wolfsheimer, Brock, Carlyle, Huemann and Shirley Edwards. [First , statement of"Waring strategy."] October 25, 2006 CalTrans sends letter in response to letter from City Atty. confirming its position that City should take action to abate construction in violation of state and federal law. October 26, 2006 Sunroad's counsel writes to City and asserts it is not in violation of Gov. Code sec. 50485.2, SDMC or FAA regs. and has a "vested right" to proceed with building. October 27, 2006 Gary Cathey, CalTrans, Office ofAirports, e-mails Waring stating that it is CalTrans' position that building is illegal under state law (Gov. Code sec. 50485.1 and 50485.2). Waring responds, and asks if CalTrans is asking for City to issue SWO and, if so, will CalTrans assume liability for action. cc: Escobar-Eck and DCA Miller.

City issues a Stop Work Order (SWO) to Sunroad to stop work on top two floors (17') ofthe building. (Waring believes that SWO is essentially meaningless becausebuilding already at 180' and no work being done oftop 20' anyway, so no liability for City,) Waring advises Mayor Sanders ofissue. Mayor's first response is to ensure no other buildings in the development area violate Part 77, i.e., "no Sunroad II." Waring begins to work with staffto find a solution which will not cause liability for the City. November 8, 2006 Sunroad appeals the issuance ofthe SWO. November 9, 2006 CalTrans sends to letter to Escobar-Eck advising that SWO failed to state building was in violation of state law and that work had to halt on top 20', not 17', ofbuilding. November 21,2006 Tom Story, on behalfofSunroad, sends letter to Joe Harris, Chief Inspector, requests City's permission to do limited work to top 20' of building to "weatherize" the building.

5 November 27, 2006 CalTrans writes to Sunroad and reaffirms its position that a state permit is required for the building. November 28, 2006 Sunroad files an appeal ofthe October SWO. November 30, 2006 Sunroad representatives meet with Land Use and City Attorney representatives to discuss request to modify SWO to allow work to "weatherize" the building. December 1,2006 City Atty. sends memo to Waring that he should make no change to the SWO, i.e., reject "weatherization" request. December 1,2006 Lichman sends letter to Waring proposing an "operational" resolution to FAA concerns, including straight-in IAP, paid for by Sunroad and also raises "weatherization" issues. Wacing forwards the proposal to DSD staff. (Tussey responds to Waring bye-mail on December 4; Waring gets proposal from Sunroad attorney Strauss on December 5, which raises "weatherization" and indemnity for the City; Waring e- mails to Escobar-Eck on December 6.) December 4, 2006 Waring sends e-mail to Escobar-Eck with cc: to DCA Miller referencing December 1 letter and attachments (presumably letter from Lichman proposing settlement) spelling out "remain spectators" strategy to keep the City out of the controversy between the FAA/CalTrans and Sunroad, i.e., let FAA or CalTrans sue.

DCA Brock responds that the CA has directed no changes to SWO and that the CA is working with CalTrans to "abate the nuisance." December 8, 2006 Sunroad offers to pay for $2 million guiding device system to obviate building height concern. December 13, 2006 SWO is amended to include top 20' ofbuilding. (See, CalTrans letter ofNovember 9.) December 13,2006 Ronne Froman meets with Thelia Bowens, AA executive director, and Ted Sexton; they discuss proposal for AA to "purchase" or "lease" Brown and Montgomery Fields and "loaned executive" to provide assistance to City with airports reform measures. Problem with Sunroad building might have been mentioned as an example ofneed for closer coordination between City and AA.

6 December 15, 2006 City Attorney sues Sunroad, asserting building is a public nuisance and seeking order to have building taken down to 160'.

Waring sends e-mail to City Attorney Aguirre with cc: to Broughton, Escobar-Eck, Sainz, Michell, Froman and DCA Carlyle disputing CA's tactics in dealing with Sunroad and suggesting a solution can be worked consistent with FAA standards and community safety and asks Aguirre to contact him regarding current plans to resolve the issue with Sunroad. (City Attorney was apparently sending investigators and document requests to DSD at the time.) No response from City Attorney. December 19,2006 Aaron Feldman and Tom Story meet with Mayor Sanders and Jim Waring to discuss settlement ofcontroversy over the building. Feldman raises possibility ofcounter-suit to hold the City liable for Sunroad's damages. Feldman says his attorney advised him that ifMayor requested that FAA make the existing Notice to Airmen (NOTAM) permanent, thatit would solve FAA's problem. Mayor refuses to do so. No commitments are made. December 19,2006 Isam Hasenin, Chief Building Official, e-mails Escobar-Eck and advises that Joe (presumably Joe Harris) has advised him that Escobar- Eck is about to permit work on the roof area and that he has reviewed plans with senior structural staff and recommends against permitting work on topmost floor, roof and penthouse. Concern is for potential city liability in the event ofdeconstmction. December 21, 2006 Hasenin sends e-mail to Escobar-Eck advising that ifthe top 20' of building is removed, all portions ofthe stmcture above the 11 tit floor must be removed to accommodate the elevator penthouse, therefore, it is not advisable to do constmction above the 11 th floor. [E-mail is in response for advice sought by Escobar-Eck regarding potential City liability in the event ofdeconstmction.]

Joe Harris meets with Sunroad builders to discuss modification of SWO request and work out additional agreements. Harris had no problem with request or agreements, as they were, in his view, . necessary to protect the building.

Escobar-Eck sends letter to Sunroad modifying SWO to allow Sunroad to "weatherize" the top two floors ofbuilding as agreed in meeting with Harris; work was at Sunroad's risk and without any claim against the City.

7 January 19,2007 CalTrans, in a letter to Waring, advises City that failure to enforce original SWO, i.e., Dec. 21 modification, is allowing construction of the building in violation of state law. January 23, 2007 Waring responds to CalTrans letter, advising that building is not in Airport Influence Area, that building is already at 180', that modified SWO would not raise the height and that City could not lower building because ofCity Attorney's lawsuit.

City Attorney Aguirre publicly calls for the U.S. Attorney to open a criminal investigation and "make an aggressive prosecution" ofboth City officials and Sunroad executives in connection with the construction ofthe Centrum 12 building. [A federal investigation is never opened.] January 30-31, 2007 City Attorney, via DCA Kimberly Urie, sends letter to Aaron Feldman, giving notice ofnuisance, PC 373(a), to Sunroad. February 2,2007 Thelia Bowens sends e-mail to Jim Waring proposing meeting between City, AA staffand 2 AA board members to discuss methods to work together better. February 12,2007 Meeting held with AA staff-Bowens, Sexton and Shafer-Payne, Board members Bersin and Watkins and City staft'-Waring, Anderson and Escobar-Eck to discuss coordination and "loaned executive." February 12,2007 Sunroad files a cross-claim against the City seeking $40 million in damages for the inverse condemnation ofthe building. February 15, 2007 Meeting held at City Hall with Ronne Froman, Jim Waring, Mike Tussey (AA), JeffBrown and Pedro Orso Delgado, CalTrans, to discuss airport issues including Sunroad building and to "clear the air" with CalTrans over the City's position.

February 26, 2007 Mayor Sanders, Kris Michell and Jim Waring meet with Aaron Feldman in Mayor's office. Feldman shows charts/exhibits regarding the effect ofthe building on flight paths. Nothing results from meeting. March 2, 2007 Mayor Sanders signs letter drafted by Waring to Alan Bersin, Chair of the Airport Authority, requesting assistance with "analysis" re: Centrum building. March 12, 2007 Bersinresponds to Mayor's 3/2 letter offering to assign a "loaned executive" with technical expertise to the City. March 20, 2007 City Attorney sends letter to Tom Story giving notice to Sunroad to comply with SWO.

8 March21,2007 City Attorney obtains search warrant to search Sunroad offices in connection with investigation ofTom Story for conspiracy to violate city Municipal Code regarding former officials lobbying activities.

March 29, 2007 After all law enforcement agencies refuse to serve the City Attorney's search warrant, the court orders the warrant and affidavit unsealed.

March 31, 2007 City and Airport Authority sign agreement for assignment ofTed Sexton on "executive loan" to City. No specific mention ofSunroad Centrum building, although issues surrounding the project and controversy are mentioned in the agreement.

Apri11, 2007 Sexton begins "executive loan" program and begins work with Waring, Jim Barwick, Real Estate Assets Department on proposals for building compliance with FAA requirements, including meeting with Mayor Sanders. Sexton also worked on many other issues affecting City airports operations, including FAA Notification Requirements.

April 3, 2007 City Attorney files misdemeanor charges against Tom Story in counection with his contacts with city officials on behalfofSunroad.

April 11, 2007 Alan Bersin, AA, addresses the City Council Rilles Committee. Present are Council Member Donna Frye and Chief Deputy City Attorney Catherine Bradley. Bersin explains executive loan of Ted Sexton to the City.

April 25, 2007 Feldman writes to Waring offering to settle the litigation and obtain a clearance from the FAA-a "no hazard determination."

May, 2007 Sunroad's counsel, Steve Strauss, calls Jim Waring and makes another (2d) proposal (1 st proposal, 12/1/06) to solve FAA objections to building, including removing the roof and lowering the building to 166' 3" and releasing the City from all liability.

City Attorney contacts Mayor and asks Mayor to attempt to settle the dispute with Sunroad over the building-"to be seen as problem- solvers."

Barwick and Sexton, after meeting with Mayor Sanders, have conversations with Bruce Laird, FAA regional director in Fort Worth, who agreed to meet to discuss the City's proposal in the "broadest sense" to address the FAA's concern over the Sunroad building.

May 8,2007 Superior Courtjudge orders City Attorney's Office recused from Tom Story prosecution due to a conflict ofinterest, including using criminal process to advance the civil case against Sunroad.

9 May 13-14,2007 Union-Tribune publishes articles regarding the Sunroad Centrum 12 building.

May 15, 2007 City Attorney issues Report #17 regarding Centrum 12 building. Report is critical ofdecision to allow work on top two floors of building and reco=ends that building be reduced to 160'.

May 16, 2007 Mayor Sanders orders internal investigation ofhandling ofSunroad building project

May 17, 2007 City Attorney writes to Governor and requests that State join in his suit against Sunroad. [State does not join the suit.]

May 18, 2007 Mayor Sanders directs new SWO issued to Sunroad to stop all construction on building, i.e., re-institutes October 27,2006 SWO.

May 18, 2007 At press conference, Mayor Sanders unveils letter, authored by Waring and edited by Sainz, to FAA and CalTrans, with a copy to the City Council and City Attorney, acknowledging that City failed to issue SWO after first learning ofFAA concerns, sets forth City's proposal that building be lowered to 163 feet (wi equipment enclosure at 180') and that City had a further proposal for flight path alterations (lOA, first proposed in Dec.) [FAA later rejects this proposal.] City Attorney given draft ofletter before press conference and approves ofit. Appears with the Mayor at the press conference.

/ May 19, 2007 Tom Ka=an, Williams Aviation, a Sunroad consultant, e-mails Sexton making suggestions for Sexton's presentation to FAA.

May 21, 2007 Sexton e-mails Tom Story a draft copy of his power point presentation for the FAA meeting.

May 21, 2007 Sunroad makes offer to City to settle dispute over building.

May 22, 2007 Ted Sexton and Jim Barwick present alternative plan re: Centrum building to FAA (Haggerty) at meeting in Ft. Worth, Texas. [FAA suggests "circle south" resolution (over Serra Mesa). Mayor later rejects this solution.]

10 May 22, 2007 City Attorney holds press conference and says that Mayor's position on City Attorney's budget and supplemental positions is in retaliation for City Attorney's report concerning the Sunroad building. (Repeats this charge on KUSI morning news program on May 23.)

Mayor's Office issues fact sheet accusing City Attorney of rnismanaging his budget over 17 supplemental positions, responding to City Attorney accusation, among others, that Mayor's position on City Attorney's budget is in retaliation for City Attorney's aggressive posture on Sunroad building. May 31, 2007 Mayor meets with Ted Sexton, Jim Barwick, Jim Waring, Kris Michell, Alan Bersin and Fred Sainz to discuss building in light of FAA rejection ofproposal at May 22 meeting. Mayor decides against any flight path changes, as suggested by FAA, and decides that building must come down to 160'. June 1, 2007 Mayor holds press conference at Sunroad Harbor Island and states that . conversations with FAA continue. June 6, 2007 On KUSI morning news program, City Attorney Aguirre says that Mayor accepted campaign contributions from Sunroad builder (Feldman) and allowed him to complete the building, citing December 19 meeting, after which SWO was modified. Also mentions Ted Sexton from AA working for City with FAA to change flight approaches. June?,2007 At Airport Authority meeting, City Attorney accuses the Mayor of corruption for allowing Ted Sexton to consult on City aviation matters, including Montgomery Field and Sunroad. City Attorney accuses AA Chairman Bersin ofaiding the Mayor by agreeing to the "loaned executive" agreement. City Attorney states that agreement for Sexton's loan was solely to aid Sunroad because Feldman contributed to the Mayor's campaign.

Mayor holds press availability at his office and armounces there will be no alternative landing approaches allowed to accommodate the building.

Mayor's Office, by Sainz, issues "Fact Sheet" in response to reporter's question concerning Ted Sexton and City's arrangement with Airport Authority and states that Sexton was not brought on board to "manage" the Sunroad issue. Sainz says fact sheet not checked with Mayor, and some ofexplanation of Sexton's role was in error.

11 June 7/14, 2007 On Roger Hedgecock radio show Mayor Sanders responds to question and says Sexton was not brought in to work on the Sunroad building, but corrects that the next week, saying Sainz made error on Fact Sheet. June _,2007 Strauss for Sunroad makes 3d proposal to Waring, offering to take the building down to 166', release City from lawsuit, provide $75K to $1 million to Montgomery Field for improvements. Barwick and Sexton discuss this offer with FAA's Haggerty and Laird. June 11, 2007 Mayor sends memo to City Council re: Sunroad building, announcing decision that building must be reduced to 160'. Memo explains May 18 letter to FAA raising possibility of "circle south" approach pattern. Memo discloses Mayor's staff and Ted Sexton presented this proposal to FAA as outlined in May 18 letter. Memo states FAA proposed clearing airspace around the Sunroad building by adopting "circle south" approach and that Mayor has rejected that proposal. Memo also explains arrangement for Ted Sexton and advises that although Sexton did not "manage" Sunroad building issue, he did work on the matter. Memo asserts "loaned executive" agreement is legal and that City Attorney was aware ofit as DCA Catherine Bradley was at Council Rules Committee meeting when matter was discussed on April II. June 11, 2007 Ronne Froman resigns as Chief Operating Officer effective June 29.

City Attorney's budget is cut with respect to 14 Deputy City Attorney positions..

June 12, 2007 City Attorney Aguirre conducts press conference and publicly charges that Mayor Sanders had misled public about Sexton's role as a "loaned executive" and asserts that Sexton was brought in via a "secret agreement" to "assist Sunroad to evade federal air navigation safety regulations" and that this constitutes a "misuse ofpublic funds." Accuses Mayor ofa "cover-up" and of "improp~ractivity on behalfof a substantial campaign contributor [Feldman].'" June 13,2007 City Attorney Aguirre appears on KUSI morning news program and repeats allegations that Ted Sexton was obtained pursuant to a "secret letter" (the Sanders-Bersin exchange in March) and that Sexton was used to "circumvent FAA rules" and was "lobbying the FAA for Sunroad." Also says that after he issued his report on Sunroad [#17 on May 15], Fred Sainz called and said the "deal" regarding funding his DCA supplemental positions was off.

12 June 15, 2007 Union-Tribune publishes City Attorney's letter accusing the Mayor of corruption for (1) allowing campaign contributor Feldman to construct the building in defiance ofFAA standards and California law; (2) deploying Ted Sexton to lobby the FAA for changes to airplane routing so that Sunroad building could remain, thus misusing public funds for the benefit ofa campaign contributor; and (3) deception in describing Sexton's role.

June 15,2007 DCA Carmen Brock sends e-mail to Escdbar-Eck advising that City should not issue permits for deconstruction ofbuilding without knowledge of City Attorney's Office.

June 18,2007 City Attorney writes to FAA, Haggerty, and advises that the City is not requesting that the FAA modifY its August 16, 2006 determination of hazard regarding the Centrum building, specifically contradicting the

~ Sunroad offer to lower the building to 166'.

Shortly thereafter, Haggerty advises Wacing that FAA decision will not be changed.

June 19, 2007 By memo to Mayor and City Council, City Attorney requests that the Mayor issue a SWO for all work on the Centrum 12 building.

Mayor sends memo to City Attorney seeking advice on "implications ofthis action [total SWO]." Mayor advises that he is seeking legal opinion from outside counsel, Latham & Watkins, regarding legality of a total SWO. June 19,2007 City Attorney, by Head DCA David Karlin, writes letters to ThelIa Bowens, Ted Sexton and Alan Bersin ofthe AA, and Waring, Escobar- Eck and Kelly Broughton ofDSD announcing a criminal investigation of"whether public officials lobbied the FAA on behalfof Sunroad, a private entity, resulting in the unauthorized expenditure ofpublic monies."

City Attorney later personally called Sexton and Bowens and accused them ofcriminal conduct. City Attorney called Linda Johnson, another AA employee, and asked for her to tell him the truth, "confidentially."

13 June 20, 2007 By memo to Mayor and City Council, City Attorney writes regarding Sunroad's violation ofPUC section 21659 and City's involvement in allowing the violation and requesting that the Mayor order the building reduced to 160'.

Mayor writes to Attorney General to request investigation ofCity Attorney's "corruption" charges. June 21,2007 After receiving advice from outside counsel, Mayor directs issuance of total SWO and a statement ofthat he will work to require Sunroad to remove the top 20' ofthe building.

Restoration and Mitigation Order sent by Escobar-Eck on behalfof City to Sunroad to reduce height ofbuilding.

Mayor conducts press conference regarding developments ofthe day and announces his request that Attorney General investigate the City Attorney's "corruption" charges.

Attorney General responds to Mayor and agrees to investigate City Attorney's "corruption" charges. June 26, 2007 Sunroad announces it will lower building to height acceptable to the FAA. July 19, 2007 Mayor's office issues report: Investigation Concerning the Sunroad Centrum 12 Building. September, 2007 Sunroad begins deconstruction ofthe Centrum 12 building. November 19,2007 FAA advises Sunroad that building is no longer a hazard. Building at 158.7'.

14 Attachment 2 06/20/2007 15:57 Mayor'. Office ~ 96452319 NO. 631 1;1002

JERRY SANDERS MAYOR

June 20, 2007 .

The Honorable Edmund G.Brown, Jr. Attorney General . State of California P.O:Box 94255 Sacramento, CA 94244-2550'

., Dear Attorney General· BiOwn;

The pulpose ofthis letter is to fonnally request an inquiry' and evaluation into the allegations ofcorruption made by the San Diego City Attorney in his Union Tribune

.J ••• Letter to the Editor dated June 15,2007 (attached). Because ofthe serious llllture ofthese :allegations,it is necessary that a fully indepel)dent and s1dIled'agency such.as the­ :Attomey General's Offi~e look int!l these ·charges.: In addition,. it·is' requested that priority be given to this inquiry and evaluation.'

Thank you for your consideration.

Sincerely, ~~ Mayor

Attachment: Letter to Editor from the City Attorney, dated June 15,2007

CC: Dane Gillette, Chief, Criminal Division Gary W. Schons, Senior Assutant Attorney Gener~ San Diego

CITY AOlVllNfSTRAnON BUILprlllG, 202 C STREET. SAN OISGO. CALiFORNIA9210t (819) 23e-6~30

GpM1t(lM~';qJQI' Letters to the Editor San Diego Union-Tribune June 15,2207

Regarding "It's time to stop the name-calling" by Herbert G. Klein (Opinion, June 13):

When he took office, Mayor Jerry Sanders told the people ofthis city that "San Diego's municipal government has failed its citizens and become an embarrassing and corrupt impediment to progress."

He promised voters he would "tell the whole truth-what happened, why it happened and how it will be fixed." He represented he would change the "operating philosophy" at City Hall, which was one of "delay, deny or deceive."

Unfortunately, the mayor engaged in an embarrassing and corrupt course ofconduct when he allowed a campaign contributor, who had raised thousands ofdollars for the Sanders campaign, to construct a building near the city's allport at Montgomery Field in defiance of Federal Administration safety standards and California state law.

Moreover, the mayor engaged in a corrupt and embarrassing course ofaction'when he deployed the "highest level executive with the necessary expertise on these issues" from the San Diego Regional AirPort Authority, along with city staff, to lobby the FAA for changes to the routing ofairplanes at Montgomery Field so that the illegal building could remain. In doing so, Mayor Sanders misused thousands ofdollars ofpublic funds for the private benefit ofa campaign contributor.

When the facts ofthe mayor's misconduct began to leak out to the public, the mayor engaged in a campaign ofdelay, deny and deceive. '

The mayor delayed turning over pertinent documents for weeks. He denied that he was helping his campaign contributor to circumvent FAA rules. And he deceived by claiming "nothing could be further from the truth" in response to allegations he was misusing an AirPort Authority senior staffer to lobby the FAA to allow the illegal building to stay.

Klein addresses none ofthese facts. Instead, he attacks the City Attorney's Office for doing the very thing Mayor Sanders promised to do: tell the whole truth-what happened, why it happened and how it will be fixed.

Mayor Sanders can still recover and find his way, but he needs to do what he promised. No more delays, denials or deceptions. No more embarrassing, corrupt favors to campaign contributors. Rather, the mayor needs to tell us the whole truth, what happened, why it happened, and how it will be fixed so that it never happens again, as he promised.

MICHAEL AGUIRRE San Diego City Attorney Attachment 3 " ...... EDMUND G. BROWN JR. State of California ~ " Attorney General @ DEPARTMENT OF JUSTICE

455 GOLDEN GATE AVENUE. SUITE 11000 SAN FRANCISCO. CA 94102-7004

Public: (415) 703-5500 Telephone: (415) 703-5866 Facsimile: (415) 703-5877 E-Mail: [email protected]

June 21,2007

The Honorable Jerry Sanders, Mayor City Administration Building 202 C Street San Diego, CA 92101

RE: Request for InVestigation

Dear Mayor Sanders:

YourJune20, 2007 letterto AttorneyGeneral Brown has beenforwarded to meforresponse. In light ofthe serious allegations and the importance ofmaintaining publicconfidence in its elected, officials, the Attorney General's Office will, as you requested, investigate the charges ofpublic corruption. The investigation will be handled by the San Diego office ofthe Attorney General.

ThaJik you for bringing this matter to our attention.

Sincerely, \'YS:JJ~Vc~ DANE R. GILLETTE Chief Assistant Attorney General

For EDMUND G. BROWN JR. Attorney General Attachment 4 EDMUND G. BROWN JR. State of California Attorney General DEPARTMENT OF JUSTICE

110 WEST A STREET, SUITE 1100 SAN DIEGO, CA 92101 P.O. BOX 85266 SAN DIEGO, CA 92186-5266

Public: (619~ 645-2001 Telephone: (619 645-2275 Facsimile: (619 645-2319 E-Mail: [email protected]

June 22, 2007

Michael Aguirre City Attorney City of San Diego 1200 Third Avenue, Suite 1620 San Diego, CA 92101

RE: Allegations ofCorruption Against Mayor Jerry Sanders

Dear Mr. Aguirre:

Ina letter published in the Union-Tribune newspaper on June 15 you accused San Diego Mayor Jerry Sanders ofengaging in a "corrupt course ofaction" in connection with the construction ofthe Sunroad building near Montgomery Field. On June 20, Mayor Sanders wrote to Attorney General Brown to formally request that the Attorney General inquire into and evaluate your allegations ofcorruption as detailed in the letter published by the newspaper on June 15. On June 21, the Attorney General wrote to Mayor Sanders and agreed to investigate your charges ofcorruption against Mayor Sanders, noting "the serious allegations and the importance ofmaintaining public confidence in its elected officials."

I am now writing to request that you provide this office with a specification ofyour charges ofcorruption against the Mayor and to provide the Attorney General all materials, documents, the names ofwitnesses and any sources ofinformation or evidence which support your charges against the mayor.

Based on your letter, you seem to raise three allegations:

• "[T]he mayor engaged in an embarrassing and corrupt course of action when he allowed a campaigu contributor [presumably, Aaron Feldman, owner ofSunroad] ... to construct a buildingnear ... Montgomery Field in defiance ofFederal Administration safety standards and California state law." Michael Aguirre June 22, 2007 Page 2

• "[T]he mayor engaged in a corrupt and embarrassing course ofaction when he deployed the 'highest level executive with the necessary expertise on these issues' from the San Diego Regional Airport Authority, along with city staff, to lobby the FAA for changes to the routing ofairplanes at Montgomery Field so that the illegal building could remain. In doing so, Mayor Sanders misused thousands ofdollars ofpublic funds for the private benefit ofa campaign contributor [presumably, Mr. Feldman]."

• "Whenthe facts ofthe mayor's misconduct began to leak out into the public, the mayor engaged in a campaign ofdelay, deny and deceive."

First, the Attorney General requests that you specify what is the "corruption" on the part ofthe mayor with respect to these three allegations, and any other allegation of"corruption" you might have concerning the mayor. The Attorney General understands "corruption" in this context to include illegal acts, such as bribery (penal Code § 67 et seq.), conflict ofinterest (Gov. Code, §§ 1090; 1125 et seq.; 8920 et seq.; 87100 et seq.), misuse ofgovernment funds (penal Code, § 424 et seq.), a breach ofany applicable ethical ordinances ofthe city, any act or course of conduct which would constitute "a wrongful design to acquire or cause some pecuniary or other advantage to the person guilty ofthe act or omission referred to, or to some other person" ("corruptly", as defmed in Penal Code § 7(3.», and any course ofaction to cover-up or deceive so as to prevent discovery ofthese allegedly corrupt acts by competent officials orthe public.

Second, the Attorney General requests that you provide all materials, documents, the names ofwituesses and any sources ofinformation or evidence which would tend to substantiate your allegations ofcorruption against the mayor.

Once we have received the specifications ofyour allegations ofcorruption against the mayor and any material you might provide to support your allegations, we will review and evaluate your allegations and supporting matter and we will then arrange to meet with you and any member ofyour staffthat you might select to discuss your allegations and the materials.

The mayor has requested that the Attorney General give priority to this inquiry and we intend to do so, as the Attorney General is concerned that the serious charges you have publically leveled against the mayor be investigated expeditiously. Therefore, your prompt attention to this letter and response to our request for a specification ofyour allegations and supporting matter is critical. Finally, be assured that ifthe Attorney General determines that your allegations and Michael Aguirre June 22, 2007 Page 3 supporting evidence supports further action, the Attorney General will move forward as appropriate.

Sincerely,

GARY W. SCHONS Senior Assistant Attorney General

For EDMUND G. BROWN JR. Attorney General Attachment 5 EDMUND G. BROWN JR. State of California Attorney General DEPARTMENT OF JUSTICE

110 WEST A STREET, SUITE 1100 SANDIEGO, CA 92101 P.O. BOX 85266 SAN DIEGO, CA 92186-5266

Public: ~619) 645-2001 Telephone: 619) 645-2275 Facsimile: 619) 645-2319 E-Mail: [email protected]

July 12, 2007

Michael Aguirre City Attorney City of San Diego 1200 Third Avenue, Suite 1620 San Diego, CA 92101

RE: Allegations of Corruption Against Mayor Jerry Sanders

Dear Mr. Aguirre:

On June 22 I wrote to advise you that at the request ofMayor Sanders, the Attorney General had agreed to investigate your charges of corruption against Mayor Sanders leveled in a letter you wrote which was published in the San Diego Union Tribune on June 15. In my letter of June 22, I asked that specify your corruption charges, i.e., to explain why and how the activities of the Mayor set out in your letter were "corrupt," and to furnish this office with all materials, documents, the names of witnesses and any sources of information or evidence which support your charges. To date, I have not received response to that letter.

I am certain you can appreciate that time is ofthe essence in addressing your charges. While those charges linger unaddressed, public confidence in city government and its offi"cials is eroded and the business of the city cannot properly move forward. I am therefore requesting that by Friday, July 20, you take one of the following measures: (1) respond to the Attorney General's request for a specification of your corruption charges and provide corroboration for same, or, at a minimum, signal your intent to do so; (2) advise the Attorney General that you intend to make no response in this matter; or, (3) advise the Attorney General that you are withdrawing your corruption charges againstthe Mayor.

Your prompt response to this letter is appreciated.

Sincerely, . ~ ~",.~.--;­ . SCHONS ssistant Attorney General

For EDMUND G. BROWN JR. Attorney General Michael Aguirre July 12, 2007 Page 2 bce: Dane Gillette, CAAG Attachment 6 PRIVILEGED COMMUNICATION - ATTORNEY WORK PJ,WDUCT

. Report of Investigation Prepared for Independent Members of the San Diego County Regional .AirportAuthority Board

.,'

La Bella & McNamara LLP ~ 401 West "A" Street, Suite 1150 San Diego, CA 92101 Telephone: (619) 696-9200 Facsimile: (619) 696-9269 TABLE OF CONTENTS

I. EXECUTIVE SUMNIARY 1

IT. FACTUAL FINDINGS : :.: 7

A. AIRPORT AUTHORITY'S MISSION : 7

B. LAND USE MISSION 8

C. AIRPORTS AND AFFECTED JURISDICTIONS 9 ill. GENESIS: CITY ATTORNEY'S ALLEGATIONS 10

A. POTENTIAL VIOLATIONS 11

N. INTERNAL INVESTIGATION : 12

A. SCOPE OF INTERNAL INVESTIGATION : : 12

B. AIRPORTAUTHORITY - CITY OF SAN DIEGO COORDINATION ISSUES 14

C. REOUEST FOR ASSISTANCE ON SUNROAD ISSUE 16

D. CITY'S PRESENTATION TO FAA ON SUNROAD 21

V. STATUTORY SCHEME ADDRESSING PUBUC ENTITY'S OBUGATION TO PROVIDE A DEFENSE 23

A. GOV. CODE 995.8 - CRIMINAL .., 23

B. CNIL , 25

VI. OPTIONS CONCERNING INTERNAL INVESTIGATION REPORT 26

VIT. CONCLUSION .27

i I. EXECUTIVE SUMMARY

• Pursuant to state law, an airport land use commission, such as the San Diego County Regional Airport Authority ("Airport Authority"), has the power and duty to "assist local agencies in ensuring compatible land uses in the vicinity of all new airports and in the vicinity of existing airports to the extent that the land in the vicinity of those airports is not already devoted to incompatible Uses." Cal. Public Utilities Code § 21674(a).

• There is a long history of a lack of coordination between the City of San Diego ("city") and the Airport Authority relating to land use surrounding the airports within the City;

• The Federal Aviation Administration ("FAA") has made it clear to the Airport Authority and its predecessor agency that it was not satisfied with the City's performance in its operation of Brown and Montgomery Fields. The Airport Authority was willing to assist in mending that fractured relationship;

• A new dialogue between the Airport Authority and the City began when Mayor Sanders took office; .

• In March 2006, there was a formai agreement between the City and the San Diego Unified Port District (the "Port") through which the Port loaned the City a senior executive to assist the City in reviewing its "contracting policies." The agreement is noteworthy because it demonstrates how Mayor Sanders was determined to work with other public entities to tap their expertise for the benefit of the City. This agreement - signed only by Ronne Froman on behalf of the City- was later used as a "go by" for the agreement involving Ted Sexton;

• The first formal request from the City to the Airport Authority for assistance came in June 2006 when Mayor Sanders - by letter - as.ked the Airport Authority to consider "assuming control of Brown and Montgomery Fields." The Sanders letter refers to informal discussions between City staff and Airport Authority staff that predated this June 2006 letter;

• In early August 2006, the Airport Authority agreed to explore this idea and proposed bringing in the FAA to assist in the discussions concerning regulatory considerations relating to such an arrangement;

• A non-public study was undertaken by the Airport Authority and a report was circulated internally;

-1- . 13248 • Late in 2006, the City and Airport Authority had preliminary talks about lending an Airport Authority executive to the City, just like the Port had done months earlier. This occurred after the conversations relating to Brown and Montgomery Fields;

• On December 13, 2006, Thella Bowens and Ted Sexton met with Ronne Froman and City staff to discuss the Montgomery-Brown proposal. At the meeting the City proposed the Airport Authority "lease" Brown and Montgomery Fields from the City. It may have been at this meeting that the Sunroad matter was brought up in a general way, as an example of a need for closer coordination between the City and Airport Authority. If so, this was the first mention by City officials of Sunroad that anyone can recall. It was two days later that the City filed its civil case against Sunroad. While the "Montgomery-Brown leasing" proposal was of little interest to the Airport Authority, no decisions or positions were taken at that December meeting;

• In December 2006, when Alan Bersin was coming on board at the Airport Authority, he had introductory and preliminary discussions with Mayor· Sanders and Airport Authority staff. Some time in late January 2007, the idea of loaning an Airport Authority executive to the City was again raised. As best we can determine, it initially arose out of the perceived need for closer coordination between City and the Airport Authority relating to land use surrounding airports. By January the Sunroad issue was certainly a part of the concern and a focus of City officials. Indeed, in . December the City Attorney:s Office had commenced a civil action against Sunroad concerning the construction;

• By late January, the Mayor informally asked Alan Bersin for the Airport Authority's assistance to help the City with land use issues including Sunroad. In particular, the idea of a loaned executive was discussed. While the discussions included many issues, it appears from the City's perspective that Sunroad was its principal concern;

• In February, there was a meeting scheduled between the Airport Authority staff (Bowens, Sexton, and Shafer-Payne), two of its board members (Bersin and Watkins) and the City staff (Jim Waring, Bill Anderson, and Marcela Escobar-Eck) concerning coordination between the two entities. At that meeting, an executive loan was proposed informally;

• After consulting with its legal department, the Airport Authority staff . pursued the idea of loaning an executive to the City for the purpose of "getting the aviation issues of the City untangled." [See Exhibit 1 to this Report.] We saw no evidence suggesting that the Airport Authority was· motivated by or intended to benefit Sunroad or any private developer. To the contrary, the relevant·documents and statements of those involved

-2- 13248 suggest only a willingness by the Airport Authority staff to fulfill part of its mission to assist local agencies on airport land use issues. In sum, we found no suggestion of a conspiracy to manipulate the FAA or to benefit Sunroad;

• The focus of the Airport Authority was to address the lack of coordination and consistency on land use issues between the City and the FAA. An executive assigned to the City could begin a process and procedure that would ensure regular coordination. By February 2007, the City's primary focus was the Sunroad issue. It was a front page example of what can happen if the City fails to coordinate with the Airport Authority and/or the FAA involving developments in the vicinity of airports within the City.

• Sunroad was the centerpiece of the City"s request for assistance. Indeed, Mayor Sanders' letter to the AirportAuthority requesting assistance .focused only on the Sunroad issue. While the conversations that preceded the letter apparently included other issues, this was the sole reason offered by the City in Mayor Sanders' March 2, 2007 letter; ,

• After consultation with its legal department, byletter dated March 12, 2007, the Airport Authonty agreed to the executive loan. The executive, Ted Sexton, was scheduled to begin on April 1, 2007:

• The executive loan was not viewed as a "policy decision" by Airport Authority executives, but rather an operational decision. Ms. Bowens asked the legal department for input on this issue before making that detennination. As a result, it was not sent to the Board for approval. We found no evidence of an intent to avoid Board approval. Rather, the decision was made - after consultation - that it was an operational decision which did not need Board approval. On May 3, 2007, ThelIa Bowens nevertheless briefed the Board on the executive loan;

• On April 11, 2007, Alan Bersin addressed City Council's Rules Committee. The meeting was attended by - among others - ,Council Member Donna Frye and a representative of the City Attorney's Office. At that presentation, Alan Bersin explained the executive loan of Ted Sexton;

• During April and May 2007, Ted Sexton hail.d1ed several matters while on an assignment to the City. However, the central issue he addressed when he began at the City was Sunroad. It was the City's and his principal focus at that time. It is important to note, however, that Mr. Sexton also addressed many non-Sunroad matters during this time, including the City's publication of "FAA Notification Requirements," which is outlined in detail below;

-3- 13248 • Ted Sexton attempted to mend the damage between the City and the FAA relating to Sunroad by beginning a dialogue between these parties in order to address FAA concerns;

• When Ted Sexton began at the City in April 2007, there were certain events that had already occurred:· (i) there was a building near Montgomery Field that already stood at 180 feet; (ii) the FAA had declared that this building at that height presented a hazard; and (iii) the City Attorney had already commenced a civil action against Sunroad relating to the structure; ,

• Within one or two days after Ted Sexton joined the City, the City Attorney also commenced a criminal case against Tom Story, a Sunroad executive;

• Neither Ted Sexton nor the Airport Authority had any participation in the events that lea to the construction of the 180 foot building near Montgomery Field or the commencement of either the civil or criminal actions by the City Attorney. Long before Ted Sexton was assigned to the City, the developer submitted an application to the City for a permit without fIrst obtaining FAA review as mandated under 14 C.F.R. Part 77.13 (2006);

• The Sunroad development fell within the designated Airport Influence Area ("AlA") for Miramar Airport. As such, the proposed developIr!-ent should have been submitted to the Airport Authority's Land Use Committee before the requested permits were issued.

• On the Sunroad issue, Ted Sexton viewed his mission as follows: (i) impress upon the City the signifiCance of the issues implicated by the height of the building and FAA concerns; (ii) impress upon the City that the FAA was not a paper tiger and could not be ignored; and (iii) as an aviation expert and former military pilot, address the safety issues while the building remained at 180 feet vending the outcome of litigation;

• Ted Sexton met with Sunroad principals on two or three occasions- and only then when he was asked to attend meetings with City staff who were meeting with Sunroad officials;

• Ted Sexton immediately began to educate the City and Sunroad about the serious nature of this issue - a building standing at 180 feet very close to Montgomery Field. At his initial presentation to the City, he impressed upon the City Officials the seriousness of the FAA concerns and its mandate under 14 C.P.R. Part 77. At the City's request, Ted Sexton later made a similar presentationjointiy to the City and Sunroad Officials. Thereafter, in Ted Sexton's estimationthe City and Sunroad appeared to

-4- 13248 appreciate how serious the situation was and how the FAA concerns must be addressed;

• Working with the City, the FAA, and Sunroad representatives, Ted Sexton came up with several options concerning operation of the airport given the reality of a building stailding at 180 feet;

• The draft options were to be presented to the FAA by the City - with Ted Sexton present for assistance - in late May 2007. The draft options were circulated by Ted Sexton to all stake holders including FAA, Sunroad, and the City prior to the presentation to the FAA;

• In the proposal, 86% of the building height was reduced to 166.3 feet and 14% to 178 feet. The flight approaches were modified to restore flight safety margins;

• By letter dated May 18, 2007, Mayor Sanders wrote to .the FAA in advance of the presentation. In his letter, a copy of which was sent to the City Att?rney, he informed the FAA:

(i) That he took responsibility for the fact that no stop work order was issued after the City knew ofFAA concerns;

(ii) That lie supports the FAA's finding that the height must be reduced to avoid a hazard to public safety; and

(iii) The City staff will present a "proposal" that hopefully the FAA will consider but that the City will support whatever FAA's ultimate judgment was on the issue.

• Since a copy of the letter was sent to the City Attorney, the entire City Council, and others, neither the meeting nor the City's position was a secret. With this letter of introduction, the City made its presentation to the FAA on May 22,2007 in Texas. The FAA Officials present were mildly supportive of the concepts as it related to the safety issues. However, since the proposal implicated alterations to flight approaches, the FAA suggested that they be vetted with FAA's regional office in Los Angeles;

• Mr. Sexton and City Officials did meet with the FAA in Los Angeles on the proposed flight approach modifications. The FAA officials agreed to consider the proposed modifications;

• Shortly after the Los Angeles FAA meeting, the City withdrew the proposal it outlined to the FAA. Instead, it adopted a more stringent

-5- 13248 position that the building had to come down to 160 feet and it would not pursue modified flight approaches at all;

• We found no evidence of any "lobbying efforts" by Ted Sexton concerning any particular action by any government entity. In fact, Ted Sexton's work product that was presented to FAA presented options by the City - not Sunroad - that were calculated to make operation at Montgomery Field safe while the building penetrated the 160 foot mark by 20 feet. It was evident that the ultimate height of the building was going to be determined either: (i) through a negotiated settlement between the City and Sunroad, or (ii) the result of a judicial determination in the pending lawsuit;

• As to "lobbying" efforts more generally, despite the City Attorney's comment that Ted Sexton's efforts with the FAA constituted "lobbying," . the law is to the contrary. Indeed, public officials acting within the scope of their employment are exempt from the provisions of the lobbying ordinance. Thus, as a matter of law, a public official who is acting within the scope of his/her authority does not "lobby." Here, we found nothing to suggest that Ted Sexton or anyone else at the Airport Authority was acting outside the scope of his/her employment. To be sure, Ted Sexton's technical expertise was precisely what the City got in requesting his temporary assignment to the City. It is also clear that in lending its executive to the City, the Airport Authority intended to provide technical assistance to the City consistent With its mission, operational directives, and enabling legislation in the hope· of improving the overall coordination between the City and the Airport Authority;

• We found no evidence that anyone at the Airport Authority directly or indirectly suggested an ultimate resolution of the dispute between the City and Sunroad. The dispute was the subject of a pending lawsuit commenced by the City Attorney months before Ted Sexton was ever assigned to work with the City. The work of the Airport Authority and its loaned executive only addressed the safe operation of Montgomery Field giventhat the building stood at 180 feet;

• We found no evidence that anyone from the Airport Authority acted outside the scope of their employment or authority in lending Ted Sexton to the City or in supervising his efforts;

• We found no evidence of any improper actions by any Airport Authority employee in connection with this matter;

• The allegations leveled by the City Attorney seem to emanate from the fact that the City - not the Airport Authority - decided to exclude the City Attorney from its conversations with Sunroad officials and the FAA. This

-6- 13248 appears to be the result of the fractured and dysfunctional relationship that exists between the City and its attorney, which has been the subject of extensive reports and articles. For whatever reason, the Mayor chose to exclude the City Attorney from the discussions with Sunroad officals and the FAA. It appears this exclusion led to the claims of impropriety leveled by the City Attorney;

• The exclusion of the City Attorney was not the result of any suggestion or direction by anyone at the Airport Authority.

• The Airport Authority was at all times open about the executive loan. In fact, on April 11, 2007, Alan Bersin made a presentation to San Diego's Rules Committee and addressing - among others - Council Member Donna Frye and a representative of the City Attorney's Office, advised them of the executive loan of Ted Sexton to the City. likewise, on May 1, 2007, the Airport Authority Board was advised about the program. These are not - in our view - the actions of conspirators attempting to keep the assignment confidential;

• There is simply no evidence of a conspiracy by anyone at the Airport Authority. Similarly, there is no evidence of any efforts to lobby on behalf of Sunroad. The executive loan that brought Ted Sexton to the City as a technical advisor was consistent with the Airport Authority's mission , and the law. Moreover, the program benefited the Airport Authority, the City, and citizens of San Diego as is evidenced by - among other things ~ the "FAA Notification" posting on the City's web page which is detailed below;

• Nor is there any evidence that anyone at the Airport Authority sought to side step the Authority's Board or violate the Brown Act. These accusations, made by the City Attorney, are inconsistent with the facts we have discovered regarding the assignment, its intended purpose, and its accomplishments. n. FACTUAL FINDINGS

A. AIRPORT AUTHORITY'S MISSION

The San Diego County Regional Airport Authority was created on January 1,

2003, as an independent agency to manage the day-to-day operations of San Diego

International Airport and address the region's long-term air transportation needs.

-7- 13248 The legislation thatcreated the Airport Authority mandates three principal

responsibilities:

• Operate San Diego International Airport;

• Plan for the future air transportation needs of the region; and

• Serve as the region's Airport Land Use Commission and ensure the

adoption of land use plans that protect public health and safety

surrounding all 16 of the County's airports.

It is this third mission that is most relevant for present purposes. Indeed, pursuant

to state law, an airport land use commission such as the Airport Authority has the power and the duty to "assist local agencies in ensuring compatible land uses in the vicinity of all new airports and in the vicinity of existing airports to the extent that the land in the vicinity of those airports is not already devoted to incompatible uses." See Cal. Public

Utilities Code § 21674(a)..

B. LAND USE MISSION

As stated above, a critical component of the Airport Autherity's responsibility is to serve as the region's Airport Land Use Commission, to promote the adoption of land use plans that protect public health and safety surrounding all 16 of the County's airports, and to assist local agencies on issues relating to land use in the vicinity of airports. The following chart demonstrates the number of local agencies and jurisdictions the San

Diego Regional Airport Authority interacts with in order to accomplish this goal:

-8- 13248 C. AIRPORTS AND AFFECTED ,JURISDICTIONS

AIRPORT I OWNERSHIP JURISDICTIONS AFFECTED

Agua Caliente Airport County of San Diego County of San Diego

Borrego Valley Airport County of San Diego County of San Diego Brown Field Municipal Airport City of Chula Vista, City of San Diego, City of San Diego County of San Diego

Fallbrook Community Airpark County of San Diego County of San Diego ,

Gillespie Field City ofEl Cajon, City of La Mesa, City of County of San Diego Santee, City of San Diego, County of San Diego

Jacumba Airport County of San Diego County of San Diego

McClellan-Palomar Airport City of Carlsbad, City of Oceanside, City County of San Diego ofSan Marcos, City of Vista, County of San Diego

Montgomery Field City of San Diego City of San Diego

Oceanside Municipal Airport City of Oceanside City of Oceanside

. Ocotillo Airport County of San Diego County of San Diego

Ramona Airport County of San Diego County of San Diego

San Diego futemational Airport City of Lemon Grove, City of National San Diego County City, City of San Diego, County of San Regional Airport Authority Diego,

-9- 13248 MILITARY AIRPORTS

Marine Corps Air Station Camp Pendleton City of Oceanside, City of Vista, County of (Munn Field) San Diego

Marine Corps Air Station Miramar City of Del Mar, City of Poway, City of , Santee, City of Solana Beach, City of San Diego, County of San Diego

Naval Air Station North Island City of Coronado (Halsey Field) City of San Diego

Navy Outlying Field Imperial Beach City of Imperial Beach (Reem Field) City of San Diego ,

III. GENESIS: CITY ATTORNEY'S ALLEGATIONS

The current controversy arises from a series of "allegations" leveled by San Diego

City Attorney Michael Aguirre and the statement that his office is conducting a "criminal

investigation" of certain activities of Airpo~ Authority employees. In particular, the City

Attorney has suggested publicly that by detailing one of its employees (Ted Sexton) to

, the City, the Airport Authority: (i) improperly assigned an Airport Authority executive to

the City to lobby the FAA on behalf of Sunroad; (ii) conspired with the City and/or San

Diego's Mayor to improperly use public funds; and (iii) violated the Brown Act., There

are several other related allegations he has mentioned from time to time (including that

the Airport Authority Board had to approve the executive assignment before it coUld be

authorized), but the core allegation emanates from the City Attorney's belief that Ted

Sexton's assignment to the City was simply an effort - by the City and the Airport

Authority - to lobby the FAA on behalf of Sumoad.

The City Attorney's allegations have come in waves. First, he called the Airport

Authority's General Counsel and made a series of statements about the "conspiracy" he

-10- 13248 believed was afoot. Second, Mr. Aguirre's office sent letters to three Airport Authority

executives advancing his conspiracy theory. Third, Mr. Aguirre appeared at an Airport

Authority Board Meeting and articulated additional allegations of improper behavior by

Airport Authority executives. Finally, Mr. Aguirre called at least one Airport Authority

employee and offered her an opportunity to tell him confidentially "the truth" about the

conspiracy he perceived.

The City Attorney's theory is that Ted Sexton's salary - which at all times was

paid by the Airport Authority - was a gift of public funds to Sunroad so that Ted Sexton

could lobby the FAA on behalf of Sunroad. According to Mr. Aguirre's theory, since , Sunroad principals apparently contributed to Mayor Sanders' campaign, the "lobbying"

efforts of Ted Sexton on behalf of Sunroad were in return for the Sanders' campaign

contributions. Given these allegations, the circumstances leading to Ted Sexton's

assignment to the City of San Diego and his activities while assigned to the City are

important.

A. POTENTIAL VIOLATIONS

In his various pronouncements on the executive loan of Ted Sexton to the

City, the City Attorney has opined that the loan may constitute:

(i) A ruisuse of public funds;.

(li) A theft of funds; and

(iii) Use of public resources for unauthorized purposes.

While Mr. Aguirre offered very little in support of these public pronouncements,

when made by a public official they must be taken seriously.

-11- 13248 Although the City Attorney's ability to bring charges in the Sunroad matter has been seriously questioned by Judge Michael Wellington given the findings of conflict made in Judge Wellington's decision we assume for our analysis that the City Attorney could file charges.

IV. INTERNAL INVESTIGATION

Given the scope of the allegations, the public manner in which these allegations were announced, and the source of the allegations, the independent members of the

Airport Authority Board properly directed the General Counsel to conduct a full internal investigation to determine if any of the allegations had any merit. As a result, we were engaged to assist in the investigation and our efforts are outlined below.

A. SCOPE OF INTERNAL INVESTIGATION

The allegations made by Mr. Aguirre dictated the initial scope of the internal investigation. As with any internal investigation, the goal was to determine whether there was any substance to the allegations. We were given no instmctions other than follow the facts wherever they may lead. We were given full access to individuals and to documents.

Given that Mr. Aguirre's allegations centered around the employee loan of Ted

Sexton and the role of Thella Bowens and Alan Bersin in that loan, that is where we centered our investigation. We of course interviewed Thella Bowens, Alan Bersin, and

Ted Sexton.

In addition, as set forth in more detail below, we searched electronic data and reviewed hard documents related to Mr. Sexton's assignment.

-12- 13248 We began our inquiry by meeting with attomeys from the Airport Authority

General Counsel's Office for background and assistance in gathering materials and in order to gain its perspective on the allegations conveyed in writing and orally by Mr.

Aguirre. With this background, we began our investigative work.

We obtained the Airport Authority's electronic mail databases for Alan Bersin,

Thelia Bowens, and Ted Sexton. In order to insure that we reviewed each and every relevant document and electronic mail, we compiled a list of keywords. [See Exhibit 2 attached to this Report.] The AirportAuthority electronic mail databases for Alan

Bersin, Thelia Bowens, and Ted Sexton were then searched for any email containing a keyword, and those emails we~e printed. In total, we printed and reviewed more than

1,450 electronic mail messages derivedJrom the keyword search of the Airport Authority database. We also obtained Ted Sexton's email database for his City mailbox. Because the City uses an email system in which it is'more difficult to run keyword searches, every

Ted Sexton City email was reviewed.

We also retrieved and reviewed electronic and private calendar entries for the relevanttime period and portions oftelephone message pads. Finally, we reviewed the tape of the April 11, 2007 presentation of Alan Bersin to the San Diego City Council

Rules Committee regarding the loan of Ted Sexton to the City as well as the CEO's report to the Airport Authority Board on May 3,2007 - discussing Ted Sexton's assignment and mission. We then interviewed each of the employees involved in the assignment of Ted Sexton to the City.

We are confident that the scope of our searches identified all relevant documents related.to Ted Sexton's assignment to the City. We feel we have interviewed all

13248 necessary witnesses. We did this so that we could say with confidence that in light of the

serious allegations made by the City Attorney, the. internal investigation followed the facts to wherever they led without reference to a person's position or authority. Based

upon that review we present the following detailed findings.

B. AIRPORT AUTHORITY - CITY OF SAN DIEGO COORDINATION ISSUES

One thing is clear from our interview of Airport Authority executives and a

. review of the documents: The coordination between the City and the Airport Authority

(and its predecessor) has been rough and spotty at best. The evidence of this has manifested itself in several different ways. First, Airport Authority·executives were aware that the FAA has been very dissatisfied for some time with the performance and responsiveness of San Diego in the operation of Montgomery and Brown Fields. Indeed, the FAA had complained to Airport Authority executives on several occasions about the

City's refusal to respond to issues raised by the FAA. In fact, Mr. Sexton's work with the

City confirmed that on several occasions the City had failed to reject incomplete

applications for building permits which - pursuant to 14 C.P.R. Part 77.13 (Construction

or alteration requiring notice) - were required to include proof of an FAA review of the

application due to its proximity to an existing airport. [See relevant portion of 14 C.F.R.

Part 77.13 - attached as Exhibit 3 to this Report.] Airport Authority executives were well

aware that the relationship between the City and the FAA was strained long before the

Sunroad issue ever arose.

Second, for several years there has been a tension between the Airport Authority

and the City over the City's sporadic and inconsistent referral of development projects for

"consistency reviews" in the areas surrounding airports in the City. These areas include

-14- 13248 projects within a defined Airport Influence Area ("AIA"). [See Exhibit 4 attached to this'

Report.] The City should have been sending all these projects to the Airport Authority for a "consistency review" before any pennits were issued. I Occasionally, the City would send items to the Airport Authority for review, but most often it would not. There' apparently was no consistency or fixed procedures in place at the City. While the Airport

Authority. cannot take action on the proposed use, it is. charged with determining consistency within areasimpacting the airports. In addition, the Airport Authority's review would certainly reveal a developer's failure to obtain FAA review of a particular project that is within the navigable area as defined in 14 C.F.R. Part 77.13.

In the Suuroad situation, had the City sent Sunroad's application to the Airport

Authority, even a cursory review of the developer's application to the City would have revealed that it was incomplete since'it did not contain lll\FAA "7460"1." This is the common reference to identifying the form used to request an FAA aeronautical case study for obstruction evaluation of a building, alteration, or new construction project that may affect navigable air space as defined in 14 C.F.R. Part 77. Indeed, underPart 77, such a determination should have been included by the developer when it applied for a permit. Apparently the City did not note the missing authorization. Since the City did not send the project to the Airport Authority for a consistency review - where it is likely this omission would have been detected - the permit was issued without the FAA detennination. As noted below, because of Ted Sexton's assignment to the City, this

AlA's are separate and distinct from Mandatory Notification Areas as ontlined in 14 CPR Part 77.13. To be sure, the AlA's are much more restrictive in scope than the Mandatory Notification Areas as defined by the FAA. In this case, the AlA for Montgomery Field does not include the site of the new Sunroad building. In fact, the building falls just outside the AlA for Montgomery Field, but within the AlA for Miramar. [See generally Exhibit 4 to this Report.] The Mandatory Notification Area for Miramar and Montgomery as defined by the FAA both include the site of the Sunroad development. [See Exhibit 5 attached to this Report.]

-15- 13248 process has been corrected and now there is a procedure in place to reject such incomplete applications. [See Exhibit 6 to this Report.]

Third, shortly after Mayor Sanders took office, a new dialogue began between the

City and the Airport Authority. The City - apparently unhappy operating Montgomery and Brown Fields - was interested in getting out of the airport business. This provided an impetus for a dialogue between the City and the Airport Authority. The first formal request for assistance from the City came in June 2006 when Mayor Sanders asked the

Airport Authority to consider "assuming control of Brown and Montgomery Fields." The letter, Exhibit 7 attached to this Report, refers to earlier (pre-June 2006) informal discussions on the issue between City Staff and the Airport Authority.

In December 2006, Airport Authority executives - ThelIa Bowens and Ted

Sexton - met with City officials to discuss the matter. At that meeting the City proposed

-"apparently for the first time - thatthe Airport Authority consider "purchasing" or

"leasing" Brown and Montgomery Fields from the City. Up to that point no one recalls" any mention of the Suuroad issue. It may be that it was first mentioned by City Officials at that meeting, but it is not at all clear. IfSunroad was mentioned at that time, it was only an example of a larger coordination problem between the City and Airport

Authority.

C. REQUEST FOR ASSISTANCE ON SUNROAD ISSUE

With this background and against this backdrop, the City asked the Airport

Authority to provide assistance and expertise.

It is clear from our interviews as well as documents we reviewed that a more cooperative dialogue between the Airport Authority and the City began shortly after

-16- 13248 Mayor Sanders took office. In December 2006, the composition of the Airport Authority

Board changed. This too presented an opportunity for a more cooperative attitude.

Between mid December 2006 and mid February 2007, the issue of coordination and assistance was raised by the City and a specific request for technical assistance was made. By January and February 2007, the idea of a "loaned executive" had been discussed. This was not the first time the new Mayor had requested technical assistance in the form of personnel from another governmental agency. In fact, in March 2006, months before the conversations with the Airport Authonty began, the San Diego Unified

Port District and the City entered into a formal agreement through which a District employee - Tony Heinricks - was loaned to the City to assist on contracting issues. The

City sought to tap the expertise of a Port executive.

These factors are relevanUn placing in context the discussions in late 2006 and early 2007 which led to Ted Sexton's assignment to the City. The Port executive loan not only provides context but also provides insight into the motivations at play at the City and Airport Authority.

On February 7, 2007, ThelIa Bowens sent an email to Jim Wacing at the City addressing the coordination issues previously discussed and specifically addressing the prospect of the agencies working together. The e-mail, Exhibit 8 to this Report, provides:

Jim,

Alan asked me to coordinate a meeting with you, your staff, Authority staff and a couple of our Board members (Alan and Watkins) on Monday, Feb 12, if possible...Purpose ofthe gathering is to identify ways we can work together in a way that both our agencies can come out on top. I know this is short notice but let me know if Monday doesn't work, what does.

[See Exhibit 8 attached to this Report (emphasis added)].

-17- 13248 Far from evidencing a desire to assist Sunroad or to lobby on its behalf, this email demonstrates that at the time the assistance was being discussed, it was contemplated as a means to benefit both agencies and not some private party or to advance some hidden agenda. 2 A meeting was held in the City Administration Building on February 12, 2007, which was attended by Thella Bowens, Ted Sexton, Alan Bersin, and City staff.

A couple of weeks after this meeting, by letter dated March 2, 2007, Mayor

Sanders formally requested the Airport Authority's technical assistance. [See Exhibit 9 attached to this Report.] The request for assistance focused specifically on the Sunroad building issue near Montgomery Field. The day before the letter was sent, Thella

Bowens referred to the proposed "loaned executive" as something "aimed at getting the aviation issues of the [Clity untangled:" [See Exhibit 1 attached to this Report.]

Similarly, the Airport Authority's March 12, 2007 response to Mayor Sanders alluded to additional important reasons why the assistance was in the public interest - including

,providing assistance on the Sunroad issue - and agreed to provide a six month assignment of an Airport Authority employee. Ted Sexton was the logical choice to provide the expertise needed by the City. [See Exhibit 10 attached to this Report].

The Airport Authority entered into a Memorandum of Understanding ("MOU") , ! for the employee loan.3 The MOU, attached as Exhibit 11 to this Report, included broad

2 Mr. Aguirre's suggestion that the Airport Authority Board was kept in the darkabout its efforts to coordinate with the City appears incorrect. Here Mr. Watkins - an independent Airport Authority Board Member - was invited to the meeting. While Mr. Watkins apparently did not attend, he was invited to attend and the issues were not closely held. Moreover, Ms. Bowens reported to the Board on May 2007 about the executive loan and Mr. Bersin reported it to the San Diego City Council's Rules Committee two weeks earlier.

3 The MOU was signed by Thella Bowens and Bret Lobner on behalf of the Airport Authority, and Ronne Froman on behalf ofthe City. We understand that the City Attorney's Office was not asked to

-18- 13248 language about the scope of Mr. Sexton's duties and responsibilities. Although Sunroad

was one of the issues to be addressed during the detail, there were many others. [See

~ Exhibit 12 to this Report.]

A review of Ted Sexton's regular activities at the City between April and June

2007, when Mr. Aguirre made his allegations, reflect that Mr. Sexton's mission and

'responsibilities in !act included many issues. However, it is also clear that Sunroad was

the mos,t immediate and pressing issue when he began at the City in April 2007. ill it

report to the Airport Authority General Counsel, Mr. Sexton detailed the issues he

worked on during the initial months of his assignment. [See Exhibit 12 to this Report.]

In addition to a great deal of work on the Sunroad matter, Mr. Sexton's

memorandum reflects a variety of projects that were of mutual benefit to the City and

Airport Authority - which is consistent with Ms. Bowens' February email to Mr. Waring

that the two agencies could work together "in a way that both our agencies' can come out

on top." [See Exhibit 8 attached to this Report.] For example, on July 13,2007, new

"FAA Notification Requirements" were posted on the City's Development Services

D¢partment's webpage. This notice made public on the City's web page the fact that all

applicants to the City for building permits within 20,000 feet of a civilian or military

airport must first submit a "Notice of Construction or Alteration" to the FAA prior to

obtaining building permits and that the City will not recommend approval of a project

without an FAA determination of "No Hazard to Air Navigation" for the project. [See

Exhibit 6 to this Report.]

review theMOU and was not infonned of the MOU by the Mayor's Office. That appears to have been a decision made by the City - certainly no one from the Airport Anthodty had a hand in that decision.

-19- 13248 ',,­

The fact that this notice was created - consistent with FAA requirements (See 14

C.P.R. Part 77.13 (Notification Criteria)) - is directly attributable to the fact that Ted

Sexton was assigned to the City. Mr. Sexton's assignment enabled him to assist City

officials in understanding the FAA requirements and in constructing a policy and

procedure to insure that no application for a building pennit within the area defined in

Part 77.13 will be considered without the appropriate FAA review.

This sort of coordination is precisely the type ofinteraction Ted Sexton, Thella

Bowens, and Alan Bersin explained to us that the Airport Authority was seeking with the

executive loan. The long term implications of Ted Sexton's efforts in this regard should

not be overlooked or underestimated. To be sure, his assignment to the City has

contributed substantially to the health and safety of San Diego citizens by virtue of the

process and procedural changes he has helped impliment.

Both the MOD and Ted Sexton's day-to-day activities support the proposition that the loan transcended the Sunroad issue. However, our review of the Airport Authority's mission and statutory duties make the following clear: Even ifMr. Sexton was loaned

only to assist the City on the Sunroad issue, that falls squarely within the AiJ;port

Authority's mission and duties.

In short, even if we were to ignore the communications and correspondence that

preceded Mayor Sanders' March 2007 letter about Sunroad, lending assistance to the City

for the sole and exclusive purpose of assisting the City on the Sunroad matter was

perfectly legal and indeed mandated under the Airport Authority's enabling legislation.

In other words, if Ted Sexton's assignment was motivated solely and exclusively by the

-20- 13248 Sunroad dispute, once the City asked for assistance, it was proper, legal and indeed

mandated that the Airport Authority lend assistance.

We found no evidence of conspiracy or sinister motives by any Airport Authority

executive or Board member in the assignment, the process in making the assignment or

the execution of the assignment. Based upon our review of all the information-

documents, electronic data and witness interviews - the motives of those of those

involved in the executive loan decision seem entirely consistent with Airport Authority

mandated responsibilities.4

D. CITY'S PRESENTATION TO FAA ON SUNROAD

After working with the City, Mr. Sexton prepared - at the City's request - a

PowerPoint presentation of Montgomery Field operating procedure modifications which

could be implemented to resolve the Sunroad crisis. A meeting was scheduled with the

4 Mr. Aguirre has alleged that Mayor Sanders was motivated to assist Sumoad because of campaign.:· contributions. True or not - this allegation is outside the scope of ourinvestigation. However, Mr. Aguirre has also suggested that Alan Bersin contributed to Mayor Sanders' campaign - and further implies a conspiracy motive because of these contributions. However, our review of Mayor Sanders' contribution reports reveals that neither Alan Bersin nor his wife apparently ever contributed to Sanders' campaign (or the strong Mayor initiative which Sanders championed). Our review of campaign records did not show any contributions to any Sanders' campaign by either Ted Sexton or Thelia Bowens. If there were any such contributions, we did not see them on the reports we reviewed. Even if such contributions had been made, the suggested inference seems qnite far-fetched. Ifone were to speculate on a conspiracy theory, however, it is interesting to note that the Airport Authority's counsel questioued the timing ofMr. Aguirre's allegations involving the Airport Authority. It .seems that the day after Alan Bersin announced on a local radio program that he may well be a candidate for City Attorney and willing to run against the incumbent Mr. Aguirre, Mr. Aguirre's Office sent letters to the Airport Authority - including to Alan Bersin - announcing its "criminal" investigation and alleging an Airport Authority - San Diego "conspiracy." In particular, the letter states:

The Criminal Division of the San Diego City Attorney's Office is currently investigating activities associated with the construction of a twelve-story commercial office building ("Sunroad Centrum 12") located at 8620 Spectrum Boulevard near Montgomery Field Airport in the City of San Diego. Specially, we are investigating whether public officials lobbied the Federal Aviation Administration ("FAA") on behalf of Sumoad, a private entity, resulting in the unauthorized expenditure ofpublic monies.

Both the California Constitution and the San Diego City Charter prohibit the gift ofpublic funds for private purposes. We are investigating whether public officials such as Mr. Sexton lobbied the FAA on behalf of Sunroad and not the City.

-21- 13248 FAA in Texas on May 22, 2007. In advance of the meeting, Mayor Sanders wrote to the

FAA. In that letter, Mayor Sanders made it clear that the City would abide by the FAA's

final hazard determination - however that decision came out. The letter is significant in

that it makes clear that the presentation was that of the City, it was only a proposal, and

that it was up to the FAA to make a final determination and the City would abide by

whatever the FAA determined. The letter provides:

Itis apparent that the City failed to stop work on the project and prevent the building from reaching 180 feet after it knew of the FAA's concerns. I take full responsibility for that mistake and want to do everything within my power to correct it. I have initiated a thorough review of how the decisions that led to this situation were made so I can ensure that this will never happen again.

I support your findings that the building must be reduced in size so that it is no longer a hazard to public safety. As Ms. McDonald is aware, my staff has put forward a proposal that will reduce the building height to . 163 feet with the exception of the mechanical equipment enclosure room .I which would remain at 180 feet. All of these changes are designed to de­ conflict aircraft operations and the building.

I would encourage you to consider this proposal, but I also want to make clear that I will support whatever your nltimate judgment is regarding appropriate remedial actions.

I am by this letter taking the following action:

1. I have directed the Development Services Department to infonn Sunroad that the City is reinstating the requirement of strict observance of the Stop Work order of October 27, 2006. That notice was served this moming.

2. I support the City Attorney's civil lawsuit, and will support him in taking any and all necessary steps to fully enforce the civil public nuisance mandate of State and local law on behalf of the City.

3. I have directed the City's Chief Operating Officer, Retired Admiral Ronne Froman, to conduct a thorough investigation into the permitting process for this project, including the City's reaction, or lack thereof, to your concerns regarding the 180 foot height. Yonr cooperation in this inquiry will be critical to our refonn efforts.

. -22- 13248 [See Exhibit 13 ~ttached to this Report.]

The letter makes it clear that this was the City's presentation and proposal and not a presentation made on behalf of Sunroad. Moreover, it was not-as alleged by Mr.

Aguirre - a presentation made by Ted Sexton. Indeed, Ted Sexton was present - at the request of the City - to assist with any technical areas. However, it is clear from Mayor.

Sanders' letter that the proposal was the City's proposal and it was only a "proposal." It was clear to all that the City would abide by the FAA's ultimate determination of the hazard. In fact, as a result of the situation, the City ultimately withdrew its own proposal and demanded that the entire building be reduced to 160 feet. Thus, the City later determined that no compromise was warranted and rejected its own proposal. From that moment on the fate of the building was to bedecided as a result ofthe pending lawsuit and not through any negotiated settlement that perhaps would have been approved by the

FAA.

V. STATUTORY SCHEME ADDRESSING PUBLIC ENTITY'S OBLIGATION TO PROVIDE A DEFENSE

Although we have found no evidence of improper much less criminal conduct by anyone, given Mr. Aguirre's serious allegations, the Airport Authority asked us to a~dress its obligations and ability to provide a defense to its employees should one be necessary. Here is our analysis of the relevant issues.

A. GOV. CODE 995.8 .... CRIMINAL

The Airport Authority may, but is not required to "provide for the defense of a criminal action orproceeding...brought against an employee or former employee." Gov.

-23- 13248 Code § 995.8.5 This pennissive right is triggered if (1) "the criminal action or proceeding is brought on account on an act or omission in the scope of his employment as employee of the Airport Authority"; and (2) the Airport Authority "detennines that such 4efense would be in the best interests of the public entity and that the employee or fonner employee acted, or failed to act, in good faith, without actual malice and in the apparent interests of the Airport Authority." Id.

Accordingly, the Airport Authority may defend an employee in a criminal

"proceeding" so long as the action is brought against the employee for acts or omissions within the scope of his employment, and so long as those acts or omissions were undertaken in good faith, without malice, and in the public interests. Because the Airport

Authority is not obligated to provide a defense, it need not support'its refusal to defend with fonnal findings or explicit reasons for refusal..

Based upon our review of the facts and evidence, we believe the Airport

Alithority can easily conclude that ThelIa Bowens, Alan Bersin, and Ted Sexton were acting within the scope of their employment. Similarly, it can conclude they Were acting in good faith and in the apparent interest of the Airport Authority at all relevant times. In fact, there is nothing in the record that would support a contrary finding.

5 Gov. Code § 995.8 prOVides in full, "A public entity is not reqnired to provide for the defense of a ctintinal action or proceeding...brought against an employee or former employee, but a pUblic entity'may provide for the defense ofa ctintinal action or proceeding...brought against an employee or former employee if: 'I[

-24- 13248 B. CIVIL

The Airport Authority's obligation to provide a defense to employees in civil

proceedings are not permissive. Under Gov. Code § 995, the Airport Authority is

"required to provide for the defense of any civil.action or proceeding" that is brought

against aAirport Authority employee or former employee in his official or individual

. capacity, if the action or proceeding is brought "on account of an act or omission in the

scope ofhis employment as an employee" ofthe Airport Authority.6 The Airport

Authority's obligation to provide a defense is triggered upon the employee's or former

employee's request. Once the employee or former employee requests a defense, the

Airport Authority through its counsel must issue a writing within 20 days to inform the

employee whether the Airport Authority will or will not provide a defense and, if

applicable, the reason for the Airport Authority's refusal to provide a defense. See Gov.

Code § 995.2(b).

Thus, the Airport Authority has an affirmative duty to provi<\e counsel to an

employee or former employee who is named in a civil suit covering that employee's acts

or omissions within the scope of his employment with the Airport Authority. Four

exceptions are carved out of this duty. First, the Airport Authority may refuse to provide

a defense if the act or omission was not within the scope of the employee's employment.

See Gov. Code § 995.2(a)(I). See Henrickson v. City a/Rialto, 20 Cal. App. 4th 1612

(Cal. Ct. App. 1993) (finding that the City of Rialto was not 'obligated to defend an off­

6 Gov. Code § 995 provides in relevant part, "upon request of an employee or former employee, a public entity shall provide for the defense of any civil action or proceeding brought against him, in his official or individual capacity or both, on account of an act or omission in the scope of his employmeut as an employee ofthe public entity." Gov. Code § 811.2 defines "public entity" to include "the State, the Regents ofthe University of California, a county, city, district, public authority, public agency, and any other political subdivision or public corporation in the State,"

-25- 13248 duty police officer who was sued for negligently discharging his weapon). Second, the

Airport Authority may refuse to provide a defense if the employee acted or omitted to act because of fraud, corruption, or malice. See Gov. Code § 995.2(a)(2). Third, the Airport

Authority may refuse to provide a defense if there is an actual and specific conflict of interest between the Airport Authority and the employee or former employee. See Gov.

Code § 995.2(a)(3); Stewart v. City ofPismo Beach, 35 Cal.App.4'h 1600 (Cal. Ct. App.

1995) (public entity retains its obligation to provide a defense where a potential conflict exists, but once the conflict becomes actual, the public entity's obligation is relieved).

Finally, the Airport Authority may refuse to provide a defense when the Airport

Authority"itself brings an action or proceeding to remove, suspend, or otherwise penalize its own employee o~ former employee. See Gov. Code § 995.4.

Based upon our review of the facts and evidence, Thella Bowens, Alan Bersin, and Ted Sexton were at all relevant times acting within their employment with the

Airport Authority. We do not believe any of the four exceptions are applicable, and, accordingly, we believe the Airport Authority is required to provide a defense should any civil action be brought against them.

VI. OPTIONS CONCERNING INTERNAL INVESTIGATION REPORT

As we have previously discussed with the Board, there are three options concerning this written report. It is a privileged communication between the Airport

Authorj.ty's Independent Board members and its attorneys. As such it is confidential and will "remain so unless and until the Board determines to waive the privilege and disclose it to a third party. Thus it can:

1) Remain confidential;

-26- 13248 " 2) Be turned over to the Attorney General's Office, or

3) Be ~ade public generally.

Since the Attorney General's Office is conducting its own investigation and the

Board wishes to cooperate fully with that investigation, it is our recommendation that it be turned over to that office, but only to that office. Thus, the Attorney General's Office will have the benefit of the report and yet it can continue to conduct its own investigation without unnecessary publicity or distraction. A public disclosure of the Report at this time may impact the Attorney General's ability to conduct his investigation quietly and without fanfare as most responsible investigations are conducted. It would be for the

Attorney General to release the Report at a time when he felt it would not impact his investigative efforts. In our view, it is the way most responsible investigators proceed­ to make a public announcementat the conclusion of an investigation.

We are happy to discuss these or any other matter with the Board.

VII. CONCLUSION

Based upon our review of this matter, we saw no evidence of a conspiracy or illegal or improper conduct by anyone at the Airport Authority. In fact, the Airport

Authority and its employees acted consistent with the Airport Authority's mission and enabling legislation and there was a measurable benefit to the Airport Authority and the

City of San Diego as a result of Ted Sexton's assignment.

-27- 13248 EXHIBIT 1 From: Bowens Thella To: Lobner Breton: CC: Subject: RE: Loaned Executive to City Date: Thursday, March 01,20076:59:41 PM Attachments: ----,--,---_._------_._------­

More commonly referred to as a "loaned executive"... an idea we have been pursuing aimed at getting the aviation issues of the city untangled.

THELLA EXHIBIT 2 I

. LA.BELLA&--J MCNAMARA,LLP

SUBJECT: "KEYWORD SEARCHES

Jim Waring

Kristine Michelle, Mayor's Staff

Tait Galloway

Ronne Froman, Mayor's Chief of Staff

Jim Barwik

Mike Tussey, Director of Airports for the City

Alan Bersin

Thelia Bowens

Ted Sexton

Angela Schaeffer-Payne, AA Vice President of Strategic Planning

Linda Johnson, AA Planner

Kei th Willsheets, Director of Airport Planning

401 WEST "A" STREET, SUITE 1150. SAN DIEGO, CA 92101 (619) 696-9200. (619) 696-9269 (FAX)

-I­ /

EXIllBIT 3 Fage 4 ofl5

Page 3

effect of the proposed construction or alteration (iii) 25 to 1 for a horizontal distance of 5,000 on air navigation; feet from the nearest point of the nearest landing and takeoff area of each heliport specified in paragraph (a)(5) of this section. (3) Recommendations for identifying the construction or alteration in accordance with (3) Any highway, railroad, or other traverse the cnrrent Federal Aviation Administration way for mobile objects, of a height which, if Advisory Circular AC 7017460 -1 entitled adjusted upward 17 feet for an Interstate "Obstruction Ma,rking and Lighting," which is Highway that is part of the National System of available without charge from the Department Military and Interstate Highways where ofTransportation, DiStribution Unit, TAD Dvercrossings are designed for a minimum. of 484.3, Washington, DC 20590. 17 feet vertical distance, 15 feet .for any other public roadway, 10 feet or the height of the (4) Determining other appropriate measures to highest mobile object that would normally be applied for continued safety of air traverse the road, whichever is greater, for a navigation; and private road, 23 feet for a railroad, and for a waterway or any other traverse way not (5) Charting and other notification to airmen of previously mentioned, an amount equal to the the construction or alteration. height of the highest mobile object that would normally traverse it, would e)!Cceed a standard of paragraph (a)(l) or (2) of this section. § 77.13 Construction or alteration requiring notice. (4) When requested by the FAA, any construction or alteration that would be in an (a) Except as provided in § 77.15, each sponsor instrument approach area (defmed in the FAA who proposes any of the following constructiou or standards governing instrument approach alteratiou shall notify the Adrrinistrator in the form procedures) and available information indicates and manner prescribed in § 77.17: it might exceed a standard of Subpart C of this part. (l) Any construction or alteration of more than 200 feet in height above the grouod level at its (5) Any construction or alteration on any of the site. following airports (including heliports):

(2) Any construction or alteration ofgreater (i) An airport that is available for public use height than an imaginary surface extending and is listed in the Airport Directory of the outward and upward at one of the following current Ainnan's Information Manual or in slopes: either the Alaska or Pacific Airman's Guide and Chart Supplement. (i) 100 to I for a horizontal distance of20,000 feet from the neal"est point of the nearest (ii) An airport uoder construction, that is the runway of each airport specified in paragraph subject of a uotice or proposal on file with the (a)(5) of this section with at least one ruoway Federal Aviation Administration, and, except more than 3,200 feet in actual length, excluding for military airports, it is clearly indicated that heliports. that airport will be available for public use.

(ii) 50 to 1 for a horizontal distance of 10,000 (iii) An airport that is operated by an armed feet from the nearest point of the nearest force of the United States. runway of each airport specified in paragraph (a)(5) of this section with its longest ruoway no (b) Each sponsor who proposes construction or more than 3,200 feet in actual length, excluding alteration that is the subject of a notice under heliports. paragraph (a) of this section and is advised by an FAA regional office that a supplemental notice is

© 2007 ThomsonlWest. No Claim to Orig. U.S. Gov!. Works.

https://web2.westlaw.comlprint/printstream.aspx?sV=Split&destination=atp&utid=%7b419... 8/3/2007 Page 50£15

Page 4

required shall submit that notice on a prescribed (a) Eachyorson who is required to notify the form to be received by the FAA regional office at Administrator under § 77.13(a) shall send one least 48 hours before the start ofthe construction or executed'form set (four copies) ofFAA Form alteration. 7460-1, Notice ofProposed Construction or Alteration, to the Manager, Air Traffic Division, (c) Each sponsor who undertakes construction or FAA Regional Office having jurisdiction over the alteration that is the subject ofa notice under area withio which the construction or alteration will paragraph (a) ofthis section shall, withio 5 days be located. Copies ofFAA Form 7460-1 maybe after that construction or alteration reaches its obtained from the headquarters ofthe Federal greatest height, submit a supplemental notice on a Aviation Administration and the regional offices. prescribed form to the FAA regional office having jurisdiction over the region involved, if-­ (b) The notice required under § 77, 13(a)(l) through (4) must be subntitted at least 30 dayS before the (I) The construction or alteration is more than earlier ofthe following dates: 200 feet above the surface level of its site; or (I) The date the proposed construction or (2) An FAA regional office advises him that alteration is to begin, submission ofthe form is required. (2) The date an application for a construction permit is to be filed. § 77.15 Construction or alteration not requiring notice. However, a notice relating to proposed construction or alteration that is subject to the licensing No person is required to notify the requirements ofthe Federal Communications Act Administrator for any of the following may be sent to FAA at the sarne time the application construction or alteration: for construction is med with the Federal Communications Commission, or at any time before (a) Any object that would be shielded by existing that fJling. structures of a permanent and substantial character or by natural terrain or topographic features of (c) A proposed structure or an alteration to an equal or greater height, and would be located in the existing structure that exceeds 2,000 feet in height congested area of a city, town, or settlement where above the ground will be presumed to be a hazard to it is evident beyond all reasonable doubt that the air navigation and to result in an inefficient structure so shielded will uot adversely affect safety utilization ofairspace and the applicant has the in ,air navigation. burden of overcoming that presumption. Each notice subntitted under the pertinent provisions of (b) Any antenna structure of 20 feet or less in height this Part 77 proposing a structure in excess of 2,000 except one that would increase the height of another feet above ground, or an alteration that will make an antenna structure. existing structure exceed that height, must contain a detailed showing, directed to meeting this burden, (c) Any air uavigation facility, airport visual Only in exceptional cases, where the FAA approach or landing aid, aircraft arresting device, or concludes that a clear and compelling showing has meteorological device, of a type approved by the been made that it would not result in an inefficient Administrator, or an appropriate military service on utilization ofthe airspace and would not result in a military airports, the location and height ofwhich is hazard to air navigation, will a determination ofno fixed by its functional purpose. hazard be issued,

(d) Any construction or alteration for which notice (d) In the case of an emergency involving essential is required by any other FAA regulation. public services, public health, or public safety that requires immediate construction or alteration, the 30-day requirement in paragraph (b) ofthis section § 77.17 Form and time of notice. does not apply and the notice may be sent by

© 2007 ThomsonlWest. No Claim to Orig. U,S. Govt. Works,

https:llweb2.westlaw.com/printlprintstream.aspx?sv=Split&destination=atp&utid=%7b419... 8/312007 EXlDBIT4 '., ComIiI6nity Planning Areas ano. Airport Influence Areas in the City of San Diego

-

\ ( \ ~" ----I,~fi'" , \'r-----'--J . ..-----~~

1l1E em o••m DIEGO U(;END DAirportlulluo"".An:OlI DCnRUlluui!)-PItulBoWl

Ol.!"M=

M(:.\.NM1"",u, BJookMo""l,ioR.1l1ch C"m

~r""lJom<<:,·F1·l

SonIlitll" "''''''.Il..."IAlrrort B'Ib.,"P..~ C<",,,,t",,y Eo=I~ N

~ I AIRBeRT ;INFLUENCE-AREA ~

",,-.;(ftA' ,. ,J1 A ",

."!'

-----l-<"'=O \ Feet MCAS M1IRAMAR ,AIRPORT IN:FLUEN,CE AREA POWAY

S.D. COUNTY

.. ~.,'

('-.',;,,_';-,U~N"'~;.-'-,"';..

"",,,,=,,,-.'-'~""'"'"'~"

i ;

F.,"-' o '-c.":;;"

SANTEE

<_

{~I ,<' : 0 MCAS MiramarAirport Influence Area .I::J Noise Contours (CNEL)

...>~.,., EXHIBITS "

,

''''"",."li~-'· ."••,_••.,j MONTGOMEItY, FIELD" 'FAA PART, 77

~'iil'<'Ai'vli\R NOnCINGAREA r"!I\RIIJ1; C{il·ti<, ,(,if{ S·i:;.;(\Oi·J ~_ ! ..". ;,. I -~~,..,..,t"" _~~~-~--t:~/:::;'-""'~"'\\*",' - ?(~7~frr~~R~~LJ~ 'd","" /('~'I""''''/)!C'k ./' s" "<. SANTEE ..

Ic:::!] MontgomeryFleld Airport Influence Area 1h:E~;n;iHI Montgomery FIeld

, '1~~:.,jJ:..~:,~' c::::J Other Airfields *20,000 feet "'; ------== ., I . . '~--lMCAS'MIRAMAR ,..,.,-N·,···,_.. "" . jilAIR)STATION "'~ ~ -rf"O "'; ( ~ ~ i hid '-;F*-PART77 ~ "t'~_ .NOIfICING AREA .If /' ,.. ~ f /:I:",J'C" ;," 1 /.• .1 s;;,:.;,oP;;MIii'r,~;M"~':'~;';;;; r,~J

F J~-'J'""-' ~"'f J ·!...1 i{...J •__••1-,

,\1.'•• ,.-:'

~

\ SANlEF:

City of s~~ Diego Legend City Planning & FAA PART 77 NOTICING AREA' Community Investment Department E::!J. MCAS MiramarAlrport Influence Area W:itH:iii.. 1MCAS Miramar c=J otherAirtields "'20,000 feet EXHTBIT6 Page 1 of 1

Ted Sexton - Part 77 notification information

From: Tait Galloway To: Eric Nelson; Ernie Gesell; [email protected]; Juan Lias; [email protected]; Laura Thornton; Linda Johnson; Mike ~ . Tussey; Sandi Sawa; [email protected]; Ted Sexton; Terry Price Date: 7/13/20072:16 PM Subject: Part 77 notification information

The FAA notification requirement information has been posted on the City's Development Services Dept. web page.

Please check it out .at mm:iiwww.sancilego.ggyicieveiopmenrcservlces/

It can be accessed by clicking on the photo of the airplane on the right side.

Once on the page, there is a link to the City's Information Bulletin 520 which address the Part 77 notification requirements.

Tait Galloway, Senior Planner City of San Diego City Planning & Community Investment Department 202 C Street, MS SA, San Diego CA 92101 (619) 533-4550 (619) 236-6478 (fax)

llllWJi\l.sanOleg~

file:l/C:\Documents and Settings\tsexton\Local Settings\Temp\GW}OOOOl.HTM 7/27/2007 FAA Notification Requirements IDevelopmeut Services http://www.sandiego .govldevelopment-services/news/faa.shtml . \

§lj!§h!i');, iil1~~!~et!il!!"~wt'*' .15eCl'.h)

DEVELOPMENT SERVICES I CONSlP.UcnON U>lDUSTII:Y S!Mll BUSfNES:li I HObit [r.:.3t.'.~.,.:~'.}.~.i:.,$J...kt.~·,".. ]~.? CON1ACT HOME PR:OFE:5:SIQNAlS- OWNERS OWNERS ('~BP.:~~~L~j us.

Development Services News & Updat,es

Federal Aviation Administration (FAA) Notification Requirements

Due to Federal Aviation Administration (FAA) regulations, projects that meet the Federal Code ofRegulations, Title 14, Part 77 notification criteria are now required by the City of San Diego to submit a ''Notice of Construction or Alteration" to the FAA prior to obtaining building permits.

Information bulletin 520 provides general information concerning when applicants are required to notifY the FAA oftheir proposed development projects and the process for notifYing the FAA.

Typically, projects that exceed an imaginary 100: I surface within 20,000 feet of a civilian or military airport or have a height exceeding 200 feet above ground level are required to notifY the FAA. Information bulletin 520 specifically lists all the Part 77 notification criteria. The notification requirements are'only applicable to projects performing exterior construction of existing, temporary, or new structures.

The FAA conducts evaluation based on information provided by applicants directly to the FAA. The FAA will provide the applicant the outcome of the evaluation. The FAA notification process may delay approval ofyour project until FAA provides a determination.

For discretionary approvals (projects that are subject to public noticing and public hearings), the City will not recommend approval of a project without a FAA Determination ofNo Hazard to Air Navigation for the project.

For ministerial approvals (projects that are reviewed solely by City staff), the City will not approve a project without a FAA Determination ofNo Hazard to Air Navigation for the project.

Please see Information Bulletin 520, "Federal Aviation Administration Notification and Evaluation Process," (PDF: 128K) for details.

Other Resources

• City Planning & Community Investment Airport Planning Web Page • Federal Aviation Administration Obstruction Evaluation Web Site

I Development Services Home I Construction Industry Professionals I Too of Page I I Small Business Owners I Home Owners I News & Updates I Contact Us I [i$ifEt.l!!il§~¥til!i1!ti¥~i>:~~

10f2 8/3/2007 11 :32 AM FAA N otitication Reqnirements IDevelopment Services http://www.sandiego.gov/development-services/news/faa.shtml

I Home I Business ICity Hall I Community I Departments j Information I Leisure IServices A~Z I Visiting I I Search 1Site Map I Contact the City I Privacy Notice I Disclaimers I

\

20f2 8/3/2007 11:32 AM INFORMATION Federal Aviation Administration Notification BULLETIN and Evaluation Process CITY OF SAN DIEGO DEVELOPMENT SERVICES THE: CITY OF SAN DIEGO 1222 FIRST AVENUE, MS 302 8AN DIEGO, CA 92101-4101 520 CALL (619) 446-5300 FOR APPOINTMENTS AND (619) 446-5000 FOR INFORMATION JULY 2007

This information bulletin provides general informa­ tion concerning when applicants are required to no­ tifY the FederalAviation Administration (FAA) oftheir proposed development projects, so that the FAA can conduct an Obstruction Evaluation I Airport Airspace Analysis (OE/AAA). Title 14 Code of Federal Regula­ ~ions, Part 77, Objects Affecting Navigable Airspace, IS the federal regulation governing the obstruction evaluation process. In administering Part 77, the FAA conducts aeronautical studies based on information provided by applicants on an FAA Form 7460-1 Notice

ofProposed Construction or Alteration. 1

I. FAA NOTIFICATION PROCESS All applicants proposing any construction or on the runway to each airport with at alterations that may affect navigable airspace least one runway no more- than 3,200 must file a Notice of Proposed Construction or feet. Alteration (Form 746Q:1) with the FAA. Filing C) Are within a horizontal distance of 5,000 this infonnation with the FAA does not relieve feet of a pnblic use heliport and exceed a an applicant from complying with any other 25:1 surface. 3. Any highway, railroad or other traverse way federal l state, Airport· Land Use Commission, or City of San Diego policies, criteria, rules, or where the prescribed adjusted height would regulations including, but not limited, to the Air­ exceed that above noted criteria. port Approach Overlay .Zone, Airport Environs 4. When requested by the FAA. Overlay Zone, Airport Land Use Compatibility 5. Any construction or alteration located on a Plans, and State Aeronautics Act. public use airport or heliport regardless of height or location. ' II. WHO NEEDS TO NOTIFY THE FAA? Part 77 requires that any applicant who intends ill. CONSTRUCTION OR ALTERATION NOT to perform any of the following construction or REQUIRING NOTICE alterations must notifY the FAA: Per Section 77.15 of Title 14 of the Code of 1. Aoy construction or alteration exceeding 200 Federal Regulations (CFR) Part 77, no person feet in height above ground level. is reqnired to notifY the Administrator for any object that would be shielded by existing struc­ 2. Any constru~tion or alteration of structures, antennas, trees, mobile objects, and tempo­ tures of a permanent and substantial character rary objects such as construction cranes that: or by natural terrain or topographic features of A) Are within a horizontal distance of equal or greater height, and would be located in 20,000 feet from a public use or military the congested area of a city, town, or settlelnent airport and exceed a 100:1 surface from where it is evident beyond all reasonable doubt any point on the runway to each airport that the structure so shielded will not adversely_ v;ritb at least one runway more than 3,200 affect safety in air navigation. feet. Within the City of San Diego, this includes the following airports: .Ban Di­ The City will not require notification to the FAA ego International Airport, Montgomery if a professional, licensed by the state of Califor­ Field, Brown Field, Gillespie Field, Ma­ nia to prepare construction documents, provides rine Corps Air Station Miramar, Naval the following certification. on their plans along Air Station North Island, and Naval Out with their signature and registration stamp. Lying Field Imperial Beach. B) Are within a horizontal distance oflO,OOO "I do hereby feet from a public use or military airport certifY that the structure(sJ or modification to and exceed a 50:1 surface from any point existing structure(s) shown on these plans do not

Printed on recycled paper. Visit our web site at www.sandiego.gov/development-services. Upon request, this information is available in alternative formats for persons with disabilities.

D8-5520(07-07) Page 2 of 3 City of San Diego • Information Bulletin 520 July 2007

require Federal Aviation Administration notifi­ On the web page, forms and determination infor­ cation because per Section 77.15 Ca) of Title 14 mation are located on the left side ofthe screen. ofthe Code ofFederal Regulations CFR Part 77, notification is not required." VI. WHAT HAPPENS WHEN THE FAA IS NOTIFIED? The applicant will be required to sigu a No FAA The FAA will acknowledge receipt of the notice Notification Self Certification Agreement prior filed by th.e applicant. The FAA will then send to permit issuance. Should it be subsequently the applicant the outcome ofthe initial screening determined by the City, Airport Land Use Com­ and may state one ofthe following: mission, state, or the Federal Aviation Adminis­ tration, or any other government agency that the 1. The proposed development project is not iden­ proposed project is required to notify the Federal tified as an obstruction and would not be a Aviation Administration under CFR Part 77, the hazard to air navigation; or City assumes no responsibility or liability for any 2. The proposed development project would be changes required. to the submitted construction an obstruction unless reduced to a specified drawings and documents and to the structures height and is presumed to be a hazard to air installed on the project site as a result of and to navigation pending further study. achieve consistency with the FAA's determina­ tion of No Hazard to Air Navigation. When the FAA notifies the applicant that a pro­ posed development is identified as a presumed IV. WHAT IS THE FAA 100:1 NOTIFICATION hazard, the notice will either specifY that the SURFACE? FAA has initiated further study, or the applicant The FAA uses the 100:1 notification surface to may elect to reduce the height or request further help identifY projects that may interfere with study within 30 days, in which event the FAA airport operations. A project exceeding the 100:1 will begin the study when the applicant so ad­ notification surface is not necessarily incompat­ vises. Ifthe FAA conducts a further aeronautical ible, but rather requires thatthe FAAbe notified, study, the FAA will seek input from the public, so they can conduct an aeronautical study. Based affected agencies, and the applicant to gather upon the information provided by the applicant additional facts or information relevant to the to the FAA, the FAA will determine ifthe project study. After the FAA completes the aeronautical would be an airspace obstruction or hazard. The study, it will normally issue a: City does not determine if a project would be an airspace obstruction or hazard. 1. Determination of Hazard to Air Navigation; or v. HOW IS THE FAA NOTIFIED? 2. Determination of No Hazard to Air Naviga­ Ifthe proposed construction or alteration IS NOT tion. LOCATED on an airport, the applicant can no­ tifYthe FAA by filing FAA form 7460-1 electroni­ VII. PROJECT DECISION cally with the FAA via 'the Obstruction Evalua­ The applicant is responsible for submitting any tion website: www.oeaaa faa gov or file FAA form ' proposed development project that meets the 7460-1 via US Postal Mail to: stated Part 77 notification criteria to the FAA. Upon submittal of a development project to the Express Processing Center City, the City will identifY if the project meets Federal Aviation Administration the stated Part 77 notification criteria to the Southwest Regional Office FAA. 'While not required by Part 77 to inform an Obstruction Evaluation Service, AJR-32 applicant ofthe need to notify the FAA, the City 2601Meacham Boulevard doesthis as a public service. This does not limit Fort Worth, TX 76137-0520 the applicant from notif'ying the FAA prior to the City informing the applicant ofthe need to do so. Ifthe proposed construction or alteration IS Nor does it relieve the applicant from the Part 77 LOCATED on an airport, the applicant must requirements to notifY the FAA if the City does notifY the FAA by filing FAA form 7460-1 with not inform the applicant ofthe need to do so. The the FAA via US Postal Mail to: applicant can determine if FAA notmcation is required prior to submitting a proposed develop~ Federal Aviation Administration roent project to the City by using the notification Western-Pacific Region tool on their Obstruction Evaluation website P.O. Box 92007 www.oeaaa fa a goy. Los Angeles, CA 90009 July 2007 Cily of San Diego· Information Bullelin 520 Page 3 013

If a project meets the PaIt 77 notification crite­ consistent, the state dictates that any project ria, the City will request that the applicant: applicant that still elects to proceed with the approval process will require (Public Utilities 1. Provide the City with a copy of the notifica­ Code Section 21675.1. (d)) that the City Coun­ tion to the FAA; and cil overrules the ALUC determination by a 2. Provide the official FAA determination for the two-thirds vote if it makes specific findings. project to the City prior to scheduling a public Regardless, if the City Council overrules the hearing, or issuing any permits requested by ALUC determinatiou, the project is still sub­ the applicaut. ject to obtaining a permit from the California Department ofTransportation. If the applicant fails to provide the requested documeutation, the City will not proceed in the IX. AIRPORT LAND USE COMMISSION development review process until the applicant DETERMINATION AND AIRPORT provides such documentation. Important points OPERATOR COMMENTS that the applicant should note are that: A consistency determination made by the ALUC or comments provided by an airport operator DO 1. It is the responsibility of the applicant to no­ NOT substitute for notifying the FAA under any tifY the FAA as required by Part 77; circumstances. Mille it is important to seek com­ 2. For discretionary approvals (projects that are ments from the airport operator and submit proj­ subject to public noticing), the City will not ects to the ALUC for consistency determinations recommend approval of a project without a when required as part of the review process, it FAA Determination of No Hazard to Air Navi­ does not meet the Part 77 requirement for notifjr­ gation for the project until the requirements ingthe FAA. in Section VII can be fulflled. 3. For ministerial approvals (projects that are X. ADDITIONAL INFORMATION reviewed solely by City staff), the Citywill not The following FAA docunlents provide addition­ approve a project without a FAA Determina­ al information addressing the notification and tion of No H'\zard to Air Navigation for the evaluation process: project. 4. Regardless, if the FAA makes a Determina­ 1. Advisory Circular 70/7460-2K - Proposed tion ofNo Hazard to Air Navigation, the proj­ Construction or Alteration of Objects That ect is still subject to all federal, state and City May Affect the Navigable Airspace, provides

of San Diego rules or regulations. I information to persons proposing to erect or alter an object that may affect the navigable VTIl. DETERMINATION OF HAZARD TO AIR airspace. NAVIGATION 2. Advisory Circular 70/7460-1K - Obstruction If the FAA makes a Determination of Hazard to Marking and Lighting, describes the stan­ Air Navigation for a project that requires dis­ dards for marking and lighting structures cretionary approvals and the applicant elects to such as buildings, chimneys, antenna tow­ continue the approval process without altering ers, cooling towers, storage tanks, supporting the project in a manner that would allow the structures of overhead wires, etc. FAA to make a Determination of No Hazard to Air Navigation for the project, then the applicant Also, FAA applications require latitude and lon­ must obtain the following: gitude information. Internet search engines can provide links to websites that can determine the 1. A permit from the California Department of latitude and longitude in degrees, minutes and Transportation prior to the construction or seconds from a property street address. alteration of the structure (Public Utilities Code Section 21659). XI. QUESTIONS 2. A consistency determination from'the Airport If you have any questions regarding the comple­ Land Use Commission (ALUC) for Sall Diego tion of the FAA form 7460-1 or the obstruction County. TheALUC requires that the City sub­ evaluation process, please contact the FAA West­ mit any project that the FAA made a Deter­ ern-Pacific Region office at (310)-725-6557 orvis­ mination of Hazard to Air Navigation to the it the FAA Obstruction Evaluation website: ALUa for a consistency determination with ·www.oeaaa.faa.gov. the applicable Airport Land Use Compatibil­ itv Plan prior to final approval for the project. Ifthe ALUC determines that the project is in­ Federal Aviation Administration Notification INFORMATION aUJ-!..ETIN and Evaluation Process CITY OF SAN DIEGO DEvElOpmENT SErvICES 1222 FIrST AvENUE: rnS 302 SAN DIEGO, CA 921D1-41D1 520 CAl ) (619) 445-5:.;00 FOr AppOINTmENTS AND (619) 446-5000 FOr INFOrmATION J~ne 2007

This infcrmatlcn bulletin prOlr'ldes general jnfO"ma~ bOClliii~ '~ferenc~d tico cmca-ning whS'tl j;lpp1i~nt~ ;;trai'eql.liroo tonl:my lit. in this the Fedefl:ll Aviatien Administratlcn (FAA) d their .IntQFmation Bulletin prcpc:ea:l dwe!cpm61t pr~fcts, so that the FAA can D -r1tl,e'14'Cope"ofFed~ral' Regulations, Part 77, ccriduct anObstructlcn EvaluatJcn IAJrpcrt Airspace .D6f~~fS-Affectlng~NavIgl;ible-·Arrspace-~---' Analysis (DE/AM). Title 14 Cede of Federal Regula~ o 'FAA-~l;IVis-oi;r iJin::uiar"'7017 4S0~'i'l'\' tl ens, Part 77, Obje::ts Affootl ng NavlQabl e Ai rspace, Is D F¥,~riQ;"'Gir~~i§~7ift45O:V~ the fejeral r.e;JuJatloo g:Nernlng the .cbstructioo e,alu~ ·EM:'N..ttt!er:_df~[i1~~~· 'Cori§!!:UJ?!!Q!1 2r ~I ~ etlen precess. In administering Part 77, the FAA ccn~ q te~ti.pn:.(Eonn,:'t460=j) _ dUt;:!lil aerql!:lutl~) stydies p~_~ on 1nfcrmCjti01 pro-­ Ad

Any ccnstructiCfl or alleratloo J crate::! bn /.0 Faa(NotIFlcatloNc;JProcea:,3 7. a public uSe a'irpcrt cr helipat regardless d All applicants prcp~lng ~ny CQ1structiq] er height cr Iccatlen. elte-aliens that may affect navigable airspace must fIle a Netiee c:i Prcposa:l Calstructlcn cr 111.0 Wh a tOls eth e !Ira a C100:1CNotl FI ca tl oNO ~I~~~~len (.Fa-m 71~0·1) with the FAA. FIII'19 this Infamatlcn with the FAA doss nct rellwe surFace? . an applicant fran canplylng with any ether The EM useS the 100:1 netificatlq] surface td f~~~I, ~;:tt~, Alrp~t L~nd ~~ GIDIrT'!Jl??-i,ql, help Identify prqects that may interfere with Cf City d San DIl;l'Jo pflicies, criteri.a, rules, ex !3irp~t cp~?tlc:'1~.Aprcj~ E!(9!*dir'!9 the 1qP:1 incanpati~ regulatiCfls Including, 'put nct limited tothe Ai r~ nctlficatioo surfaceisnct necessarily pg-t ApPfqlg, PY~·!EY ~e. Alrpl=ff I=nvirc:n§ ble. but rathe- re.quires thai the FAA benctifle::l, Overlay Ztna, Airpa-t Land Use CcmpatlblJlty f&1h§Y @.D W1c!\.lcl i:!!I'I ~~~\J~iq;jl iituqy. ~~ Plan~, and BtateAerCflautlcs Act. cnthe Infa-malien prcwlded bytheapplic:ant to the FAA, the FAA will determine 'if the pr~e::t 11.0 WhorNeeds[t.ol1llotIFyOthelE'aa? Wl;JJ!d be?!n iillr~pa!=S ¢struc::!:is:n 'q- h~cjrg. Th§! P~rt 77 r~Jlllr!fS ~h;:jt arw §lPpflq3r)t Who i!1t~9? City dces nct dete-mine if a prqe::t woold bean alr~pa~cb~ru~la1 to perfam any d thli3 fdlONlr19 CQlstruetlro Cf O'·hallard. alteraticns must nctlfy the FAA: Iv.o hoWCIlsll:hell7aa[NotlFled? 1. Any CQ1mru(:;l:!q] q alleratien ~~Ing l,f t!!!'3 jJrq.>~ p:n~ructi!=fl .cr f!lt~?l~lcn 1$ 200 feet In he ght abOle grumd level. NOT LOCATED 00 an airpcrt, the applicant 2. Any CQlstructloo cr alteratlcn cfstructures, can naify the FAA by fIling FAA ferm 7460-1 antEflnas, trees, moolls cbjecl:s, and tem­ t;I~rq1Iq;l!ly wHh t hI': FAA y i~fthe Obstr~e;tiQl1 pcrary cbJects such as CQlstructicn cranes Evaluatico website: "'WIM £E'Aaa faa gnll cr file that: FAA ferm 746o~1 via USPcsta!-Mail-to;' 3. Are within a halDcntal distance d 20,000 feet fran a publicusea military airpcrt and Express Processing Genter e:~ a 10P;1 sL!rf~l;'.'l !rq]l any pdflt gl t~e Fe:le-al Aviatioo Adminlstraticn runway to eqch airpcrt with at least ene Sa.ithwest Regimal Office runway mO's than B,200 feet Within the Obstructien Evalualioo Se-vice, AJR~32 GI~y-gE!§n-p'i§'99, tills in9ug~ 1118 fqlq.ving 2601 Meacham Boole,tard alrpcrts: San Di~o I nte-natlCflal Alrpat, F:crt Werth, TX 76137"0520 MCfltgcmery Fletd, BrONn Field, Gillespie Fi¢.ltl, M;;irln~ Ccrp~ Air St!'ltig} Mlr~mj;lr. If'tne prcpCS€d ccnstructien cr alteratia) IS Naval Air Statlcn Ncrth I slanc:/, and Naval LOCATED man alrpa-t, the applicant'musl Out Lying Field I mperlal Beach. nctify the FAA by filing-FAA fam 746o~1 with 4. Are Within a ncrlDaital distance d 5,000 the FAA via us P<:;¢

primedon rec cl ElPs.per.vlsll ourweb slle atl·L"'.':"i~~.li;~.P.Q>'.lOi."'i..!'.il.'!f.lmsnt-;;."r:!i_If.;G. Upon rf>qlJe~I, _this Jnform~tlon!~ FlY ail 001 an ~l \arnativ ~ormals!orpers~~w!lhdisablJ ilies.

OS-S20(05-07) I Ted Sexton - Ib520_1.pdf t-'age ;<:i

PitY pf 5an piego 0lnfQrJ!IlItion BUI~t.in· p~f.I: June ~907

On the web page, ferms and cletermlnatjq] Infer­ prejed tothe City pricr toschajuJing a public maticn islo:ated O1the lEtt sidedthe SCl"EI6f1. hearing, er issuing any permits re:juested by the applicant. V.D, WhatllJaPPeNstWheNltheLFaaDJsD , NotiFied? If the applicant fails to prO/ide the re:juested The FAA will acknONledge receipt of the ndice dccum61tatim, the City will net prro:e::l i nthe develcpment re.tiew precess until the applicant 11 I<:'d ,by ~he appll cant. The FAA wJ II then .~d do:::umen~a~ico. the applicant the a.Jtccme ctthe inItial screening prOliqes sudl lmpcrtant pants appll~nt and may state Ole cfthe fdlONlng: thai the shOJld nete are that

[~t.h~ tqno~ 1. The prq:Jose:l devaq:Jm61t -pr~ect Isnd lden~ 1. It rewOl;>ipillty d'the applicant tifled as an cPstructlc:n and wculd ndbe a tify the FAAasrequire:l by Part 77; 2. Fa dJscretiCflary apprOv'als (prc:jects that are h~l'lrd. tpair n~lYiQi3tjc:o; cr n~igllg Rubli~ 2. The prl:Posed cleve! cpment prqed weuld be 1>L!bjg:f: to p,L!P!ic ,ncr 'hE:!Elr­ ~n cbstruc:tlc:n unless re::luce::l to a specified Ings), the City wil! nct reccmmend apprC10lal height andlspresliriledl6!:ie a haDard"toalr da prqect withoot a FAA Determinaticn 'of navigatlO1 pending further study. No" HOOard to Air Navigatioo fa the prc:jec;t untl! the r equiranents in Se::t:ioo VI 1can be WhSl the FAA ndlfles the appllCEl.nt thet a pro­ fulfilled. posed delecpment Is Identified ,as a presumed 3. Fer ministerial apprOv'als (prqects that are ratleNe::! sdely by City staff), the City will h§loElrq. the 'n~Jqe will !=It!1e:r sp~ry that th~ FAA h<'islnitlate::l further study, a-the applicant ru"i ap'prOJe a prg~ wit"~t a FAA Deter ~ may ~ect toreduce the height cr requem 'further minaticn of No Henard toAir Navigaticn fer theprqect, ?tl.!!=!Y wltH!n (§i~tY) 60 q!,!y~, In »,D!c:i1 §Vglt,tt/e FAA will begl n the study when thi;! appJ Icant $0 4, Regardles,s,if the FAA rTlakes a Del:ermlna­ tim ci No Henard toAir Navigatioo~ the prc:j~ :r=y~ ft~~e:~wf~=Sj~~~~ht:"~~~~~~: e:::t isstll1 subject. toaH fe:leral, state and City ~al1 r~uJ§ltlq1~. lie, affe:cted agencies, i:lnd th~ applicant tOllathe­ q Pij:!Qo rll!f;S go addltiooal facts a 'infcrmaticn reil'Nant 'to the study, 'After the FAA !=ciTiplaes the aefcnauti~l v I [.D!i~!:§! rm! N~tl oNCpFEt! ~~~ rQotQ~ I rD !:>tudy, itwlll nCfmally Issue a; NavigatioN If the FAA 'makes a Determinatioo d'Henard to 1. Deta-minatloo ct Hallard to Air NavigatlO1; Air' Navigatien fer' a "pic:Ject that requfres "diS­ crEticnary apprO/als and the applicant ,elects to 2, "DEterminatioo ~ N9 Hf'lO~rd to ~ir N51viga­ ~tin~!,! ~he ~P.Pr.O/§lJ pr~ wlth9Jt altE:fing , tico: ' ,,- , the prqe::t In a manner that wwld allON the FAA tomakea Determinatioo of No Hauard to vJ.O Pro] E!,ct~e~'!'>l.oN Air N~vlg§tlq1 fer theprg~, then t,h.~!3Ppll~nt The applicant,j s r espcnslble fer submitting any must rotain the fdlONlng: prCfloaed de.rli'iqJm!=flt prgect that meas 'the stated 'Part 77 netificatloo ertterla to tlia FAA. 1. f'J pl;fmiUrg'f) ~h§ Callfania DEpartment d Upcn submittal of a develqJment prqEct tothe Transpcrtatio n prJerto the ,ccnstructioo ·cr C!W, t~e City will ldf!l!ity if the prq~ mats alternatioo·'d'-the structure (PUblic Utilities the state::! Part 77 nctlflcatiCfl criteria to the .cede SEctiQl 2165~). FAA. While not required by Part 77 to infcrm an 2. A cmsistency determinatiOl frcm the Airpcrt app!!9?l1']t ~me n~ t!=lllqify ~~~ FM, ~heq!ty Lana Use Canmlssioo (ALUC) fer San Die;;jo dCES this as a public service. This dces nct limit Ccunty: The ALUC requl"i'eS"ttiat the aty'siJb~ the applicElnl frem nctifying the FAA prier tothe mit any prc:ject that the FAA madea Data-­ Plty·irifcrming th,e ~p'plil::ant l;ltM n~ ~9t;1o $0. mlnaticn of'Hanard toAir Navigatic:o tothe Ncr does It relJeve the applicant frem the P..;lrt77 ALUC fa a cmsistency determinatla1 with requirements tonc:tlfy the FAAHtheClty does the appJicableAirport Land Use ConRati bil­ nc::( Infgm th~ .appllc.<.lnl·qlh~ n~ toqp &0, The ity Plcn priertofini:lI'-!3rJpro..i~l"fg-·th-e prgett:: applicant can determine if FAA nctificaticn is If the ALUC determines thai the prqect lsin­ require:! prIer tosubmlttln;;r a pr~ooe:l d€1>leqJ~ ccnsi stent ,the state di dates that any prcj ect ment prc:je::t tothe City by usi ng 'the nctfffcatJ01 ?lPpliCElrit that 51)11 elec:ts topro::;eg! witb 1h!'! ted CX1 their Obstr\.lctlco Evaluaticn wePslte apprC10lal process will re:rulre (Public Utllities WWW.0B3aaJaa.QOv. Cede Sectioo 21675,1. (d) that the City Coon­ c:jl Wf;:f'rul!$ the ALLI.c" d!3tf;:f'minaticn by R If a prqed meas thePart77nctiflcatloo crlt&­ two-thirds vde if it makes specific findings. ria, the City will r~uest that the applicant: Regardless, if the City Camd I overrules the AlUC delerminaticn,' theprqe:::l: I s"still sub­ 1. Prcwlde the City with a ccpy ri the nctifica­ ject tocbtainlng a permit fran the Califa-nia tiqJ tothe FAA; and D~artmEflt d Transpcrtatlo n. 2. Prcwide the rifldal FAA dete-minatioo fer the I Ted Sexton - ib520 1,pdf I"age j}!

June 2007 Pilge ~ of;3

vlll.l:al rPortO aNdQJae[Commlsl;;loNO dete rmJ Na tl pND;! Nd IJlI rPorto oPe ratorccom-me"Nts . A CCflslstency determlnatlcn made by the Al.UC tf Clinmenfsprovlded "by an iillrpcrJ cper~tq'" DO NOT aub5tltute fa- netltYlng the FAA under any circumstances. While It Is' Impatan! 10seeK canments fran arpcrt cperata­ and wbmlt p'q~ roe to.the ALUC fer ccnsistency determinatlm6 when requif~ !'Is part d the fetlaN pr~, It does net meet the Part 77 requirement fer nctify~ log the FAA.

Ix.D addl.tloNal,CINrormatloN The'fdIONln~ FAA dr;x:umfflts pro.'ide additioo· al infcimatlm adJ:fl:iSslng the ndlficatioo and e.'al watl en process:

1. Advlsery Circular 70174BD.2K • Prq:lCGed Ccn5tructlco cr Alteraticn ct Obja:ts That May Affect the N avjgaRJ!3 AjrsPEJC':E; -pr~ld~ 1nfamatl CJl to pa-SQ1s. prcpcel ng to a-e::t cr alta- an object that may affe;::l: the navigable ?llr§p§~ . 2. AdviS£:fy Circular 70f746o..1K ~ Obsl:ructloo M<:1rklng and Lighting, describes the stan~ darC!9 fgo miiilrkHlganq -lighjinfi §tn.lpj:\.lr~ such as buildings, chimnl¥s, antenna tON­ ers, o;:dlng tcmerlS, sta-age·tanks, suppa-tlng lltru!:turea ct' Qlerhead Wires, ~c. . . .

)5.0 QuestioNs iTYoo· havtiany questicns regElrdlng the ccmple­ tioo ct the FAA ferm 7460-1 a the cbstrudloo ~<:!I!-I~tjCXJ gQ:§.s. ~~l!e p;flt~r,:t lb.e FAA ~­ ern~Pacific.Reglcn cfflce at 31 O~725~3600 a visit the FAA Obsl:ructil:::n SVClluatiOl wllbsite: www.ceaa aJaa.gov. EXHIBIT 7 lJo~:' 19/2006 15: II FAX 6196319727 MCS/DRA 14I00J ':'1RI~RGEMEl--lT ~ 05/19/2005 14:26 FINRNCl! 96315797 NO. 284 Gl02•

. JERRY SANDERS MAYOA

June 7, 2006

Ms. Thella L. Bowen President and CEO San Diego County Regional Airport Authority P.o. Box 82776 San Diego, CA92138-2776

Dear Ms. Bowen,

TIlls letter con:fi=s the City ofSan Diego's interest in exploring the possibility ofan agreement with the San Diego County Regional Airport Authority (SDCRAA) to assume the control of Brown and Montgomery Field Airports.

Such an agreement raises several issues, some have been infonnally discussed by our respecti ye staffs, although many remain unresolved. These include, but may not be limited to:

• The general financial arrangements such as: lease t=s, duration, property and facilities provisions, improvements and how they will be reviewed and approved, ownership ofthe improvements and reversion ifthe Authority vacates, and loase reviews and adjustments.

• Ownership issues for both the property and facilities (aviation and non-aviation).

• Any provision requiring a percentage ofrevenues or any revenuc sharing cont=plated.

• The role and authoriry of the City Council in management overview and decision making.

• The Airport Capital Improvement Program (ACIP), and which agenoy is responsible for managing the ACIP with the FAA.

• Grant related issues such as: FAA Grant Assurances, grant sponsor, and who will be responsible for existing/futUre grant obligations. . - The FAA's position vis-it-vis:the transfe;r of control/ownership ofboIh airports.

• The environmental cleanup reguirements both on existing sites and proposed improvements. (l{j/19/200G 15:11 FAX 619631.9727 !tiCS/DR.;;' @J 004 0Sd3/2006 14 , 26 F JNRNC 1·' \f'1FlHA~EMENT -'t 96316797 NO.2B4 ,Q03

Page2 Ms. Thella L. Bowen June 7, 2006

• Designation of the authority to make day-to-day management decisions and real estate offerings.

• Disposition of City employee status and continuation ofbenefits .and employment status.

~ j • A description ofthe plans to enable Montgomery Field to operate large General Aviation aircraft such as the Gulfstrewn-4 and Gulfstream 5 and a description of any runway extension plans.

• The creation ora study process and public input into the proposal.

I ll1TI looking forward ro the SDRAA's proposal and a mutually beneficial resolution oflliese iSSllE:S. Apartnership between the AiIport Authority and the City in this matter holds great promise for the region. Any questions, please feel free to cal! Mr. Rick Reynolds at (619) 236-5953. . .

Sincerely, EXHIBIT 8 From: Bowens Thella To: JWaringlaisandiego. gOY: CC: Subject: Meeting Date: Wednesday, February 07, 2007 3:07:19 PM Attachments:

Jim,

Alan asked me to coordinate a meeting with you, your staff, Authority staff and a couple of our Board members (Alan and Watkins) on Monday, Feb 12, if possible. He suggested that we could host a lunch here if that works for you. Purpose of the gathering is to identify ways we can work together in a way that both our agencies can come out on top. I know this is short notice but let me know if Monday doesn't work, what does. Alan is out on the 14th & 15th and I am away on the 14th and the 16th thru the 23rd . We are anxious to move forward and expectantly await your reply.

P.S. Left you this same message on voicemail so you can disregard.

THELLA EXHIBIT 9 7(d' 3 ..

'1"" :-~. -; . ~ , r·_." __ ...... ;u _ JERRY SANDERS MAYOR MAR U8 2007

" '·eo.~ March 2, 2007 . I

Alan D. Bersin, Board Chairman San Diego County Regional Airport Authority P.O. Box 82776 San Diego, CA 92138

Re: Montgomery Field - Sunroad Litigation

Dear Alan:

The City ofSan Diego is involved in litigation regarding a building constructed by Sunroad Enterprises near Montgomery Field. The building is already constructed to its maximum height, although interior improvements are not complete.

As Mayor, my primary concern is with the safe operation of all city facilities, including our airports. For a number of reasons, my office has unfortunately been unable to get a clear analysis ofwhether or not the building is a safety risk to aviation, and, if so, whether there may be changes to operations or notices that would eliminate that risk. While the lawyers say the lawsuit . will result in the building being lowered, the outcome of any lawsuit is never certain, and will take many months to determine. Furthermore, the taxpayers of San Diego face an unknown level of potential liability if the building owner is required to lower the structure.

] would appreciate and am requesting that the Airport Authority assist us in analyzing the situation and in working with the FAA and other interested stakeholders in an attempt to resolve this issue. Given the Authority's staff experience in aviation and FAA inatters, your help would be invaluable in providing my office with clear and dispassionate guidance and advice.

Please let me know if the Authority will help with this important effort.

Sincerely, J~~ Mayor

cc: Thella F. Bowens, President/CEO .. San Diego County Regional Airport Authority )

CJTY ADMINIS.TRATION Ell..'II.OING. 2.02.C STREE'. SAN DIEGO. CA\..IFOANIA 92101 (619) 236-6330

\ EXHffiITIO /~ SAN DIEGO COUNTY ) REGIONAL AIRPORT AUTHORITY

P.O. BOX 8277 6, SAN DIEGO', CA 9'213.8-2776 " 3225 NORTH HARBOR DRIVE. THIRD COMMUTER TERMINAL. SAN DIEGO 9·2101 619.400.2405 619.400,2·406 FAX 'vI'w''w'.SAN.ORG

March 12, 2007

The Honorable Jerry Sanders . . ' Mayor, City of San Diego ...... 202 C Street . San Diego, CA 92101 Q)'. .

Dear Mayor Sanders: BOARD MEMBERS

Thank you foryour letter dated March 2,20(17 in which you request ALAN D. BERSIW assistance from the San Diego County Regional Airport Authority to help BRUCE R. BOLAND resolve issues surrounding the Sunroad Enterprises building near JIM.DESMOND Montgomery Field. RAMONA FINNILA

PAUL G. NIETO

In our role of addressing the long-term air transportation needs of the JIM PANKNIN

region, Airport Authority staff is already working with City of San Diego ROBERT J. 'w'ATKINS·

staff to identify the best approaches for achieving the highest use.of air ANTHONY K. YOUNG transportation infrastructure in the region. We believe it is in everyone's CHARLENE ZETTEL· best interest to understand how other airports might play into meeting the 'EXECUTIVE COMMITTEE future needs of the traveling public. At the same time, we are fully cognizant of the importance of protecting both public health and safety near all of the county's airports as well as airpcirt operations. PRESIDENT /CEO THELLA F.. BO'w'ENS With that in mind, we are more than glad to provide the assistance you requested. The President/CEO of the Airp.ort Authority, Thelia Bowens, will assign our highest level executive with the necessary expertise on these issues to work with the City. She will also identify with City staff a scope of work and appropriatEi procedural issues. Ms. Bowens can be contacted at 619-400-2444.

Sincerely,

Alan D, Bersin Chairman San Diego County Regional Airport Authority Board

/ ADB/dl

cc: SDCRAA Board Members· EXHIBIT 11 AGREEMENT BETWEEN THE SAN DIEGO COUNTY REGIONAL AIRPORT-AUTHORITY . AND THE CITY OF SAN DIEGO FOR EXECUTIVE LOAN OF SERVICES OF AIRPORT AUTHORITY EMPLOYEE THEODORE ("TED") C. SEXTON

AGREEMENT NO. _

THIS AGREEMENT,made and entered into this ,/'.fday of f'vIarch, 2007, by and between the SAN DIEGO COUNTY REGIONAL AIRPORT AUTHORITY, a local governmental entity of regional government (hereinafter "Authority") and the CITY OF SAN DIEGO, a municipal corporation (hereinafter "City"); and

RECITALS

WHEREAS, the City is conducting a special project to review the management and facility development options of its City-owned airports; and

WHEREAS, the City is preparing modifications to its General Plan that address land use compatibility policies that directly impact the delivery of aviation services to the region; and

WHEREAS, the Authority, is charged by its enabling legislation to plan for facility development and siting opportunities available in the region to support long term aviation demand; and

WHEREAS, the Authority is preparing a comprehensive airport land use plan for the region and developing standards and guidelines for use in adopting an airport land use compatibility plan for airports in the region, including San Diego Intemational Airport and Brown and Montgomery Field ,ll,.irports, as required by state law; and

WHEREAS, Authority employee Ted Sexton (hereinafter "Employee") has expertise in the area of airport management and development, federal and state regulatory controls, and land use compatibility planning; and \ .

WHEREAS, the Authority has agreed to loan Employee to the City to participate in the City's deliberations on aviation matters, strategy formulation, and regulatory interlace to thereby assist the City and the Authority 10 evaluate Iheir P-QJentlaLopJiO[lJl in light of the City's project; ~

NOW, THEREFORE, in consideration of the recitals, terms, and conditions stated herein, IT IS MUTALLY AGREED AS FOLLOWS: .

Sec. 1. Scope of Services. Authority agrees to provide City with the executive loan of the services of Employee, in accordance with "Attachment A, Scope of Services", a copy of whic;h is attached hereto and incorporated herein by this reference.

Sec. 2. Term. This Agreement shall commence on APt.-IL- , 2007, and shall \terminate on ~ ;0 ,2007, subject to earlier termination as provided herein. Sec. 3. Compensation. .b' '':Jority shall continue to pay Employ ,S salary and benefits during thE: term of this Agreement. Ciljshall reimburse Authority for all Dut-ol-town travel and other' incidental and necessary expenses in the performance of Employee's duties for the City, including .. daily parking fees. City shall provide workspace and equipment for Employee as further described in \"Attachment A, Scope of Services". No monetary compensation beyond reimbursement of J",mployee's expenses shall be provided by the City for services rendered by Employee.

Sec. 4. Records. In accordance with generally accepted accounting principles, City shall maintain full and complete records of the cost of services performed under this Agreement. Such records shall be open to inspection by Authority at all reasonable times in the City of San Diego. Such records shall be maintained and kept for at least three. (3) years after the termination of this Agreement, the completion of services to be performeci'-under this Agreement, or until all disputes, appeals, litigation or claims arisin~ from this Agreement have been resolved, whichever is later.

City understands and agrees that Authority, at all times under this Agreement, has the right to review project documents and work in progress and to audit financial records, whether or not final, which City or anyone else associated with the work has prepared or which relate to the services described in Attachment A" pursuant to this Agreement, regardless of whether such records have previously been provided to Authority. City shall provide Authority at City's expense a copy of all such records within five (5) working days of a written request by Authority. Authority shall also have the right to inspect at reasonable times the City's office or facilities, at which location Employee is engaged in the performance of services pursuant to this Agreement. City shall, at no cost to Authority, furnish reasonable facilities and assistance for such review and audit.

Sec. 5. Sub-consultants and Subcontractors. No sljb-consuftants or subcontractors are authorized under this Agreement.

Sec. 6. Comoliance. fn performance of this Agreement, City shall comply with the California r"air Employment and Housing Act ("FEHA"), the Americans with Disabilities Act ("ADA"), and all other applicable federal, state, and 10callClws prohibiting discrimination, including without limitation, laws prohibiting discrimination because of age, ancestry, color, creed, denial of family and medical care leave, disability, marital status, medical .condition, national origin, race, religion, sex, or sexual orientation. City shall clomply with the prevailing wage provisions of the California Labor Code, the Political Reform Act provisions of the Califomia Government Code, as applicable, as well as all applicable federal and state laws.

Sec. 7. Assignments. City shall not assign or transfer, directly or indirectly, voluntarily or involuntarily, any of its rights, duties, or obligations under this Agreement. in whole or in part, without the express prior written consent of the Authority's President/CEO. Any attempted or purported assignment of any right or obligation pursuant to this Agreement, without consent, shall be void and of no effect.

Sec. 9. Insurance Reouirements. The Authority understands that the City is a self-insured municipal agency.

Sec. 10. Independent Review. Each party hereto declares and represents that in entering into this Agreement it has relied and is relying solely upon its own jUdgment, belief and knOWledge of the nature, extent, effect and consequence relaling thereto. Each party further declares and represents that this Agreement is being made without reliance upon any statement or representation ~ot contained herein of any other party. or any representative, agent Dr attorney of any other party.

2 Sec. 11. Inteoration,) Modification. This Agreement c'" .Aains the entire agreement, between the parties and supersedes all prior negotiations, discu ssion, obligations and rights of the parties in respect of each other regarding the subject matter of this Agreement. There is no other written Dr oral understanding between the parties. No modification, amendment or alteration of this ""greement shall be valid unless it is in writing and properly executed by the parties hereto.

Sec. 12. Ownership of Records. Any and all materials and documents, inclUding without limitation, drawings, specifications, computations, designs, plans, investigations and reports, prepared by E:mployee pursuant to this Agreement. shall be the property of City from the moment of their preparation and the Employee shall deliver such materials and doc;uments to City whenever requested to do so by City. However, Employee shall have the right to make duplicate copies of such materials and documents for his own file, or for other purposes as may be expressly authorized in writing by City. Said materials and documents prepared or ·acquired by Employee pursuant to this Agreement (inclUding any duplicate copies kept by the Employee) shall not be shown to any other public or private person or entity, except the Authority as authorized by City. Employee shall not· disclose to any other public or private person or entity any information regarding the activities of Employee. except as expressly authorized in writing by City or Authority. The parties recognize the California Public Records Act may apply to and govern the rights and obligations expressed in this section. Notwithstanding the provisions of this section, each party acknowledges it must fully and legally comply with the applicable provisions of said Act.

Sec. 13. Termination. In addition to any other rights and remedies allowed by law, the President/CEO of the Authority or the Chief Operating Officer of the City may terminate this Agreement at any time with or without cause by frve days prior written notice to City of such termination and specifying the effective date thereof. In the event of tellT1ination, all finished or unfinished documents and other materials shall be delivered to City

Sec. 14. Dispute Resolution. If a dispute arises out ofpr relates to this Agreement, or the alleged breach thereof, and is not settled by direct negotiation or such other procedures as may be agreed upon, ahd if such dispute is not otherwise time barred, the parties agree prior toiniliating any litigation or arbitration to first try in good faith to settle the dispute amicably by mediation conducted in the City of San Diego, California, by the American Arbitration Association, or by such other provider as thl' parties may mutually select. Notice of any 5uchdispute must be filed in writing with the other party within a reasonable time after the dispute has arisen. Any resultant agreements or resolutions shall be documented and may be used as the basis for an amendrnent or directive as appropriate,

If mediation is unsuccessful in settling all disputes that are not otherwise. tirne barred, and if both parties agree, any still unresolved disputes may be resolved by arbitration conducted in the City of San Diego, California, by the American Arbitration Association, or by such other provider as the parties may mutually selecl, provided, however, that the arbitration award shall be non-binding and advisory only. Any resultant agreement or resolution shall be documented and may be used as the. basis for an amendrnent or directive as appropriate. On demand of the arbitrator or either party to this Agreement, both parties to this Agreement agree to. join in and become parties to the arbitration proceeding.

The foregoing mediation and arbitration procedures notwithstanding, all claim filing requirements of this Agreement and the California Government Code shall remain in fuilforce and effect regardless of whether or not such dispute avoidance and resolution procedures have been jmplemented, and the time periods within which claims are to be filed or presented to the Authority

3 Cle~k, the Government Code, or of . jWise, shall not be waived, extend€' ··'~r tolled thereby. If a claim is not timely filed or presented, sucht:laim shall be time barred and the ab6ve dispute avoidance and resolution procedures, whether or not implemented or then pending, shall likewise be time barred as '1,0 such claims. ) / Sec. 15. CaDtions. The captions by which the paragr",phs or sections of this Agreement are identified are for the convenience of the parties only and shal.l have no effect upon its interpretation.

Sec, 16. Required Signatures. It is an express condition of this Agreement that it shall not be complete, binding or effective until signed by the PresidenUCEO Dr an authorized designee on behalf of the Authority and by authoriz.ed representative of the City.

Sec. 17. Notice. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (a) by personal delivery when delivered personally, (b) by overnight courier upon written verification of receipt, or (c) by certified or registered mail, return receipt requested, upon verification of receipt. Notice shall be sent to the addresses set forth below, or such other address as either party may specify in writing:

If to the Authority:

Thelia F. Bowens, President/CEO San Diego County Regionai Airport Authority P.O.82776 San Diego, CA 92138-2776 Tel.: (619) 400-2444; FAX: (619) 400-2448

If to the City:

Ronne Froman, Chief Operating Office City of San Diego City Administration Building 202 est., 11 th Floor San Diego, CA 921 01 Tel.: (619) 236-6330; Fax: (619) 236-7153

Sec. 18. Partial Invalidity. If any term, covenant, condition, or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder shall remain in full force and effect, and shall in no way be affected, impaired or invalidated.

IN WITNESS WHEREOF, CITY and Authority have caused this Agreement to be executed by their authorized representatives, all as of the day and year first hereinabove written.

//1

1//

/f/

4 San Diego Courrty egional Airpori Authority , , Sian ature:f 'YJ.L; '-".....IV - \ Print Name: 1kUA: E4AAnb Approved as to Legal Form: r' < 1- ..,.,. (PI ~ By: ; ?::>~ k J Office of the General Counsel

City of San Diego

Signature: ...J.e~"-'&M==-----,:h-,L,I1..o,""",~/JlL4..&~'"",,'...... _

Print Name: -,R,t;'"""'t...JCf>,IJLJ,t~-,F:,-,&,-=!-I-<-,,='AJ.J=' __

, .

5 ATTACHMENT A - SCOPE OF SERVICES

The City and the Authority agree to an executive loan of the services of Employee for the Jllowing scope of services'. • assist the City on its special project and the Authority in developing land use compatibility plans for city owned airports and SDIA; • assist a team of City employees to conduct a thorough review of the management and _. facility development options for City-owned airports; • coordinate with City staff 10 assist on effective and beneficial resolutions of issues related to the management and development of City airports; • contribute to the final preparation of the City's General Plan as it relates to airports, airport land use plans, and other aviation issues; • • work with City finance staff to provide assistance in reviewing FAA grants, grant sponsorships and compliance with grant .assurances; . • provide planning assistance in the review of the development proposals solidted by the City for Brown Field Airport; • Assist in building community partnerships with key stakeholders and communities surrounding Brown and Montgomery Field Airports, as required; • work jointly to develop comprehensive business plans for Brown and Montgomery Field with milestones identifying key business development decisions; • work with City staff to identify issues relating to the FAA and Caltrans to facilitate increased communication and problem-solving between these and other agencies; • make recommendations, as necessary, that would improve communication in developing useable land use compatibility standards for urban sited airports • facilitate the development of optimal land use compatibility planning policies for the City owned airports and for the Authority's use in planning for improvements at SDIA; • Make recommendations to both organizations in furtherance of the completion of Airport Land Use Plans for SOIA and Brown and Montgomery Field Airports and in preparation of the Authority's comprehensive airport land use plan for the region; • help define and design a partnership between the City and Authority to meet the City's and the Authority's near term goals (Within six months to one year) with continuing liaison offered for the long term; • work out of an office in the City Administration Building using City-owned office equipment, inclUding a computer and telephone; and • Attend Authority Board meetings and senior staff meetings as designated by the President/CEO of the Authority.

6 EXHIBIT 12 SAN DIEGO COUNTY REGIONAL AIRPORT AUTHORITY

Privileged and Confidential; Attorney-Client Communication; Attorney Work Product

SAN DIEGO COUNTY REGIONAL AIRPORT AUTHORITY OFFICE OF GENERAL COUNSEL

MEMORANDUM

Date: June 21, 2007

To: Breton Lobner, SDCRAA General Counsel

From: Ted Sexton, Vice President, Regulated and Executive Operations'

Subject: Professional Activities and Accomplishments as Loaned Executive to City of San Di~go· April 2, 2007 to June 9, 2007.

This report provides information regarding my principal activities and the results of my service to the City of San Diego since 'my assignment on April 2, 2007 as a "Loaned Executive" to the Office of the Mayor. As specified in an Executive Loan Agreement dated March 31, 2007, between the City of San Diego and the Airport Authority, I was assigned to:

1. Assist the City to conduct a thorough review of the management and facility development options for the City's airports at Brown and Montgomery Fields;

2. Assist the City and the Authority in developing land use compatibility plans for the City's owned airports and SOIA;

3. Coordinate with City staff to identify effective and beneficial resolutions of issues related to the management and development of the City airports;

4. Assist in building community partnerships with key stakeholders and communities surrounding Brown and Montgomery Field Airports; and ) Service to the City of San Diego June 22, 2007 Page 2 of 7

5. Work with City staff to identify issues relating to the FAA, Caltrans and other agencies to facilitate increased communication and problem- solving. .

On March 2, 2007, the Office of the Mayor requested the Authority's expert assistance to address flight safety problems at Montgomery Field Airport caused by the construction and presence of a new building in close proximity to the airport. On March 12, 2007, the Authority offered to assign an experienced member of the Authority staff to work with the City to help resolve this situation. In addition to responding to the Mayor's request for assistance, the Authority's intention in loaning an executive to the City was (1) to facilitate a better working relationship between the City and the Authority, (2) to educate the City's staff on the role and jurisdiction of the Airport Land Use Commission, (3) to extend assistance to the City in it operations and future planning for Brown and Montgomery Fields, and (4) to promote the promulgation of new City procedures that ensure that all new proposed projects within the jurisdiction of the Airport Land Use Commission be submitted for consistency reviews. A broad description of tasks was included as an exhibit to the Executive Loan Agreement.

I have been informed by the Authority's General Counsel that the Airport Authority, through its staff, has the legal authority under state law to assist the City and to respond to the Mayor's request for guidance, advice and help, particularly under the provision of Public Utilities Code Sections 21670.3 and 21674. Acting as the Airport Land Use Commission for the entire County of San Diego, the Authority is charged "to assist local agencies in ensuring compatible land uses in the vicinity of ... existing airports", "to review the plans, regulations and other actions by local agencies", and, "to coordinate planning at the state, regional and local level so as to provide for the orderly development of air.transportation, while at the same time protecting the public health, safety and welfare." In short, the Airport Authority, acting as the Airport Land Use Commission for San Diego County is charged by Public Utilities Code Section 21674 with the dUty to coordinate airport planning in a manner that protects the public health, safety and welfare.

Pursuant to the terms of the Agreement, the following is a summary of the City projects I worked on and the planning activities I initiated since April 2, 2007:

• Sunroad Centrum 12 Office Building at Montgomery Field Airport.

Background: Located % mile north of the main Runway, the building, was constructed without compliance to federal height limitations stated in 14 CFR Part 77 • } and currently penetrates the federal protected airspace by 20 feet (160 feet maximum permissible height). The FAA issued a "Notice of Hazard to Air Navigation" determination for the building, finding it to be "an obstruction to air navigable spaces

2 Service to the City of San Diego June 22, 2007 Page 3 of7

amounting to a hazard" The City's concern centered on the FAA's determination and the allegations of unsafe flying conditions at the airport created by the height of the building.

Actions: At the request of the Office of the Mayor, and under the supervision of senior city staff, I assisted in drafting several potential options to modify local flight procedures that might, as interim measures, remedy the flight safety issue while a permanent solution was sought through the FAA. When requested, I attended meetings to identify the benefits and consequences associated with the options.

At the City's request, I drafted a proposal to the FAA for circulation to the City staff, the FAA, the Airport Authority and the Sunroad Centrum Office BUilding 12 builder. I assisted with coordinating meetings between City staff and the FAA and attended the meeting with the FAA. Our meetings were intended to explore the various stE;lPS the FAA might recommend the City undertake to ensure compliance with federal law. The C,ity's and the Authority's stated goal before the FAA was to restore safe flying conditions at the airport, in accordance with the dictates of the FAA, and to increase the public's confidence in the City's management of airport operations at Montgomery Field. The FAA's position, as stated by the FAA manager for the Obstruction Evaluation Service (OES)!, is that only the reduction of the building's height to 160 feet will satisfy the regulatory' requirement for protecting federal airspace from unwarranted encroachment.

Status: Resolution of the building height and safety issue remains pending.

Condominium at 202 Ivy Street.

Background: This property underlies the final approach path to Runway 27 at San Diego International Airport (SDIA). The condominium building on the property, which is both permitted and constructed, penetrates- both the FAA obstacle clearance surface and the bottom of the City's Airport Approach .overlay Zone (AAOZ).

Actions: I coordinated with the FAA to review the "Notice of Presumed Hazard" and the reasons set forth for said determination. I met several times with the City's department project reviewer/department head and Office of the Mayor to advise on a Stop Work Order until the City could resolve the situation. I provided relevant information regarding the height of an adjoining bUilding height that established a "shadowing condition" existed that might resolve the hazardous condition to the FAA's satisfaction. I discussed the ultimate building height with the building architect (AI DeDamato) and received written confirmation of the maximum height of the building. I followed up with the City's DSD group meetings on "lessons learned" and held several / meetings and conversations with Airport Authority Planning staff to ensure in the future

3 Service to the City of San Diego June 22, 2007 Page 4 of7

the ALUC's issuance of a land use compatibility determination for each building height relies on the FAA's determination of the permissible height under 14 CFR Part 77, rather than some unofficial height determination.

Status: The FAA has indicated it will issue a "Notice of No Hazard" determination in late June. The project construction is underway.

• Hotel Complex (two Towers) at east end of Harbor Island Drive.

Background: The property underlies the 14 CFR Part 77 Transitional Surface (100-1) protecting SOIA airspace. The proposed buildings penetrate the Transitional Surface and do not conform to the Port District's Master Plan height restrictions for that zone.

Actions: I coordinated with the FAA and provided the City and developer with a Part 77 case study, citing maximum permissible heights for the buildings. I, advised the Office of the Mayor on a press release and press conference. I followed up with ae briefing for the FAA's regional office and FAA headquarters staff and resolved remaining technical issues on height and reporting responsibilities (Developer versus Port District).

Status: The developer has agreed to conform the project to the maximum building heights dictated by the FAA, Office of Obstruction Evaluation. Design on the complex continues

• Office Towers at La Jolla Commons (seven properties)

Background: The property underlies the MCAS Miramar precIsion approach path to Runway 6L. As proposed and initially approved by the Marine Corps, the building height penetrated the FAA's Obstacle Clearance Zone. However, as permitted and currently under construction, the building height does not penetrate 14 CFR Part 77 protected airspace. Future buildings may, as proposed.

Actions: Reviewed all seven projects and attended conversations with the project architect (Allen Spellman) and DSD staff on project building height issues. I gained an understanding of the developer's position relative to MCAS's prior approval through its EIR process and MCAS ALUCP. The City confirmed its intent to comply with subsequent Part 77 height restrictions. I reviewed the Authority's role in providing a consistency determination with Airport staff and developed "lessons learned" for subsequent findings. I advised the mayoral staff on press release requirements (none needed) and worked with DSD on a letter to the developer confirming the height

4 Service to the City of San Diego June 22, 2007 Page 5 of7

restrictions on the building in question and future buildings. I followed up with an MCAS inquiry on the Mayor's Office press release.

Status: The builder is in receipt of the City's letter which explains the height restrictions for current building projects and lists the maximum heights of subsequent buildings. Construction work on project continues.

• Condominium at 2234 Brant Street.

Background: The property is located under SDIA's final approach path to Runway 27. The bUilding height exceeds the City's AAOZ maximum permissible height and the 14 CFR Part 77 surface and is under construction. Project has been permitted and has received a favorable consistency determination from the Authority.

Actions: I advised on an immediate Stop Work Order until the F;AA could provide clarity on the maximum allowable building height. I reviewed the Airport Authority's role on issuing a consistency determination in advance of the FAA's hazard determination. I met with DSD staff and reviewed, at length, the City permitting process and, corrective actions that could prevent the improper permitting of buildings within SDIA's Airport Influence Area (AlA).

Status: No construction underway until the FAA issues a "Notice of No Hazard'~

• High·Lift Crane Operation in Little Italy

Background: The construction crane underlies the SDIA final approach path to Runway 27. Its unrestricted operation would eliminate Category D aircraft (e.g., B777, B747, DC1 0) from making a straight-in instrument approach to Runway 27.

Actions: I worked with FAA, building developer and Airport staff to limit crane operations to those periods allowed by FAA that would not result in any restrictions to aircraft operations at SDIA.

Status: Crane operations permitted for periods specified with no impact to SDIA aircraft operations or airfield restrictions.

• Brown Field Airport Layout Plan (ALP) - I met with Airport Authority staff and the project attorney to clarify the Brown Field ALP dimensions and its impact on the Authority's determination of the appropriate safety layer for the new ALUCP. I provided assessment and guidal')ce, as requested.

5 Service to the City of San Diego June 22, 2007 Page 6 of7

• City Permitting Process .Improvements and Airport Authority Project Consistency Reviews. I have been working closely with the DSD staff in the permitting branch to revise the construction project .application packages. The revised packages will include information on requirements on obtaining FAA height determinations. The City permitting staff will now have a check-list that requires a FAA "sign-off' prior to the City's issuance of a final building permit.

I am providing review and guidance to the City's permitting staff on projects within the City's Airport Influence Areas (AlA), as well as, working to develop a set of maps depicting accurate AlA boundaries.

I have worked to ensure Airport Authority land use consistency project reviews now coincide with FAA hazard determination case studies to prevent any confusion on the permissible height determinations on projects near airports.

I have established strong .lines of communication between both the City and the Authority to ensure all future projects within the AlA of any airport in the City receive review by the Authority to prevent future projects surrounding any City Airport, military base, or SDIA from receiving a building permit without a proper consistency finding (including proper notice to the FAA, the Authority, and the ALUC).

• City/Authority Development of new Airport Land Use Compatibility Plans (ALUCP) for City Airports/Military Bases and SOIA. I have attended the Authority's ATAG meetings and selected ATAG sub-committee meetings to observe the development process for the consistency criteria proposed for these airport's new ALUCPs. In addition, I have been studying thEj appropriate • jurisdictional boundaries of the respective AlA's and working to provide a set of maps that accurately depict their boundaries to prevent future misunderstanding.

• Study of City Owned Airports for Developing Management Options for City and Airport Authority. I have undertaken, with the cooperation of the City's Real Estate Assets Department overseeing Brown and Montgomery Field Airports) a continuation of the study of these two airports which began in early 2006 and which was last reported on to the Board in a staff memorandum dated January 24, 2007.1 have studied and reviewed the provisions of the City Charter and other documents. I have made numerous airport site visits, in company with city officials, and discussed conditions at both facilities with an eye to providing the City with several management options/models. I have visited with representatives of the FAA at regional headquarters to brief them on this issue and have sought their input on areas of FAA oversight (including, but not limited to FAA grant administration, airport certification, emergency preparedness, air navigation facilities status, training documentation. I have prepared a summary of

6 Service to the City of San Diego June 22, 2007 Page 7 of 7

my analysis and, at the Board's direction am prepared to provide the information in any manner requested.

During my assignment with the City, I have continued to attend Authority Board and staff meetings and other events as needed to keep informed of Authority developments, including (1) participation in the recruiting and hiring a Department Head position, (2) and completion of required Authority personnel evaluations.

, ) j

7 EXIDBIT 13 JERRY SANDERS MAYOFI

May 18, 2007

Mr. JeffBrowll Ms. Karen McDonald DIvision of Aeronautics Air Traffic Airspace Branch CALTRANS FAA M,S, 1140 ASW-520 1120 N, Street 2601 Meacham Blvd. PO !lox 942873 Fort Worth, TX 76137-0520 Socramento, CA 94273-0001

Re: Compliance with FAA Norice ojHazard

DeaT Mr. Brown and Ms. McDonald:

I ~~ writing as the M~yor of the City of San Diego regarqil"!g the Sunroad Cen~rum 1~ office building, wl~ich is being constructed l~,enr Montgomery·Field Airport in San Diego.

It is apparent that the City failed to stop work an the project and prevent the building from reaching 180 feet after it knew of the FAA's concerns. I take fuIJ responsibility for that mistake and want to do everything within my -power to .corre,cf it. I have initiated a thorough review ofhow the decisions that led to this situation were made so r can ensure that this will never happen again.

1support your findings that .the building must be reduced in size so that it is no longer a hazard to public safety, As Ms, McDonald is aware, my staffhas put forward a proposal that will reduce the building height to 163 fect with the exception of the mechanical equipment enclosure room which would rem

i WOll!e! t;:nC01H'qg~ ycnl ~o com;iQ~r this proposal, but 1also want to make dear that I will support whatever your ultimate judgmenl is regarding appropriate remedial actions. .~ ! i!';~ stx10n - sunroad rage L.

Page 2

1 am by this leiter taking the following !lction:

1. 1have directed the Development Services Department to infonn Sunroad that the City is reinstating the requirement ofstrict observance of the Stop Work order of October 27, 2006. That notice was served this moming.

2. I support the City Attomeyls civillawsuil, and will support rum in taking any and all necessary steps to fuUy enforce the civil public nuisance mandate of State and local law on behalfof the City.

3. I have directed the Cityls Chief Operating Officer, Retired Admiral Ronne Franum, to conduct a thorough investigation into the pennitting process for this project, including the City's reaction, or lack thereof, to yourconcems regarding the 180 foot height. Your cooperation jn this inquiry will be critical to our refonn efforts.

Thank you.

Very truly yours,

M~y.or City of San Diego

cc: Honorable Mike Aguirre, City Atlomey Honorable Members of the San Diego City Council Ronne Froman, City Chi ef Operating Officer Jim WuTing, Deputy.ChiefOpcrating Officer Marcela Escobar-Eck, Director, Development Services Department lim Barwick, Director, Real Estate Assets Department Attachment 7 REMARKS BY MAYOR JERRY SANDERS CITY OF SAN DIEGO MAy 18,2007

CITY'S CONDUCT REGARDING THE CONSTRUCTION OF THE CENTRUM 12 OFFICE BUILDING BY SUNROAD ENTERPRISES

Today, I'll be sharing with you actions I am taking regarding the construction ofthe Centrum 12 office building by Sunroad in Kearny Mesa.

As a career law enforcement officer and now as mayor of San Diego, three guiding principles have always guided my judgment on matters ofpublic policy: 1) public safety must always be , ) government's first priority; 2) citizens and corporations must always follow the law; and 3) when and ifyou make a mistake, admit it and ensure that it will never happen again.

There is no more basic responsibility oflocal government than to protect the safety ofits citizens. My entire professional career has been dedicated to honoring this principle.

Beginning in the early summer oflast year, the FAA very clearly communicated that ifthe Centrum 12 office building surpassed 160 feet, it would constitute a hazard to public safety. As the legally chartered agency ofgovernment designated to make those judgments, I respect the FAA's authority and honor their judgments. After the building was built to 180 feet, CALTRANS also communicated the public safety implications ofthe height.

It appears that Sunroad knew ofthe FAA's admonitions last summer and intentionally ignored their direction to limit the building's height to 160 feet. We are a society oflaws, and Sunroad - just like everyone else - must comply with the law.

The story does not end there. The City deserves its share ofthe blame. The reality is that the Development Services Department and the City Attorneys Office were aware ofthe FAA's concerns, and for reasons that are not entirely clear, failed to act.

I take full responsibility for that mistake and will to do everything within my power to correct it.

1 Today, I have sent a letter to the FAA and CALTRANS supporting their fmdings that the building must be reduced in size. In my letter, I also inform both gove=ent agencies that I support the City Attorney's civil lawsuit against Sunroad.

I want to very clear differentiate the civil lawsuit against Sunroad regarding the top 20 feet of the building from the criminal complaint that Mr. Aguirre has brought against Mr. Story. Those are two entirely different issues. A judge has made his opinion known on the criminal complaint against Mr. Story. The civil matter is an entirely separate matter and is one that has not been heard yet by a judge.

While Mike Aguirre and I don't see eye to eye on every issue, I support his pursuit ofthis matter in a civil courtroom. As City Attorney, he has a lawful obligation to pursue this matter in accordance with the civil public nuisance mandate ofState and local law on behalfofthe City.

I have directed the Development Services Department to inform Sunroad that the City is reinstating the requirement ofstrict observance ofthe Stop Work order ofOctober 27, 2006. No further work will occur onthe top 20 feet ofthe building. That notice was served on the job site this moming by the city's chiefbuilding inspector.

Clearly something went wrong with our processes. The City failed to act in a timely manner. Our citizens deserve better, and I want to ensure that we review our processes so that this can never happen again.

I have directed the City's Chief Operating Officer, Retired Admiral Ronne Froman, to conduct a thorough investigation into the permitting process for this project. I have asked Admiral Froman to pay particular attention to the City's reaction -- or lack thereof -- to the . concerns ofthe FAA. The result ofher investigation will be that safeguards will be put in place so that this kind ofmistake can never happen again.

When this matter came to my attention, I immediately directed staffnot to permit any future buildings without the appropriate FAA clearances. That safeguard is now in place going forward. But our process review will examine the process holistically to ensure that everything is being done to avoid this kind of situation in the future.

I have told Admiral Froman that the investigation must be conducted on an expedited time frame so that proper controls are put in place. I would expect the investigation to be completed within a number ofweeks so that any resulting safeguards can be instituted immediately. The products ofthe investigation will all be made public.

Within the last three weeks, my staffhas put forward a proposal to the FAA that I am asking them to consider. The top ofthe building is framed by a faux architectural feature. Ifthis feature were to be removed, the building's height would be reduced to 163 feet. The only remaining structure would be a mechanical equipment enclosure located in the center ofthe roof. The equipment enclosure room constitutes 15% offue overall roofline. The proposal also includes other technical changes designed to de-conflict aircraft operations and the building.

2 Whether or not this proposal satisfies the concerns ofaviation safety will determined by the FAA. I will respect the ultimate judgment ofthe FAA and will abide by their opinion.

Mistakes were clearly made within my administration regarding this project. I believe that they were mistakes ofthe mind and not the heart. Myjob is now to fix them so that this type of situation can't happen again.

###

3 Attachment 8 JERRY SANDERS MAYOFl

Mny 18,2007

Mr. Jeff Brown Ms. Karen McDonald Division of Aeronautics Air Traffic Airspace Branch CALTRANS PAA M,S, #40 ASW-520 1120 N. Street 2601 Meacham Blvd. PO 130x 942873 Fort Worth, TX, 76137-0520 Sacramento, CA 94273-000l

Re: Compliance H'ith FAA Notice o/Hazard

Dear Mr. Brown ond Ms. McDonald:

I ~m writing as the M~yor of the City of San Diego regarqiQg the Sunroad Centrum l~ office building, which is being constructed near Montgomery-Field Airport in San Diego.

H is apparent that the City failed to stop work on the project and prevent the building from reaching 180 feet after it knew of the FAA'5 concerns. I take full responsibiJi ty for that mistake and want to do everything within my power to .correct it. 1have initiated a thorough review ofhow the decisions that led to this siruation were made so I can ensure that this will never happen again.

I support your finditlgs that the building must be reduced in size so that it is no longer a hazard to public safety. As Ms. McDonald is D.ware, my staffhas put forward a proposal that will reduce the building height to 163 feet with the exception of the mechanical equipment enclosure room which would remain at 180 feet. The equipment enclosure room constitutes 15% of the overall roofline. The proposal also illclud~s working with tbe FAA to discontinue circling instrument approaches north ofthe field and allowing aircraft to circle to the south. Additionally, '. visual course rules would be modified to ensure that aircraft,remain well clear of the building. In the long-term, the City would coordinate with the FAA and the developer to fund and install a str~ight-in ~n~tf1.~~e!1l Dpprqach proce.qure to R!Jnw~y 10 L~~. All onhe~e c!umges (lre ~h.;:sigpeq to de-conflict aircraft operations and the building. .

J woule! !==I1COlJn:!g~ YQ~ ~o cQt1~ic!~r ~hi~ proposal, but J also want to make clear thai I will support whaiever your ullimale judgment is regarding appropriate remedial actions. Page 2:

I am by this letter taking the fonowing action:

1. 1have directed the Development Services Department to infonn Sunroad that the City is reinstating the requirement of strict observance ofthe Stop Work order ofOctober 27, 2006. That notice was served this lTIoming.

2. 1support the City Attomey's civil lawsuit, and will support him 1n taking any and all necessary steps to full.y enforce the civil public nuisance mandate of State and local law on behalf ofthe City.

3. J have directed the City's ChiefOpel'8ting Officer, Retired Admiral Ronne Froman, to conduct a thorough investigation int{) the pennitting process for this project, including the City's reaction, or lack thereof, to your concerns regarding .the 180 foot height. Yqur cooperation in this inquiry will· be critical to our refonn efforts.

Thank you.

Very truly yours,

M~ypr City of San Diego cc: HonoT;:lble Mike Aguirre, City Atlomey HonorllbJe Members of the San Diego City Council Ronne Froman, City ChiefOpeniting Officer Jim Wuring, Deputy Chief Operating Officer Marcela Escobar-Eck, Director, Development Services Department Jim Barwi~k, Director, Real Estate Assets Department Attachment 9 FOR IMMEDIATE RELEASE Contact: Fred Sainz June 7, 2007 858-442-8914

'-- ~ F_A_C_T_S...,..H-E-E-T------~I

'LOANED EXECUTIVE' PROGRAM PROVIDES CITY' WITH INVALUABLE EXJ>ERlENCE AT NO COST

AIRPORTA UTHOJUTJ"S LENDING OF TED SEXTONA 'BESTPRACTICE' . FOCUSED ON OVERALL CIrl'AIRPORTS PLANNING

In late March of this year, the San Diego Regional Airport Authority entered into a servi~es agreement with theCity ofSan Diego to lend the City the services ofAuthority vice ." president Ted Sexton for 6 months from April 1- September 30,2007, .

The City owns and operates twoairpolts: Brown and Montgomery Fields. Mr, Sexton was brought on board, at no charge tOe the City, to help the City determine how'these airports could be operated more effectively alld whether or not the City should be in the airport business· at alL Mr. Sexton·'·s responsibilities while at the City are clearly.articulated in agreement between ·the ab'Teement and the City. Mr. Sexton was not brought on board to manage the Sunroad , building issue.

• 'Loaned executive'"pro!,'Tams are considered a best practice in the public sector. Traditionally they involve the lending of a highly experienced employee that the receiving agency could not otherwise hire. Their service is for a limited period of time or specific project.

This is· the case in this situation. The City is receiving Mr. Sexton's services for free. Were it not for this agreement, the Clty would not be able to afford his services. Mr. Sellton possesses decades of experience in airport planning and will lend immeasurable assistance to the City in plalming the future of its aiJl'orts operations.

, ( The City has had three lOal1ed executives since Mayor Sanders took office: Rich Haas fTOm San Diego County, who eventually joined the ~ity; Tony Heinrichs from the PorI Authority; \ and Mr. Sexton. The City received all of their services for free. \ I )

i I I I j Attachment 10 FOR IMMEDIATE RELEASE May 22, 2007

~YORJERRYSANDERS I FACT SHEET CITY ATTORNEY'S MISMANAGEMENT OF HIS OWN BUDGET "INCONSISTENT WITH CITY FINANCIAL REFORM EFFORTS"

Mayor Jerry Sanders was elected in large part to reform and bring greater transparency the City's budgetary practices. One ofthe most fundamental reforms that the Mayor introduced in preparation ofthe City's FY07 budget was the elimination ofhundreds of"supplemental" or "phantom" positions. In spite ofthe City budget office's clear and precise direction to all departments last year (see attached memo), the City Attorney's office ignored the request to disclose all supplemental positions and instead has relied on the games that got the City into trouble to begin with, using salary savings to fund 17 positions that technically do not exist.

In spite ofthe fact that virtually all City departments are losing positions as part ofthe Mayor's budget proposal, the City Attorney has demanded that these 17 positions be funded. Despite the Mayor's willingness to consider the City Attorney's request, the necessary revenues simply do not exist to fund all ofthe positions. Sanders is dedicated to ensuring that all City departments receive the support they require to adequately carry out their missions. For example, the Mayor's proposal includes funding the same number ofpersonnel inthe City Attorney's office known to us last year as well as an increase in non-personnel expenses designed to correct the City Attorney's under-budgeting last year.

"I will continue to work with the City Attorney in a constructive fashion but his conduct is disappointing. Clearly, his behavior is also inconsistent with the financial reform efforts that I have brought to City Hall. My staffcould not have made it clearer that we wanted to bring transparency to our budgetary practices," said Mayor Jerry Sanders. "We asked for departments to disClose their supplementals. Mr. Aguirre had every opportunity to disclose those positions and allow for them to be funded. For reasons that are unbeknownst to me, Mr. Aguirre has chosen not to do so until now."

1 The 17 positions that Mr. Aguirre wishes to add to the budget cost the city approximately $2.3 million per year (average position cost of$135,389 x 17). Ih addition, all ofthe positions have pension liabilities associated with them that compound the annual costs.

At his news conference, Mr. Aguirre made the following allegations:

• Allegation: No one else is being treated this way.

Truth: The City Attorney's allegation is false. Employees are being cut from virtually every mayoral department ofCity government. As part ofthe Mayor's budget proposal, 671.53 Full Time Equivalents (PTE's) will be permanently eliminated from the City's budget in FY08. Since the Mayor took office in December 2005, he has eliminated 70953 FTE's from the City's payroll. Combined, this represents 9.1 % ofthe City's workforce in mayoral departments, excluding sworn public safety persounel. The Mayor plans to eliminate an additional 250 FTE's (for a total of 959.53 FTE) over the next two fiscal years resulting in a total mayoral workforce reduction of 12.4%.

With the exception ofthe City Attorney's office, no other non-mayoral departments asked for supplementals not previously disclosed to be added to the FY08 budget.

• Allegation: Not funding these positions will result in service cut-backs provided by the City Attorney's office. '

Truth: The City Attorney should reform his office so that there is no cut in service levels, just as every other department ofCity government willbe expected to do.

To ensure that there is no cut in service levels, the Mayor will support the addition on (of the 17) supplementals to the City's FY08 budget: the three positIons recommended in the Kroll report for financial reporting.

• Allegation: The Mayor's staffgave "their word" in open session to fund 12 ofthe 17 positions.

Truth: At the May 7th meeting ofthe Council's Budget Committee, ChiefFinancial Officer Jay Goldstone said that the Mayor supported funding 12 supplemental positions and that those positions would be reflected in the May revise budget document. The Mayor and Mr. Goldstone have always approached their budget conversations with the City Attorney's office in a constructive fashion and with a willingness to help.

However, Mr. Goldstone's statements were conditioned on there being the necessary revenues to meet the expense offunding the supplemental positions. Since that time, the City has received word ofsignificant and costly new expenses, including additional costs associated with the police raise, $1.4 million for the Chargers ADA lawsuit and $1.2 million for increased elections cost.

2 • Allegation: Not funding the positions is retaliation for the City Attorney's aggressive posture on Sunroad.

Truth: This statement is false and ridiculous. Mr. Aguirre is being held to the same standard as every other department ofgovernment. The Mayor's staffasked departments to disclose their supplementals back,in February 2006; Mr. Aguirre chose not to do so. Virtually every department ofCity govern.rhent will realize personnel cuts; the City Attorney's office should be held to the same reform standard.

3 CITY OF SAN DIEGO MEMORANDUM

DATE: February 7, 2006

TO: Distribution

FROM: Dean Roberts, Financial Management Assistant Deputy Director, Acting

SUBJECT: Fiscal Year 2007 Department Supplemental Budget lnfonnation Request

One of Mayor Sanders' main themes is transparency in budgeting. There are expenditures and revenues that have not been included in the budget over the years from past practices. Tht; information gathered from this request will provide the mayor and his administration the visibility to make informed budget decisions.

To accomplish this, Financial, Management is requesting the disclosure of all department supplemental information. This infonnation includes all supplemental positions, non-personnel expenses, and revenues that exist or are projected in Fiscal Year 2006. Any expenditures or revenues which are either not budgeted or not fully budgeted should be included in this submission.

Attached is a spreadsheet that has been designed to capture all department supplemental information. This exercise has been categorized into three sections: 1) Supplemental Positions 2) Supplemental Non-Personnel Expenses, and 3) Supplemental Revenue. Aside from identifYing the requested information in each category, please complete a justification 'that describes the necessity for carrying this item over-budget and a ramification if the item is not continued.

It is essential that this infonnation be submitted to Financial Management as part of the Fiscal Year 2007 budget development. process. This assignment is due no later than the close of business on Friday, February 10, 2006.' If you have any questions or concerns, please contact your Financial Management Liaison. Thank you for your cooperation,

Dean Roberts Financial Management Assistant Deputy Director, Acting

Distribution: Department Directors (electronically) Program Managers (electronically) Assistant Department Directors (electronically) Department Budget Analysts (electronically) Deputy Directors (electronically) Assistant Deputy Directors (electronically) l FY 2007 Budget Devalopmet,,_ .Supplemental Budget InformatIon

INSTRUCTIONS: Please complete each worksheet in this workbook identifying your departmen~$ supplarnenlal pos!!ions, supplemental non- personnel expenses and supplemental revenue. Be sure 10 Department Name: . thoroughlY complete the Information relating to each position. non-personnel expense and/or revenue item including funding: source, revenue accounts assoc1ated with the funding source and its reimbursable amount. Please use one line per funding source and add lines to each form as naCa5eBI)'. Provide justification for each supplemental position. non-personnel expense or revenue amount Division Name: and explafn the ramification of discontinuing each item. This Nlquest Is due on Friday February 10, 2006. Please contact your Financial Management liaison If you have any qU6stion$.

Department Number:

Division Number: SUPPLEMENTAL POSITIONS "For specific instructions on completing each column of information, please scroll ovarthe column title for further clarification. Annual PE (Salary + Funding Revenue R.ev Budgeted Ref # FTE DCA Classificatlon Title Class No, ReimblRevenue Justification RamifIcations if DIscontinued Fringe) Source Account (YIN) Amount

10 1~~jM)Q - f~11 ", ':::,'1--: .. ';' '. ::::';'l~i~~~ffi~1~mlli~~il~E*&! ·1~m~~.~ ~:, '..

NOTES: (Please note any special circumstances in this area. Please reference the line Item number,)

FY07suppiementatreo,uestxJs. Positions 5122/2007.12:43 PM Attachment 11 REPORTER'S TRANSCRIPT OF DVD RECORDING

RE: CITY ATTORNEY PRESS CONFERENCE

ON JUNE 12, 2007

PAGES 1 THROUGH 33

TRANSCRIBED JANUARY 9, 2008

TRANSCRIBED BY JENELLE K. BARTEL, RPR, CSR NO. 12687

Page 1

PETERSON REPORTING VIDEO & LITIGATION SERVICES , Page 21 Page 4

1 1v1R. AGUIRRE: Good morning, everyone. As you 1 'D~Jay,' 'deny,' or 'deceive.' San Diegans are craving 2 lmow, the investigation into the Sunroad matter by the 2 for someone to tell it to them straight; for their mayor 3 City Attorneis office is continuing. And in reference ,3 to tell tbem the whole trutb, what bappened, why it 4 to that investigation, we have focused in on a -- a 4 happened, and how it will be fIxed." Those are the 5 secret agreement that was entered into by the mayor 5 words ofJerry Sanders from bis 12 January 2006 State of 6 without-disclosure to the council, the public, and 6 the City address. 7 without jhe charter requirement that the city attorney's 7 \Vben we recognize that government has suffered

8 office review the document. I 8 from abuse and there's been a loss ofcredibility and we 9 I will have extensive remarks to make about 9 represent ourselves as Mayor Sanders did as someone who 10 documents that we were able to retrieve yesterday that 10 was going to restore the credibility ofgovernment and 11 had been inappropriately and improperly removed -- 11 the trust in government, and we set a standard in which 12 original documents that belong to the City of San Diego, 12 we say that we're going to tell the whole truth, what 13 there was an effort to remove them from the city's 13 happened, why it happened, and bow it will be fixed, 14 office. They were, in fact, removed from the city's 14 with that standard in mind, let's examine now what we 15 Real Estate Assets Department, sequestered over in the 15 know. 16 airport authority offices on Friday. They were original 16 Last Friday, without authority, the original 17 documents. 1 7 documents related to Sunroad that had been the subject 18 Yesterday, investigators from the City 18 ofa Charter Section 40 demand by the City Attorney's 19 Attorney's Office and lawyers were able to locate the 19 Office under which I have the authority to review and 20 documents, to capnrre the documents, and to return them 2 a take possession ofany document in the City of 21 to the City. Those documents are rather revealing and 21 San Diego -~ the original documents generated by 22 I'll be discussing them in detail in a moment. 22 Mr. Sexton were removed from the fIles in the offices of 23 But we are honored t.o'have Councilmember Frye 23 the City of San Diego to the airport autbority without 2 4 here this morning. She has to go to the council meeting 2 4 notice and without the pennission ofthe City. 25 immediately. And so she is going to make her comments 25 Yesterday, we were able to retrieve those

Page 3 Page 5

1 and then depart. Thank you. 1 documents, to recover the originals, and to return them. 2 (Councilmember FIYe makes remarks.) 2 We have been told this morning contrary to what we were 3 MR. AGUIRRE: I want to spend some time with 3 led to believe yesterday that there are additional 4 you discussing exactly what we have found out and 4 documents that will not be turned over today. 5 staying focused and ,concentrated on the facts. And from 5 Mr. Sexton has left the city. He will not be 6 those facts, I think there are a munber of questions 6 returning to the city according to the counsel for the 7 that have emerged. 7 airport authority until some future time unspecifIed 8 Our focus is on the mayor's actions and whether 8 And therefore, the information we're receiving now is: 9 those actions have, in fact, been honest, consistent, 9 The additional documents will not be provided. 10 and whether or not ~ere's been a cover up, whether or 10 After we received the documents, we made an 11 not there's been improper activity on behalf of a 11 inventory ofthose documents. And ifyou -~ you will 12 substantial campaign contributor. 12 recall, that the information that we were receiving from 13 And I say that knowing that we have a number of 13 the Mayor'~ Office and from the airport authority was to 14 different media representatives here who have sp~nt a 14 the effect that nothing could be further from tbe truth 15 great deal oftime on this stOIY. And wbat I'd like to 15 that Mr. Sexton was working on matters associated with 16 try to do is see ifwe can -- when you leave here today, 16 Sunroad. Nothing could be further from the truth. 17 you fee.l some sense of consensus on the facts. 17 :Mr. Bersin went out ofhis way to issue a 18 First of all, let me read to you something that 18 misleading statement -- and we'll have a transcript of 19 I think helps us at this stage. "Unfortunately in 19 that for you this afternoon -- at the airport authority 20 recent years, our local government has not lived. up to 20 meeting in which he disclaimed any cOImeetion with Aaron 21 the standards ofthe community it serves. San Diego's , 21 Feldman. 22 municipal government has failed its citizens and become 22 Amongst the documents that we found 23 an embarrassing and corrupt impediment to progress. 23 yesterday -~ ifI could have Kevin corne up here, 24 "As best I can tell, the operating philosophy Mr. Sexton -- ofthe entire plans oftbe Sunroad 12 25 around City Hall involved one ofthese three words: I~: building. Notbing could be further from tbe truth. 2 (Pages 2 to 5)

PETERSON REPORTING VIDEO & LmGATION SERVICES Page 61 Page 8 1 Mr. Sexton had a complete, comprehensive set ofthe 1 paper -- I think Mr. Hasemyer even identified it -- in 2 architectural drawings of the Sunrcad building. And 2 which he said he would produce all the documents by that 3 this is for Sunroad Centrum 12. 3 Friday. And, in fact, the documents were produced that 4 In addition, you might recall on May the 30th, 4 fol1ow~ng Thursday, but not produced was this document 5 the mayor. in response to a demand for any dOClUTIents 5 This document was withheld. 6 associated with Sunroad, produced a series of documents 6 So this document was withheld on May the 30th. 7 to the City Attorney's Office which have now been made 7 And then Friday, there was an effort to remove the 8 available, in part, to the media 8 document from the City to -- to the -- to the airport 9 Not produced by the mayor at that time was a 9 authority beyond the,reach of the City Attorney's Office 10 March 2nd, 2007, letter. Now March 2nd -- this was -- 10 directly under Charter Section 40. 11 the Notice ofHazard was issued on the. 11th ofAugust. 11 The letter goes on to say, HI would appreciate 12 The stop work order based upon that Notice ofHazard was 12 and am requesting that the airport authority assist us 13 issued on the 27th of October. J\n.d then expanded on the 13 in analyzing the situation and working with the FAA and 14 13th ofDecember. So the mayor _w or at least his staff 14 other interested stakeholders in an attempt to resolve

15 met with Aaron Feldman on the 19th ofDecember and the 15 this issue. II 16 stop work order was lifted on the 21st ofDecembet. 16 The mayor represented that he was not involved 17 January, February, half -- and into March. Now 17 in communications with :Mr. Feldman after the litigation 18 we have a letter from the mayor saying "The City is, 18 came on. Again, false statement by Mayor Sanders. 19 involved in litigation regarding a building constructed 1 9 The next document I'd like you to review is the 20 by Sumoad. For a number ofreasons, my office has 2 0 5/18/2007 e-mail. Now this is particularly significant 21 unfortunately been unable to get a clear analysis of 21 because it was on the 18th of May that I stood next to 22 whether or not-the building is a safety risk to 22 the mayor right here and had the mayor represent to you 23 aviation." 23 that he was in error for what he was doing. And that he 24 False. TheFAA~adalreadyissuedaNoticeof 24 was not going to do anything on behalf of Sunroad. And 2 5 Hazard. The FM is the authority and any deviation from 2 5 shortly thereafter, he attacked Sunroad for attempting

Page 7 Page 9 1 aNotice ofHazard in order to allow a building,to go up 1 to circumvent the limits established by the FAA 2 above the established limit bythe'PM requires a permit 2 This e~mail is sent from Ted Sexton to Kevin 3 from the California Department of Transportation. No 3 Haggerty who is associated with obstruction evaluation 4 such permit was ever applied for. The FM order of 4 at the FAA and Kimberly Middleton. "Draft presentation

5 Notice ofHazard, which could have been appealed, was 5 on San Diego hazardous obstruction elimination. It 6 not appealed. 6 There was no authority for the mayor to take a 7 So the first statement here that the mayor made 7 position with the FAA to change the landing at the -- at 8 in March was false and untrue because, in fact, there 8 the Montgomery Field Airport. Just think about what we 9 was a clear indication ofsafety risk to aviation. 9 would nonnally require for that to happen. 10 "And if so, whether there may be changes to 1 0 There would have to have been a meeting ofthe 11 operations or notices that would eliminate that risk." 11 airport advisory committee to get their input There 12 And that's the important language: "Changes to 12 would have had to have been a meeting ofthe Serra Mesa 13 operations or notices that would eliminate that risk." 13 Community Plarnring Group to get their input. There 14 ','While the lawyers say that the lawsuit will 14 would have probably -- certainly would have to have been 15 result in the building being lowered, the outcome of any 15 notice to Donna Frye ofthe changes that were being 16 lawsuit is never certain." The mayor had the authority 1 6 proposed because it would affect her district. That 1 7 without ai1Y lawsuit to get t?e building lowered, but he 17 wasn't done. There ~~ there was supposed to be a notice 18 chose not to do that All on behalf of a campaign 18 to the City Attorney because this could affect the 19 consultant. 19 litigation. That wasn't done. 2 0 This letter was not shared with the City 20 So the extent to which the mayor went to cover 21 Attorney's Office. This letter was not released on 21 up what he was doing while at the same time standing at 22 May 30th when the mayor represented that he had released 22 this very podium telling everyone in San Diego that he 23 all the documents associated with Sunroad to the City 2 3 had cleaned up the situation was false and misleading. 24 Attorney's Office based upon our demand. 24 Then he goes on and he says, "We are" -- this 25 .And remember, there was an article in the 25 is Mr. Sexton -~ "We, on our end, are set pretty much on 3 (Pages 6 to 9)

PETERSON REPORTING VIDEO & LmGATION SERVICES , Page 1°1 Page 12 1 Tuesday at Meacham Airport at 3:00 p.m. to brief him. 1 We don't have that data. 2 If that's convenient, thank~ again." So they're setting 2 Again, what rm suggesting here is that there 3 up a meeting with the FAA in this e-mail. That was at 3 is a very deep, on-going effort to circumvent the {egal 4 1:09. 4 requirements on behalf ofthe mayor's substantial 5 MEDlA REPORTER: What happened in 5 campaign contributor. \Vhile at the same time, the mayor 6 DallaslFort-Worth? Can you fast forward to that because 6 is mislead{ng the people of San Diego about his 7 the mayor put out a memo yesterday explaining his side 7 activities. 8 ofwhere all this led. 8 Then the 5/21 e-mail sent at 3:42 p.rn. Draft 9 MR. AGUIRRE: Well, that -- we're not really-­ 9 presentation to FAA re: Centrum 1 at Montgomery-Field. 10 I'm not focused on where it led. That's why I want to 10 So now anothersent 5/21 at 5:09. Draft 11 go through this because what I'm focused on -- on where 11 presentation. "Attached please find the draft 12 he was attempting to lead the people of San Diego before 12 presentation." 13 he got caught. That's what I want to focus on. And I 13 5/21 at 5:25. Another one that confirms what 1.4 know -- and I'll get to that. Let me just -- because 14 he's doing. 15 I'm not focused on the -- what I'm talking about now is 15 5/21 at 5:30 and 36 seconds. Cara McDonald 16 what he said about whether he was being candid and what 16 [phonetic], the evaluation obstructor -- evaluation 17 he was doing on behalf of a campaign contributor. 17 obstructor person -­ aclmowled.ges receipt. 18 Then here we have an e-mail a few minutes later 18 Then this is as late as 5/30. This is just 19 further memorializing the meeting and setting the 19 last week. 5/30. "To all on behalf ofthe City of 20 meeting up. 20 San Diego and.the airport authority, please let us thank 21 Now did he mention that there was gonna be a 21 you for stopping your busy day to help think tlrrough -­ 22 meeting with the FAA in Dallas on May 18th when he had 22 please understand our primary motivation: To eliminate 23 his news conference here in this room? No. Did he tell 23 any public perception ofa hazard to flight safety." 24 the City Attorney? No. Did he tell the Pilots 24 Not to eliminate the obstruction but to eliminate the 25 Association? No. Did he tell anyone in the media? No. 25 perception. "To restore public confidence in the flight

Page 11 Page 13 1 Did he tell the councilperson? No. Did he tell the 1 operations; to improve the capf!City and efficiency of

2 council? No. 2. the field. n And then he goes on, liNear tenn: Remove

3 There was an intentional effort to continue to 3 authorization for aircraft circling north. II 4 help a campaign contributor while concealing what was 4 The exact thing that 1said was happening last 5 going on and misrepresenting the efforts that he was 5 week that the :Mayor's Office said was nothing could be 6 making,and suggesting in his mea culpa that he was 6 further from the truth is exactly what Mr. Sexton was 7 taking responsibility, but he wasn't taking 7 being used for: Misuse of public funds on behalf of a 8 responsibility. 8 substantial campaign contributor; material 9 Then later on in the same day at 4:07, they 9 misrepresentations to a City Attorney who is 10 sent offthe draft e-.r:nail over to the FAA. 10 'investigating the matter; providing of false infonnation 11 And then at 4:37, "Attached is a presentation 11 to the media regarding the matter; and failure to 12 SKD for Tuesday in Dallas to Mr. HaggertY." Again, from 12 disclose the other documents relating to this. And now 13 Mr. Sexton: Draft presentation. 13 we have the disappearance ofMr. Sexton. 14 Then they sent drawings. Here's the drawings 14 Now the -- ifyou look at the PowerPoint 15 -- "And I do have your presentation. I should have 15 presentation, you can see that an enormous amount of

16 reviewed it shortly. II This is from Tom Kamman. "I have 16 effort went into this PowerPoint. The PowerPoint Air 17 some data from Sunroad." 17 Navigation Hazard Elimination Proposal. Air Navigation 18 Now this -- this e-mail now discloses that 18 Hazard Elimination Proposal. That's what the mayor was 19 Mr. Sexton is direct contact with Sunroad, working with 19 doing is he was trying to eliminate the hazard by making 20 Sunroad, using public resources to help Sunroad 20 the pilots all have to take over south over the 21 circumvent the safety provisions of the FAA. 21 Serra Mesa community. ThereTs three slides on that one. 22 MEDlA REPORTER: Which e-mail was that? I'm 22 Three more sides on that one plus a very 23 sorry. 23 comprehensive diagram ofthe airport. Three more slides 24 MR. AGUIRRE: That is the 5/19 at 6:59 a.m. 24 there. Two more slides with comprehensive analysis of 25 sent via Blackberry. "I have some data from Sunroad." 25 the airport again. Two more slides, slides nine and 4 (Pages 10 to 13)

PETERSON REPORTING VIDEO & LmGATION SERVICES Page 14 Page 16

1 ten. Now all of this is being done ~- all ofthis is 1 of it, but this is a majol." scandal in the City of 2 taking place last week. Last week. 2 San Diego in this administration in which the No.1 3 Here's where we are today. This is what we 3 person selected by the mayor who was in charge ofthe 4 lmow: The mayor obstructed the search warrant and made 4 investigationunexpectedly resigned yesterday. 5 it impossible to serve. His chief ofpolice leaked it 5 The documents that -- there was an effort to 6 to him. It was leaked to the media The refusal to 6 remove them so that they would not be available to the 7 serve was leaked to the other side. That was all done 7 City Attorney -- were recovered yesterday. Mr. Sexton 8 under the auspices ofthe mayor. 8 is gone. He's out oftown as oftoday. There's a 9 :rvIi.suse of publi~ ftmds to help someone who had 9 refusal to produce the rest ofthe documents. 10 violated the FAA laws; misuse of a public employee; 1 0 MEDIA REPORTER: Mike, you talked about 11 misuse of city resources, as I understand it, because 11 retaliation yesterday. Is this retaliation -­ 12 we're obligated to pay for the trip to Dallas; failure 12 MR. AGumRE: There is no question the 13 to disclose exactly what the FAA says, Gene. We don't 13 mayor cut-­ 14 know what they've said We just know that from the 14 MEDIA REPORTER: Is this retaliation by you 15 mayor M~ he says they turned it down, but we don't have 15 against the mayor? 16 any source documents yet. 'We don't have any written 16 MR. AGUIRRE: No, no, no. This-, 17 communication from the FAA. I take -- 1 7 MEDIA REPORTER: -- 14 people yesterday. 18 Yesterday, after the mayor found out that we 18 MR. AGUIRRE: This -- this -- this effort to 19 had fOlUld out what he was doing, he issued a new 19 investigate Sunroad has gon~ on for many months in the 2a clarification about what was going on. 2 a City Attorney's Office. The information that I had or 21 MEDIA REPORTER: What do you malee of all that? 21 the request that I made took place long before yesterday 22 MR. AGUIRRE: What! make ofthat is that the 22 and I have been in close contact with the airport. 23 mayor is only disclosing what he knows he has to 23 What I have said and I wiIl say it again: 24 disclose., One ofthe things that Gerry Braun pointed 24 There is no chance that I will let up on the Sunroad 25 out over the weekend is ifs very difficult to establish 25 investigation no matter how many employees are taken

Page 15 Page 17

1 what took place at the fundraiser that was sponsored by 1 away and no matter what retribution the mayor has 2 the Sunroad people for the mayor. We don't lmow how 2 visited upon the City Attorney. 3 much money was raised. We don't know what 3 This is -- this is different than the Murphy 4 communications took place with Sunroad and the mayor 4 Administration. This was two people were working: 5 ahead oftime. 5 together on a daily hasis up until Sunroad. I 6 The thing you have to remember is the mayors 6 repeatedly advised the mayor not to do,what he was doing ~ 7 staff issued the ISO-foot permit on luly the 7th after 7 on Sunroad. 8 the presumed Notice ofHazard had been issued on the 8 I have compromised and worked with the mayor-on 9 24th ofApril, after Sunroad had represented on June the . 9 almost every issue that's corne along trying to go more 10 20th and again on· June 22nd that they would limit it to 10 than halfway. And I have -- was criticized extensively 11 160. After all that had happened, under the mayor, his 11 for doing so with regard to condo conversions, with 12 people inexplicably issued a lBO-foot building permit. 12 regard to land-use matters. -I have protected or at 13 We need to have someone investigate whether the mayor 13 least represented decisions that I did not agree with, 14 was involved or Mr. Waring was involved or who was 14 but they were policy decisions. 15 involved- in that c;iecision. 15 But when we carne to Sunroad, there was no way 16 The person who was in charge of that 1 6 that Jcould look the other way. I carmot look the 17 investigation ofgetting answers to that and other 17 other way because ifI look the other way, that means 18 .questions unexpectedly resigned yesterday. 18 that I'm complicit in an unfolding saga ofwhat I 19 MEDIA REPORTER: Who was that? 19 consider to be unlawful behavior and I cannot look the 20 MR. AGUIRRE: Ronne Froman, the person in 20 other way. 21 charge ofthe investigation. 21 The fact that I think that they cut the 14 22 Bonnie Dumanis has been compromised, obviously. 22 people from my budget yesterday coupled with the effort 23 The state Attorney General's Office is not going to be 23 on the part of Chris Michelle [phonetic] and Fred Sainz 24 any help. We don't have a U.S. attorney that can be of 24 repeatedly to try to discuss Sunroad in the context of 25 help. I don't have subpoena power to get to the bottom 25 budget, I do believe was retaliation, but that is 5 (Pages 14 to 17)

PITERSON REPORTING VIDEO & LmGATION SERVICES Page 18 Page 20 1 yesterday's news. This is not a discussion about 1 what ~- what is unlawful is for someone to remove 2 retaliation right now. 2 documents that belong to the City out of the city 3 What rm asking is for the mayor -- and as I've 3 without authorization in order to avoid their production 4 said before, 11m asking for the mayor to do exactly what 4 to the City Attorney's Office under Charter Section 40 5 he represented that he would do when he was elected. He 5 which gives me access to all the documents so I can do

6 said, II San Diegans are craving for someone to tell it to 6 my job. 7 them straight; for their mayor to tell them the whole 7 MEDIA REPORTER: So are you med that they moved 8 truth, what happened, why it happened, and how it will 8 the docrunents or are you calling it unlawful that he was 9 be fixed." And we're asking the mayor to do that so 9 working for the City? 10 that you all can ask the questions and that we can get 1a MR. AGUIRRE: Well, fIrst of all, I'm not mad 11 to the bottom ofthis. 11 because I have redemptive good will for everyone, but 12 A rich campaign contributor who contributes 12 what I'm saying is both. I think it was wrong to remove 13 thousands of dollars to the mayor has been given special 13 the documents and I think •• he wasn't working for the 14 treatment by the mayor and his staff. They were allowed 14 City. The City-­ 15 to build the building in defiance ofthe FAA safety 15 let me explain to you. The position that 16 standards. They were allowed to circumvent the stop 1 6 Mr. Sexton was taking before the FAA is in complete 17 work order that the City Attomeis Office advised had 17 contradiction to the position ofthe City in the 18 to be put into place. 18 litigation. He was not working for the City. That's 19 They were given the benefit of a secret 19 why they needed to go to the council and the City 20 agreement with the airport authority; the misuse of an 2 a Attorney's Office and our outside counsel and to 21 airport authority employee to try to circumvent the FAA 21 disclose it to us what they were doing, but they didn't. 22 requirements; the misuse of city funds to pay for the 22 That was unlawful, improper, a breach offiduciary duty 23 travel ofthat employee, as we understand it; the 23 on the part of the mayor in doing that and a misuse of 24 ongoing cover up and misrepresentations; failure to 24 public funds. 25 disclose the whole truth by the mayor. That is the 25 The airport authority was not organized to help -­

Page 19 Page 21

1 picture we are dealing with right now. Iuld that 1 Sunroad circumvent FAA rules. That's not -- that's 2 building is still up. 2 not -- that service -- and I know that you could look at 3 And what you're going to find as the weeks 3 it at that level, but that's not helping the city. 4 unfold is that there are more documents that they're 4 That's helping a developer keep up a building that's a 5 refusing to turn over. I would like to ask the mayor to 5 flight safety hazard. 6 immediately order those documents to be turned over. 6 And the concept -- the statements that the 7 And secondly, there are more activities 7 mayor's making as late as March that he hasn't had a 8 involving land·use and airports in the South,' Bay and 8 clear picture about whether it's safe or not -~ that is 9 Otay that are tied -- also tied to Sunroad, also tied to 9 just completely contradicted by his other statements 10 this group, also tieq to a meeting that took place in 10 ,:where he acknowledges that as early as in April of 11 'the Mayor'S Office and you have the e~mail to show that 11 2006 -- a year earlier -- the FAA had mede it very clear 12 the meeting took place. So that there's even a bigger 12 that it was a threat to safety to put up the building at 13 picture that I believe wiD emerge over the next days, 13 180. And that's -- he acknowledges that it's the FAA 14 weeks, and months. 14 that does that. 15 We need to ask you to investigate this and to 15 The mayor is not being honest with the people 1 6 make sure that the interests of the people of San Diego 16 of San Diego. He's not living up to the commitment that 17 are protected by the media so that we have a fair and 1 7 he made to tell what happened, why it happened, and how 18 comprehensive treatment of these issues and these events 18 it wiD be flXed. And it is cynical and manipulative 19 and that the truth comes out. All I'm asking is for the 1 9 for hitn to have made those statements and set that 20 mayor to not be a "corrupt impediment to progress" using 20 standard and then so thoroughly and completely fail to 21 his own words. 21 meet that standard.

22 MEDIA REPORTER: Can you talk more about this 22 And his only reaction has been a concrete i 23 Section 40 and why it's illegal for someone from the 23 reaction, besides the misstatements that he's made about 2 4 airport authority to work with the City? 2 4 what he's been up to, has been to go after the 25 MR. AGUIRRE: Well, what's illegal or at least 25 persons -~ the budget ofthe City Attorney's office 6 (Pages 18 to 21)

PETERSON REPORTING VIDEO & liTIGATION SERVICES , Page 22 , Page 24 1 which happened yesterday. 1 that we were able to uncover all of-that infonnation 2 MEDIA REPORTER: So. Mike, what legal action 2 about the manipulation, Get Shorty, and all those kinds 3 can you take against the mayor? 3 of devices that were used, there was one reason and one 4 MR. AGUIRRE: Well, you know, that's very 4 reason only. And that was because ofthe media; because 5 complex. You know, in Los Angeles when the sheriff 5 the media dug deep. 6 defied the court system in the Paris Hilton case, the 6 And that's what we need to have here. We need 7 sheriff was made to capitulate to the judicial system. 7 to have the media sending out public records requests, 8 In San Diego, when the police chiefdefied the judicial 8 helping to get to the truth, forcing these people to 9 system, the judicial system capitulated to the pclitical 9 answer questions. The Airport AuthoritY,should be 10 system. 10 answering questions right now. And we need to 11 So it makes it very difficult for me to take a 11 understand what more information there is. 12 case into court ]mowing that my good friends at the 12 MEDIA REPORTER: If -- if Sexton isn't working 13 San Diego Union-Tribune will more likely than not put an 13 for the City, who is he working for? 14 editorial gun to the head ofany judge who considers 14 MR. AGUIRRE: Well, he is working for the City 15 such a case and make it very difficult -- and I don't 15 under the agreement. Ifyou -- ifyou look at the-­ 16 speak about Mr. Hasemyer in that regard -- but to make 16 this one terse e-mail, I think that that helps to 17 it very difficult for me to get the judicial system to 17 explain it pretty well. But it's a -- it's the e-mail 18 do what under the law should be. 18 thats dated April the 2nd, 2007. It's from Mike 19 Look at the predicament that welre facing. We 19 Tussey, who is the head of our Montgomery Field Airport, 20 can't go to the U.S. attorney because we don't have a 20 to Grace Chow [phonetic]. 21 U.S. attorney. 21 And it says "Per Barwick" ~~ and I believe 22 We can't go to the D.A. because she's already 22 :Mr. Barwick is the head. ofthe airport for real estate 23 compromised herself and is aligned politically with the 23 assets or maybe he's the head ofreal estate assets. I 24 mayor to the point of -- of compromising any interest 24 take that back. 25 that she has in thorough law enforcement. 25 "Recently FAA employee Ted Sexton is working

Page 23 Page 25 1 We can't go to her mend over at the Attorney 1 with the mayor for the next six months. Ted is paid by 2 General's office because he has done the same thing. 2 FAA, but airports will reimburse his parking. Ted will 3 And what we're left with is the City Attorney's Office 3 submit his receipt to us each month and we do pay petty 4 who is -- in trying to go to the court system, has not 4 cash. It is 150 per month to park in the Parkade and as 5 been supported in the efforts that we're making to clean 5 ofJuly 2007, it will he 160. Thanks, Grace." And then 6 this thing up. 6 it's copies to Aubrey Major, Consuela Cousins, Dora 7 So there -- you know, one of the ways of 7 Carrasco, Peggy Martinez [phonetic], and Ted Sexton. 8 looking at this is corruption, at least right now, has 8 Now I -- I don't know that the -- the 9 won out in San Diego. We don't have a U.S. Attorney 9 indonnation about paid by FAA, I don't know that that's 10 anymore. The D.A..has been thoroughly compromised. The 10 true. I think maybe thats a mistake. I think what 11 A.Go's office is sitting on the sidelines. And the City 11 theyre saying is airport authority. But the point is 12 Attorney has been rendered impotent by the failure on 12 that was the arrangement. 13 the part ofthe judicial system to support the 13 .f\nd then ifyou look at t.~e agreement that \-vas 14 enforcement effort that we've undertaken. 14 secretly signed by the mayor -- or not the mayor, but 15 MEDIA REPORTER: Is there some talk about going 15 Ronne Froman -- ifyou look at that agreement, it 16 back to Brown? I mean, didn't you -­ 16 provides --let me just walk you through that quickly. 17 lvlR. AGUIRRE: There's some -- there's some talk 17 Ifsomeone could help me with a copy ofthe agreement, 18 about that, but -- but I would thin!c under these 18 ifthey have an extra, I would appreciate it muclliy. 19 circumstances that that is not a likely outcome. So 19 MEDIA REPORTER: Wbich agreement? 20 right now what we're trying to do is on the one hand, 20 !vIR. AGUIRRE: Ofthe -- the loan agreement 21 figure out what happened. And I think that's what we 21 MEDIA REPORTER: It's attached -­ 22 need. 22 1v1R.. AGUIRRE: Let mejust -- let me just have 23 You know, when I did the electricity case, the 23 that, Maria, ifyou don't mind. Thank you very much. 24 No.1 reason that the electricity case -- you know, the 24 Maria Velasquez, always competent and efficient in every 25 manipulation of electricity prices -- the No. 1 reason 25 respect. 7 (Pages 22 to 25)

PETERSON REPORTING VIDEO & LmGATION SERVICES Page 261 Page 28

1 This agreement which is dated 31 May -. 1 me becau~e one ofthe things I would have never approved 2 31 March of2007. So the mayor sends the letter on 2 of is that provision. Why would you keep secret what 3 March the 2nd. The agreement's entered into on March 3 Mr. Sexton was working on? That doesn't serve the 4 the 31st and it says that -- on the one, two, three, 4 City's interest. 5 four, five •• the fifth paragraph "Whereas Authority 5 MEDIA REPORIER: Have you ever heard ofthis 6 employee, Ted Sexton, herein after 'employee' has the 6 executive loan program before? 7 experience -- or has expertise in the area of airport 7 :tv1R. AGUIRRE: I'm not saying that it doesn't 8 management and development, federal and state regulatory 8 exist, but I have personally never seen it. I know that 9 controls, an~ land-use compatibility. That -- noW 9 they said that there was some people that -- that -­ 10 therefore in consideration ofthese recitals, terms, and 10 . that -- I guess there was a port that they had used, 11 conditions, Authority agrees to provide City with the 11 that sort ofthing. And I could envision a set of 12 executive loan ofthe services ofemployee iI? accordance 12 circumstances which something like that might be done 13 with Attachment A." 13 after proper disclosure with the councilor a committee 14 Now ifyou go to Attachment A. what's 14 and the City Attorney. 15 interesting about Attachment A is it doesn't say 15 Butlet me tell you what I've never seen. And 16 anything about Sunroad. It's -- it's a whole series of 1 6 maybe I -- maybe I'm wrong because the mayor's calling 17 things that -- that are listed there having to do with 17 this 'best practices.' This-may be 'best campaign 18 land-use. And ifyou go to Section 12 -­ ifI can 18 contribution fundraising practices' by having the port 19 invite your attention to Section 12, Section 12 says 1 9 authority help out a major contributor keep a building 20 "Any and all materials and documents including, without 2 0 that violates the safety limits in place in order to 21 limitations, drawings, specifications. computations, 21 ensure a future campaign contributions. That may be 22 designs, plans, investigations, and reports prepared by 22 'best campaign contribution practices,' but it's 23 employee pursuant to this agreement shall be property of 23 certainly not 'best practices' when it comes to 24 City from the moment oftheir preparation and employee 24 governance of a city. '25 shall deliver'such materials and documents to City 25 The money that was spent on Ted Sexton, there

Page 27 Page 29

1 whenever requested to do so by City." 1 should be an investigation to detennine ifthere were 2 Okay. I -- I'm the City because I'm -- under 2 misuse ofpublic funds. Remember the employee ofthe 3 Charter Section 40, I -- you know, I bave that 3 county -- ofthe city who took pictures at the Cox -- at 4 authority. But when I requested them, I wasn't given 4 tEe Cox fundraiser because,they want -- apparently there 5 the documents. In fact, the documents were removed from 5 was an effort to try to catcb that employee -- that -­ 6 ~C~ 6 Mayor Cox with David Malcolm? That person who took 7 And then ifyou read down a little fu{ther, it 7 those pictures was investigated by the District 8 says the parties recognize --I'm sorry. "Employees 8 Attorney's Office for misuse ofpublic funds for -- for 9 shall not disclose to any other public or private person 9 taking -- taking pictures of a political event wbile on 10 or entity any infof:!D.ation regarding the activities of 1 a duty. 11 employee except as expressly authorized in writing by 11 As it turned out, apparently. that person bad 12 City or authority." Now that is extraordinary. 12 turned in some kin,d of leave slip so they were not 13 I think the Union-Tribune has done some stories 13 indicted by the Grand Jury for misuse ofpublic funds. 14 about the effort to tl)' to control the flow of 14 But what they were indicted for was not telling the 15 infonnation ,?ut ofthe City, but I would never have 15 truth about whether that person had, in fact, gotten 16 approved this agreement. And the mayor's -- what I 1 6 leave. 17 considerto be a lame excuse for why it wasn't shown to 17 So let's look at that analogy. The district 18 the City Attorney which is because, as he claims, there 18 attorney thought it was seriously -- a serious enough 19 was no money involved. 19 situation that an employee ofthe city took time from 20 That, first of all, isn't true because the City 2 a their duties to take pictures at a political event 21 is providing reimbursement. But it's not just for 21 involving a few hundred dollars at most. That turned 22 money; the qty Attorney's Office is obligated to make 22 into a felony perjury prosecution and the expenditure of 23 s~e that every single contract we sign. the City's 23 four hundred thousand dollars in legal expenses -- or at 24 interests are protected. 2 4 least some significant portion ofthat -- in the City of 25 So this document was intentionally not shown to 2 5 Chula Vista in connection with that investigation.

8 (Page~ 26 to 29) PETERSON REPORTING VIDEO & LmGATION SERVICES Page 30 Page 32 1 Now here we have a situation where Mr. Sexton 1 matters and no approval was forthcoming. 2 has been working since March, April, May, and now going 2 One ofthe things the mayor can do is ask 3 into June. The amount ofmoney that :MI. Sexton has 3 Mr. Sexton to come back from whatever location -- remote 4 spent has to involve thousands of dollars. There's the 4 location he's in right now and allow the media to 5 trip to Dallas; there's his time; the other matters that 5 interview him as well. Thank you. 6 I've covered. 6 * * * 7 Is there gonna be an investigation by the 7 (End ofrecording.)

8 district attorney's office into RR into whether there 8 9 was a misuse ofpublic funds by Mr. Sexton and by the 9 10 mayor in order to accommodate a campaign contributor? 10 11 Will that be happening? 11 12 In other words, will the D.A. be taking actions 12 13 consistent with what she did in this other case when 13 14 there's m~y more thousands of dollars involved in which 14 15 the safety ofthousands ofpeople and all ofour pilots 15 16 that go in and out ofMontgomery is involved? Will the 16 17 D.A be stepping up to do that? Or was that something 17 18 that was motivating people to kill the search warrant on 1 8 19 so we wouldn't find that kind of information? Are there 19 20 other explanations? This is a serious scandal. 20 21 Ifyou look at the Scooter Libby case, 21 22 Scooter Libby was convicted and is on his way tojail 22 23 for two-and~a-halfyears. Why? Because he deprived the 23 2 4 grand jury and the FBI of accurate information about 2 4 25 whether or not information was leaked. 25

Page 31 Page 33 1 Was there a leak in this case? Yes, we know 1 I, JENELLE K. BARTEL, RPR, Certified Shorthand Reporter 2 that there was a leak ofthe search warrant. Did that 2 For the State ofCalifornia, do hereby certify: 3 deprive the City Attomeis Office of information that 3 4 was necessary to fmd out the truth? AbSOlutely. 4 That the DVD recording ofthe above proceedings was taken dOWIT 5 In the case of Scooter Libby, that person's 5 by me in machine shorthand to the best of my ability and 6 going to jail for two-and-a-half years. Where's the 6 transcribed through computer-aided transcription and that the 7 investigation in this case? Where's the investigation 7 foregoing is a true record ofthe said DVD recording. 8 in this case by the A.G. and the D.A. that have felony B 9 Dated: This day of~ ~, 20-, 9 investigative powers? That is a serious problem in 10 at San Diego, California. 10 San Diego. 11 11 This is exactly what all ofus said we weren't 12 12 gonna pennit again and irs happened again. And it's 13 13 \vorse than what happened before because we had r~sed 14 JENELLE K. BARTEL, RPR 14 everyone's expectations that we were gonna be different. C.S.R. NO. 12687 15 And we need your help to get to the bottom of it 15 16 i1.nyone else have any other questions? 16 17 Thank you all very, very much for you..­ 17 18 attention today. I very much appreciate it. 18 19 And we'll be letting you know as soon as we get 19 20 the other documents ifwe can locate wherever Mr. Sexton 20 21 has disappeared to, we're hoping to try to interview him 21 22 about these matters as welL 22 23 We've asked before he -- before he fled 23 24 San Diego -- we asked to interview him ~- Miss Froman -­ 24 25 we asked Miss Froman if we can interview him about these 25 9 (Pages 30 to 33)

PETERSON REPORTING VIDEO & LmGATION SERVICES Attachment 12 San Diego City Attorney MICHAEL J. AGUIRRE

NEWS RELEASE

FOR IMMEDIATE RELEASE: June 12,2007 Contact: Maria Velasquez, Communications Director (619) 235-5725

DOCUMENTS OBTAINED BY CITY ATTORNEY REVEAL MAYOR MISLED PUBLIC ABOUT LOANED EXECUTIVE'S ROLE IN ASSISTING SUNROAD ENTERPRISES EVADE FEDERAL AIR NAVIGATION SAFETY REGULATIONS

San Diego, CA: Documents obtained by the City Attorney's Office show that executive Ted Sexton, on loan to the City from the San Diego County Regional Airport Authority, flew to Texas on May 22, 2007, and met with the Federal Aviation Administration (FAA) to request that flight path modifications be implemented to accommodate Sunroad's 12-story Centrum 1 building. But as recently as last Thursday, June 7, 2007, Mayor Jerry Sanders told the news media that Sexton "was not brought on board to manage the Sunroad building issue."

The FAA has determined the 12-story building to be an air navigation hazard to pilots flying in and out of Montgomery Field in Kearny Mesa.

"In his fIrst State ofthe City address the Mayor proclaimed that City Hall was corrupt and that the philosophy at City Hall was to 'delay, deny or deceive'. But now it appears the Mayor has not been truthful with the public," said City Attorney Aguirre. "We know now the meeting with the FAA was to help Sunroad Enterprises, a campaign contributor to the Mayor's election, evade federal law."

Yesterday afternoon, as documents requested by the City Attorney's Office were being turned over, the Mayor's Office released a memorandum to the City Council revealing for the fIrst time the meeting with the FAA in Texas. The memo also stated that the FAA stood by its original demand that Sunroad Enterprises comply with its order.

Today at a news conference the City Attorney released the documents to the news media, which include e-mails, Power Point presentations, and correspondence that show the Mayor's Office has made misrepresentations to the media and public: .

• March 2, 2007 letter from Mayor Sanders to San Diego County Regional Airport Authority Chainnan Alan Bersin requests "that the Airport Authority assist us in analyzing the situation and in working with the FAA and other interested stakeholders in an attempt to resolve this issue." (Item #1) (MORE) . Recent City Attorney media releases can be accessed on the San Diego City Attorney's home page located on the Internet at http://www,sandiegocityattorney,org

1200 Third Avenue, Suite 1620, Sau Diego, California 92101-4188 (619) 236-6220 Page 2

FACT: Almost a year earlier, on April 24, 2006, before the Sunroad Centrum I building was constructed to 180 feet, the FAA had alreally analyzed the situation and sent a notice stating the Sunroad building "is presumed to be a hazard to air navigation." The Mayor's Office was aware ofthis correspondence.

• March 12, 2007, letter from Bersin to Sanders, acknowledging the Mayor's letter "in which you request assistance from the San Diego County Regional Airport Authority to help resolve issues surrounding the Sunroad Enterprises building near Montgomery Field."..."The President/CEO of the Airport Authority, Thella Bowens, will assign our highest level executive with the necessary expertise on these issues to work with the City." (Item #2)

FACT: On June 7, 2007, the Mayor tells the news media that Sexton "was not brought on to manage the Sunroad building issue." (Item#3)

• May 18,2007, e-mail exchanges from Ted Sexton to FAA regarding his draft of"Hazardous Obstruction Elimination" which confirms FAA meeting on Tuesday, May 22 in Texas. (Item #4)

FACT: On the same day, the Mayor held a news conference infonning the news media that he had sent a letter to the FAA and the California Transportation Department regarding the Sunroad building, stating that the "City failed to stop work on the project and prevent the building from reaching 180 feet after it knew ofthe FAA's concerns..." The Mayor further states, "my staffhas put forward a proposal that will reduce the building height to 163 feet.. ..1 would encourage you to consider this proposal..." (Item #5)

)Mayor Jerry Sanders, however, failed to disclose that City staffand loaned executive Sexton were 4 days away from presenting to the FAA in Texas a flight modification proposal that Sunroad had been advocating.

In addition, the Mayor announced that the "City's ChiefOperating Officer, Retired Admiral Ronne Froman, wQuld conduct a thorough investigation into the permitting process for this project, including the City's reaction, or lack thereof, to your concerns regarding the 180 foot height" The Mayor, however, informed the media that he would not be investigating individuals, only the process.

The day before the Mayor's news conference, City Attorney Aguirre sent a May 17,2007, letter to Governor Schwarzenegger, asking him to request that the State Attorney General's Office intervene on the Sunroad matter. (Item #6)

(MORE)

Recent City Attorney media releases can be aooessed on the San Dlago City Attorney's home page located on the Internet at http://www.sannet.gov/city­ attorney

1200 Third Avenue, Suite 1620, San Diego, California 92101-4188 (619) 236-6220 Page 3

• May 19, 2007-May 31, 2007, e-mai1s from Thomas Kamman to Ted Sexton regarding "Drawings" related to Sunroad, stating "1 changed the height shown in Slide 9 to reflect the data shown on the Sunroad bni1ding drawings" as well as e-mai1s from Ted Sexton to FAA and Sunroad Officials. (Item #7)

FACT: Thomas Kamman is Senior Partner at Williams Aviation and is a consultant to Sunroad. The Mayor has never informed the public or news media that Sunroad officials have been involved in the presentation to the FAA.

• Documents presented to the FAA and reviewed by Sunroad Enterprises: (Item #8)

1) Power Point presentations made to the Federal Aviation Administration by City Staffand Ted Sexton . Air Navigation Hazard Elimination Proposal, Sunroad Centrum 12 Office Building Presented by Jim Barwick, Director, Real Estate Assets, City ofSan Diego Ted Sexton, Vice President, Regulated Operations, San Diego County Regional Airport Authority City ofSan Diego

2) Flight Safety Improvement at Montgomery Field Airport Prepared for: Office ofthe Mayor Prepared by: Real Estate Assets Department

3) Air Navigation Hazard Elimination Proposal Sunroad Centrum 12 Office Building San Diego, CA Presented to FAA Presented by: Jim Barwick, Director, Real Estate Assets, City ofSan Diego, CA Ted Sexton, Vice President, Regulated Operations, San Diego County Regional Airport Authority

• June 7, 2007, Mayor's Fact Sheet to the news media regarding the loaned executive program between the San Diego County Airport Authority and the City ofSan Diego. Fact Sheet states that Sexton "was not brought on board to manage the Sunroad bnilding issue." (See Item #3)

FACT: After the City Attorney released the loaned executive agreement to the news media, the Mayor held a news conference. Although, the Airport Authority had its attorney sign the agreement, the City Attorney, whose Charter duty is to review all City agreements and contracts, had not been told about the document, nor ever asked to review it. (Item #9)

(MORE)

Recent City Attorney media releases can be accessed on the San Diego City Attorney's home page located on the Internet at http://www.sannet.gov/city­ attorney

1200 Third Avenue, Snite 1620, San Diego, California 92101-4188 (619) 236-6220 Page 4

The Mayor knowingly withheld essential facts at this news conference. He never disclosed that a presentation had been made to the FAA by Ted Sexton and City Official Jim Barwick in Fort Worth, Texas on May 22, 2007 regarding flight pattern modifications and Snnroad Centrum I building modifications, as well as that the FAA had refused to support such a plan.

On Friday, June 1,2007, after a news article was published in the San Diego Union-Tribune regarding Snnroad Enterprises proposals to build another high-tower that violates FAA safety standards, the Mayor held a news conference denouncing Snnroad. (Item #10)

• June 11,2007, Mayor's memorandum to the City Council regarding the Centrum 12 Office Building Update. The memo states that Sexton and the Mayor's staffhad met with FAA officials to "discuss the various options that would be available to the City." In addition, the memo also reveals that the FAA "told the City's representatives that it would not support any intrusion into the airspace above 160 feet." The Mayor also claims that "Mr. Sexton was not brought on board to manage the Snnroad building issue." The letter also states that "the City Attorney was aware ofthe arrangement with the/Airport Authority. This issue was discussed at a Rules Committee meeting in early April at which Deputy City Attorney Catherine Bradley was present. No objection was raised at the meeting..." (Item #11) '.

FACT: ~ The Mayor's memorandum was released at the same time the City Attorney received the requested documents related to Sexton.

For the first time, the Mayor reveals in the letter that Sexton met with the FAA, but did not disclose the meeting was held in Texas.

The letter also reveals for the first time that the FAA refused the Mayor's proposals to change the flight path in order to accommodate Snnroad.

In addition, the Mayor never sought advice from the City Attorney's Office regarding the executive loan agreement that the City had entered into with the Airport Authority on April 1, 2007. The City Charter requires the City Attorney to review all agreements and contracts. Although, Airport Chairman Alan Bersin mentions the agreement at the Rules Committee meeting ofApril 11, 2007, it was never noticed on the agenda for discussion.

To view visit , click Montgomery Field Airport Safety Issues.

Recent City Attorney media releases can be accessed on the San Diego City Attorney's home page ioeated on the Internet at http://www.sannet.gov/city­ attorney

1200 Third Avenue, Suite 1620, San Diego, California 92101-4188 (619) 236-6220 Attachment 13 voiceofsandiego.org: Slop... Aguirre: Mayor's Corrupt Page 1 of8

HOME GOVERNMENT HOUSING EDUCATION ECONOMICS SPORTS IEI'J

S' S,m Diego Count:\/ Taxpayers Association -'c

Aguirre: Mayor's Corrupt Published: Thursday, June 7, 20072:51 PM 1 ~ PRII\JT 0 E-MAiL STORY ,~ S~-L Wow. So CityAttorney Mike Aguirre apparentlycalled MayorJerry Sanders "corrnpt" at a press conference earlie] ilieday.

I wasn't able to go. I assume iliere'llbe some news about it. But the press release forAguirre's event read as follow

CityAttorney Michael Aguirre will briefilie news media about ilie March 31, 2007Agreement betweenthe San Diego CountyRegional Airport-Auiliority andthe City ofSan Diego for Executive Loan ofServices ofAirportAniliorityEmployee Theodore (Ted) C. Sexton, which violates Section 40 ofilie San Diego City Charter. ~

The Charter provides iliatilie CityAttorney "prepare in writing all ordinances, resolutions, contracts, bonds, or other instruments in which the City is concerned, and to endorse on each approval ofilie form orcorrectness thereof..."

The agreement was prepared wiiliout the knowle~eofAguirre. However, theAirport-Auiliority's legal counsel's signature is on the document.

I had Called ilie Mayor's Office Tuesday trying to bait him into responding to related accusations byAguirre earlie: ilieweek. '

I just gotiliis e-mail from mayoral spokesman Fred Sainz (I'mjust going to publish it all):

Scott: , I hope this email finds you well. As Evan may have told you, Mike held a news conferencejust a little bit ago on the Sunroad issue and calledJerry "corrupt." We're not taking the bait. Jerrffeels strongly iliat he has to be ilie adult in ilie relationship and not allow the issue to degenerate into name calling. As I described to you earlierin the week, ilie mayor's relationship with Mike is analogous to ilie relationship between a parent and ilieir adolescent. The adolescent oftentimes makes statements tlIat are outrageous, inaccurate and hurtful. The parent has to maintain ilieir composure, not take ilie bait and remember iliat iliey are ilie adult. That's what we intend to do.

The entire purpose ofilie Aguirre news conference was to qnestion ilie Airport Auiliority's lending of Ted Sexton to ilie City. Ted was lent to us to help us determine wheilier or not ilie City should be in ilie airports business and wheilier ilie Airport Aliiliorifjr is better equipped to run our two airports. His responsibilities are articulated well in th" "ttadJe<1 <1oc:mll'c'nl.

http://www.voiceofsandiego.org/articles/2007/06/08/opinionislop/563corrupt060707.txt 1/27/2008 voiceofsandiego.org: Slop... Aguirre: Mayor's Corrupt Page 2 of8

Mike is stating that Sexton was brought to the City for the express purpose ofchanging the landing patterns at Montgomery to accomodate (sic) the Sunroad building. Nothing could be farther from the truth. There will be no change to those landing patterns. Jerry fully supports reducing the building in size to 160 feet.

I wantedyou to be aware ofthe issues athand here andwhatJerry said when he met with the press afterAguirre's news conference:

• Public safetyis my #1 priority;

• I will notbe satisfied until theSunroadbuilding is reduced in heightto 160 feet. The FAA has told us that they won't be satisfied until that happens and I stand bythem.

• I support the City's lawsuit against Sunroad.

• There will not be any alternative landing approaches at Montgomery Field. No one that broke the law should be accommodated. The status qno will remain in place until the building is rednced in size.

• As ofright now, planes only have to circle to the \lorth orthe south? of1% ofthe tinle - it's onlyin SantaAna conditions with lowcloud coverage. 99% ofthe tinle planes land from the east at Montgomery. That will continue.

• With regard to Mr. Sexton, he came here in late March to help the Citydetermine whether the City should be in the airports operation business. It mayverywell bethat the AirportAuthorityis better suitedto operate our 2 airports.

• As I have said, we are taking a look at everycityoperation andthis maybe a good example ofan operationthat maybe better offbeing done bysomeone otherthan the city.

• Loaned executives are a best practicein the public sector. The Cityis receiving Mr. Sexton's services for free.

• The CityAttorney was aware ofthis being the case. This issue was discussed at a Rules Committee meetillg in earlyApril. Mr. Aguirre's representative was there. Theysaidnothing and to date, we have not received anyletters from them objectillg to this practice.

• The City has had 3 loaned executives. It's a good thing. We getthe services ofvery competent professionals for free.

Thanks and let me knowifyou need anything else.

Fred

-- SCUTT LE wrs

Reader Feedback Comments al'e now displayed with the newestat the bottom. Not sure you're seeing all ofthe commenl Click here: . Refresh Comments

) Comments so far on this story:

- http://www.voiceofsandiego.org/articles/2007/06/08/opinion/slop/563corrupt060707.txt 1/27/2008 Attachment 14