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City Ordered to pay back $11.6 Million or else

By   /   October 15, 2012  /   13 Comments

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The City of 29 Palms has once again screwed the pooch. The state is demanding that they return the proceeds of the Project Phoenix bonds immediately.


The California Department of Finance for the 8th and final time has told the City of Twentynine Palms NO to Project Phoenix in a letter dated October 7th 2012. It is the worst possible answer.


OK folks did you read the above? Do you understand that the State of California in its Sovereign role, said not only No to Project Phoenix, but No to the transfer of the Bond Proceeds and demands that they be returned to the successor agency.

The letter suggests that if the City continues to follow its present course that the State Board of Equalization will pull ALL USE TAX AND PROPERTY TAX ALLOCATIONS, respectively, to the City if the Agency fails to recover the Bond Funds from the City. In other words the City better get its ducks in a row or the state is going to put them out of business.

We told you this would happen some months ago. I know the City Council is used to listening to the likes of City Manager Warne and City Attorney Munoz for legal advice but they better get a second opinion real damned quick, because these guys are dragging the City down to bankruptcy.

We see the next move by the City Manager and City Attorney is to ask the City Council to file suit against the State of California.

If the City of Twentynine Palms files suit against the State, as suggested by the letter from DoF, all tax allocations will cease. The City has about $9 Million in their rainy day fund. This will fund the city for about a year. The State holds all the cards. The State will put the City’s suit not only on the back burner but behind the stove. Here the Golden Rule applies, the State will wait the City out. The city will run out of money before it ever gets to court. Munoz knows the drill, he has used it on more than a few of us in town.

This is a huge turn of events folks. If we continue to seek the counsel of the City Manager and City Attorney along with RSG we are sure to be bankrupt by the end of the next fiscal year. Our Council would have been better off never receiving counsel from these guys and just followed the States recommendations. We are now hopelessly in a 30 year debt spiral that will keep our city the backwater burg that this bunch has made us.

If we do not stop right now and follow the instructions of the Department of Finance and make right the wrongs that have been done in the name of 29 Palms, the Department will put the city out of business. This is not an idle threat. This is for real.

Its going to be hard to explain this kind of FUBAR.





Twentynine_Palms_ROPS_III (1)

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About the author

Dan OBrien


Cactus Thorns has been online in one form or the other since 2001. What started as a personal blog documenting the corruption and lack of Due Process of the 29 Palms Community Development Department has turned into over these many years into a hugely popular Independent Alternative News Media Outlet. We have partnered with other media including The Desert Star Weekly, Joshua Tree Star, other blogs, indie media and an incredible staff of volunteer Reporters, Commentators and Opinion Makers to create one of the most read, honest and dependable alternative to the Local traditional Media services in the country. Thanks to you the reader we are in the 5% of most read sites in the World.


  1. Dan is correct. Manager Warne and City Attorney Munoz are incapable of further advising the City on these matters. They both have conflicting interest.

    Best to seek outside council ASAP.

  2. Dan OBrien Dan OBrien says:

    These fellows wanted to spend almost a half a million dollars on fiverlous bull shit at a meeting just two days after this letter. They said nothing to the public. It is a complete disconnect with reality and scofflaw. This letter has been out for more than a week… The city Manager has covered it up and hid it from the Public.

    Someone needs to answer the Questions, What did they know, and when did they know it?

    This is the single worst outcome one could have ever imagined. The city is now $30 million in the Red, The lawyers have ran off with millions in both fees and commissions, and the People are left holding the bag…

    To add insult to injury the State has added to the ROPS an additional $10k to pay for our own State audit. Did you get that folks? Our City is being audited for improper use of tax dollars…. This horrible. We are the laughing stock of the entire State.

    It is time to tell the City Manager and City Attorney their services are no longer needed.

    I do not know how we are going to dig ourselves out of this. I would suggest that we consider suing Rutan and Tucker, RSG and the bond companies for fraudulently indebting our community on false pretense… They knew this was a risky proposition yet our city attorney and his bond buddies gave glowing yet false advice. It was a dumb, stupid, idiotic scam that had no chance of working, yet the City Manager conspired with the City Attorney to steal from the city tax increment to the benefit of a few cronies for the next 30 years.

    This should come out of the pockets of Rutan and Tucker, and RSG. I hope they have insurance.

    A special meeting needs to be held ASAP… Heads need to roll.

    • Mark Clemons Mark Clemons says:

      Well well, who’d a thought it, the city staff and council blew 30+ million! Dan I would go further than firing the two greedy bastards, time to fire the whole G D city.
      What would be the savings; after all so much of what little our crooked little city does is a duplication of county services at a great expense to the citizens. I mean when we have a city manager that makes what governors make there is something askew. Add to that the authoritarian mentality of the code interpretation by the BLANKITY BLANK PC AND THEIR BLANKITY BLANK ENFORCER (that was for you cary) we would have much more wholesome community without the city. Shucks I bet in the county it is legal to work on you own cooler, we need that freedom along with our freedom to build businesses and prosper.
      I guess there are many on the local tax tit that have been on the receiving end, most of us in the private sector have struggled trying to do business in the city. They the authoritarianism city will spend big bucks just to make sure 29 does not have a swap meet, like it would do 29 great harm to have a swap meet inside a drive in theater, it is just crazy to keep traveling down a path to bankruptcy.
      You would think that with the city slush fund (RDA) gone they would be reaching out to those that would and could increase their revenue stream by bringing business to 29.

  3. Two important issues:

    (i) This completely abolishes the MYTH that you have to pay a very large salary to public officials — to wit, city managers — to get the most experienced an capable individual to to the job. This MYTH has been a source of aggravation for me for years. It draws more riffraff to feed at the public trough, and to further their own agenda and self-enrichment.

    (ii) A. Patrick Munoz and Rutan and Tucker need to have a California Bar Complaint filed against them, respectively, for an ethics violation for conflict of interest. I have looked into this and believe I do not have standing since I live outside city limits.

    Can the City Council kindly proffer some accountability, and show some genuine leadership. If these people were in your employment, would you keep them on the payroll? Dammit show some leadership!

    FYI — I’m researching a story to support my allegations that Richard Warne and A. Patrick Munoz have conflicts of interest that go outside the parameters of representing the City.

  4. Paparrazi Paparrazi says:

    Well we know what they say about paybacks. Papa thinks somebody gunna lose a job. What did i say last election?
    Throw the bums out.

  5. Frank Kofka Newto29 says:

    I had just a quick questions about the letter.

    Who are Nichelle Thomas, Susana Medina Jackson and Steve Szalay?

    And who signed the letter for Steve Szalay?

    I noticed that he was not the one that signed the letter.

    • Dan OBrien Dan OBrien says:

      I think who they are is self evident.

      As for who signed the letter…. How do you determine who signed the letter?…. do you have a signature of Szalay on hand to compare? And then what would be the significance of the signature signed under the authority of Szalay?

      I am at a loss to see where you are going with this.

      7 times before the answer has been no. We have plenty of State Bureaucrats that have signed on to the fact that Project Phoenix is a NO GO… Lets not devolve into questioning the authorized signatures? What are you guys waiting for? A signature from Jerry Brown Himself?

      Where are you going with that thought line??

  6. Frank Kofka Newto29 says:

    If you look close there is a scrawl then the word for written.

    Where I am going is that if when I read the news paper and it says that when the city talked to Steve Szalay and he said he never knew about our issues with the bonds then maybe, just maybe, Steve Szalay would never had sent that particular letter out. As he had not reviewed what the city had given him yet.

    • Dan OBrien Dan OBrien says:

      And then again that could be a pipedream created in a fellows imagination in hopes that it didn’t say what it said…… What are your odds it is an authorized letter from DoF sent with the full knowledge and concurrence of all parties at Dof including Szalay? Authorized signatories has been legal and accepted practice since the Egyptian Scribes….

      NO we checked with the signatory and concluded that it was correct and authorized signature…. For gods sakes he read the letter over the phone to one of our reporters. Come on…. the decision is the final decision… The city had their Meet and Confer in September at the tune of $8,700 of jack off money. They said they were waiting for an answer and they got the answer on October the 7th… What more do they have to have? ARe they going to play chicken with the State of California for 11.6 Million Dollars?

      Do you think the State can not go into that bank account the city holds the money and seize it? If you do not believe that then you’ve never had a tax problem with the state…. They make the IRS look like pussies.

    • Steve Spear Steve Spear says:


      I do not know who you are but if you work for the city in any shape or form god help us all.

      There is more than enough lunacy in dealing with the present cadre at city hall without the new theory of it is not really signed by the right guy – jeesh!

      • Frank Kofka Newto29 says:

        No, I am just one for details. I attempt to be as accurate and correct as possible. If it is my opinion then I say so. If I have details and facts I present them.

        Something a former CO impressed upon me, as he wanted the facts before the bullshit and your honest opinion whether or not it might be unpopular.

  7. Cora Heiser Cora Heiser says:

    Ok when you think it can’t get any weirder, some city head is saying this letter is forged? Plleeeaaasssee

  8. Carey Alderson Carey Alderson says:

    Frank it makes no difference who signed the letter. I would think that the city has made sure that the DOF has reviewed what was given them to date.

    And in your defense, good eye. I had to look and see that yes, someone that works for Mr. Szalay signed the letter for him.

    I would remind those that read here. Read what was is written carefully. I do not see that at any point Frank implied that the signature was forged, invalid, or even wrong. I think he just wanted to see if anyone else was paying attention.

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