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Carmel River photo courtesy of Leor Pantilat. For more on his work, see end of post

If Jason Burnett was injured during his political struggles in Carmel or his controversial efforts to promote the Cal Am desalination project, he hides his wounds well. On a recent Friday he seemed more relaxed than he had in years as he prepared to immerse himself in a project with no political or policy overtones. He carried a giant chainsaw in the back of his pickup and was heading off to slice a dead black walnut tree into slabs to be turned into furniture.

During a break from the morning’s discussion, he showed off cell phone photos of some of the pieces he had previously crafted from redwood and the Big Sur cabin that he had brought back to life. He was more relaxed than ever and smiling like he does when he his son is the topic. He talked about the trip his little family will make soon into the north woods in search of relaxation and trout.

Burnett, 39, spoke proudly of his extremely active role in the desalination project and says he doesn’t worry about the criticism he has received for working so closely with rapacious Cal Am, which in some quarters is seen as a corrupter of public policy on the Central Coast. The way Burnett sees it, if people understood what he and associates have accomplished, they’d be “celebrating instead of criticizing.”

Public-ownership advocate George Riley, the most knowledgeable water activist on the Peninsula, agrees that Burnett has made several important and positive contributions to the desal venture, jeopardizing his political standing in the process. But at the same time, Burnett as a leader of the mayors’ water authority, spent “gobs of public money” and “ignored all the other water costs piling up on the ratepayers,” Riley said.

Burnett is no longer mayor of Carmel. He chose not to run for re-election this year following a period of great contentiousness that saw several city employees cut loose, followed by sizable public protest and, finally, the very public departure of the city manager that Burnett and his City Council allies had installed. It was made worse by terribly lopsided coverage in the weekly newspaper, whose publisher had felt disrespected by the manager. Whatever the cause, it placed another large speed bump in the path of Burnett’s political career.

He remains involved in the desalination project, though not in an official role. While he was on the Carmel City Council, he helped form the Monterey Peninsula Regional Water Authority in order to give Peninsula mayors and residents some say in Cal Am’s tremendously controversial and equally expensive desalination venture. Now, at least when he’s not out fishing, he will serve as an unofficial adviser to the new president of the authority, Pacific Grove Mayor Bill Kampe.

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Burnett at the beach

“A few months from now I hope he won’t be needing any input from me,” Burnett said in an interview that jumped from desal to Carmel politics to his love of fly-fishing, something he learned from his father and grandfather, David Packard of computer fame.

Foolishly or courageously depending on how it turns out, Burnett did something no other Peninsula politician dared. He stuck his neck out and provided some local leadership for the desalination project. Monterey County Supervisor Dave Potter for years had been in the best position to assume that role by virtue of his membership on the Peninsula water management board, his past membership on the Coastal Commission and his numerous other associations. But when he did become involved, behind the scenes at the county level, the result was a nest of conflicting interests that unraveled the initial attempt at a desal plant for the Peninsula.

Though it has cost Burnett political capital locally, he jumped into the whirlpool with both feet and had some serious successes. Most importantly, considering the venture’s hefty pricetag, he helped create a bond-financing structure that reduces the project’s cost to Cal Am customers by 20 percent or more. He also helped create an oversight body that provides the public with a limited measure of scrutiny over the project, which is now penciled for completion in five years though the construction schedule has been and remains highly elastic.

But by becoming so closely involved in the project, and by working so closely with Cal Am, Burnett’s stock slid sharply in progressive circles over the past several years. He believes, without belaboring it, that his reputation has suffered unfairly simply because of the company’s reputation. Part of an international utility conglomerate, it has come under constant attack over the high and rising cost of its water locally, its general arrogance in dealing with its customers and its reliance on deceptive advertising to beat back a couple of efforts to start a public takeover of its local operations.

The company does have its allies, mostly in the hospitality industry, which fears great business losses if the desalination venture continues to sputter and the state makes good on its threat to severely cut the Peninsula’s use of Carmel River water. But Burnett seems unlikely to regain his political momentum unless and until a desal plant is up and running and running well.

As recently as five years ago, Burnett was seen as a likely replacement for U.S. Rep. Sam Farr, D-Carmel, the Central Coast’s longtime representative in Congress. Though he never said he was going for that seat, the troubles in Carmel and his association with desal put an end to that talk. Simultaneously, the Peninsula watched Jimmy Panetta’s star rise, making favorite son Leon Panetta’s actual son the odds on favorite to take over for Farr.

According to Burnett, the desalination project is being embraced elsewhere as “the most environmentally advanced desalination plant” despite the picture its local detractors have painted.

He ticked off the environmental pluses.

  • The slant-well technology, which has led to considerable controversy and delay, but Burnett says ongoing testing of the technology is proving to be a great success. The result will be a water intake process that causes relatively little harm to ocean life.
  • The appropriate size, big enough to help prevent water rationing but not big enough to promote additional development.
  • The locatio, one of the best possible along the bay, next to the Cemex plant north of Marina, which is no longer pristine and creates no habitat or erosion issues. It is also close enough to the Marina landfill to create the possibility of being powered by electricity produced by the burning of methane created at the waste site.
  • The $10 million plan to use underwater diffusers if necessary to disburse the brine if it accumulates at the bottom of the bay below the waste-water outflow.

“I’m really proud of what we have done,” Burnett said. “We will be able to demonstrate that we can do desal in an environmentally sensitive way.”

But what about the cost? Peninsula water customers will be paying well over $400 million for the plant, not counting various related costs, and that’s on top of Cal Am bills that already are some of the highest in the nation.

Certainly that’s a large concern, Burnett acknowledged, but the community has no choice but to move ahead because the alternative is to continue killing the Carmel River and the habitat it supports.

Burnett said he grew up fishing on the river and is motivated more than anything by a desire to preserve and restore it. In his view, continuing to drain the river in violation of state water policy would have been both illegal and unconscionable.

“If we had continued on the same trajectory, the steelhead would be dead. I think in the long run that it will be recognized that this was absolutely the right thing to do both for the ocean and the river.”

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George Riley

Riley, the leader of Public Water Now, gives Burnett high marks in several areas, especially his work to create a public governance committee that has some oversight powers over the process and, eventually, the actual operation of the plant.

Riley said Burnett “became enormously knowledgeable, more so than any non-water professional,” but may have taken too much credit for some of the progress. He said Dave Stoldt of the Monterey Peninsula Water Management District deserves serious credit for helping put together the bond package that will shave costs from the project and for the related ground water recovery program, along with Paul Sciuto of the Monterey Regional Water Pollution Control Agency.

So what’s next for Burnett, whose family money creates a long list of options? Before jumping into local politics, he was the managing partner of Clean Fund, an investment firm specializing in renewable energy projects, and before that he was associate deputy director of the U.S. Environmental Protection Agency, where he specialized in climate change and greenhouse gas issues.

If he has a plan, he wasn’t sharing it that day, though rumor has it that he’s likely to play some role in the Clinton presidential campaign. He mentioned only the upcoming fishing trip, and the retro trailer he plans to tow behind the truck, and said simply, “I’m going to take some time off.”

Proprietor’s note: Silicon Valley lawyer Leor Pantilat’s excellent blog, “Leor Pantilat’s Adventures,” includes this section on the Carmel River Gorge.

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MoneyADDITIONAL INFO IN POTTER SECTION BELOW

While so much attention is focused already on next year’s presidential election, a local campaign is quietly underway locally, the race for campaign money in Monterey County’s 4th Supervisorial District even though the primary is still nine months away.

In first place so far is the incumbent, Jane Parker, who had taken in $112,000 as of June 30, the end of the latest reporting period, but former Salinas mayor Dennis Donohue’s campaign treasury stood at a healthy $65,000 thanks to hefty contributions from the Salinas Valley ag industry.

Donohue, who works in produce, received $5,000 contributions from Fresh Foods of King City, Newstar Fresh Foods, Mann Packing, D’Arrigo Brothers, Gowan Seed Co., American Farms and other ag-related entities, the Nunes Co., A.C. Smith and Massa Trucking.

Donohue received a $1,000 contribution from his treasurer, accountant Warren Wayland, who serves as treasurer for many Republicans.

The ex-mayor’s largest contribution, $10,000, came from Taylor Fresh Foods. A related entity, Taylor Fresh Farms, just opened its headquarters building in downtown Salinas and is reported to have purchased several other buildings downtown with plans to renovate. While he was mayor, Donohue pressed for a downtown makeover. Expect him to criticize Parker for supporting a county decision to buy an office building on the outskirts and move some county workers outside the city center.

Parker’s largest contribution in the first half of the year, $20,000, came from Nancy Burnett, who is the mother of Carmel Mayor Jason Burnett and daughter of computer baron David Packard.

Parker received $10,500 from Brigitte Wasserman of Carmel, $9,748 from Constance Murray of Carmel Valley, $6,500 from Edwina Bent of Monterey, $6,000 from the Babcock Family Trust, $5,250 from Shirley Devol of Carmel Valley and Gordon Kauhenen of Union, Wash., $2,500 from Lisa Hoivik of Monterey and numerous smaller contributions.

While Parker’s district covers Marina, Seaside and a portion of Salinas, she receives considerable support from elsewhere because of her reputation as the lone progressive on the five-member board. She is routinely on the losing side of major development issues.

She did receive some significant contributions from ag interests, picking up $5,000 from Dennis Caprara of R.C. Farms and $5,000 more from Sea Mist Farms of Castroville.

In District 5, incumbent Dave Potter took in $54,000 in the first half of the year, and spent $21,000.

Potter is expected to receive a strong challenge from former United Way executive Mary Adams, who plans to announce her candidacy this fall. Former supervisor Marc Del Piero, who challenged Potter four years ago, also is believed to be considering another run. The district generally covers the Peninsula south of Seaside, Carmel Valley and much of the Highway 68 corridor.

Potter’s contributions came from several directions, including Pebble Beach homeowners, investors, and resort operators.

Potter played a key role in bringing the controversial Monterey Downs horse racing and development proposal to the Peninsula, but there were few obvious signs of support from the horse racing industry. He did pick up $1,000 from Chris Bardis, a key figure in the harness racing industry. Bardis once owned a share of the Los Alamitos racetrack and sat on the state racing commission. He reported receiving $1,000 from Double S.L. Ranch of Lafayette but little information is available about that entity.

Potter received $5,000 from Shanna Fineberg, an interior decorator from Dallas, and the same amount from venture capitalist Jon Q. Reynolds of Piedmont. He received $1,000 contributions from the owners of Quail Lodge, Carmel Valley Ranch, Bernardus Lodge, Folktale Winery and Old Fisherman’s Grotto.

Steve Foster, owner of the Lucky Strike chain of bowling alley/nightclub operations gave $2,000 and the Monterey County Hospitality Association gave $500.

One $1,000 contribution of interest came from Sanford Edward, whose large Dana Point Headlands project went before the Coastal Commission while Potter was a member. The highly controversial Orange County project was approved by the commission on a 7-5 vote with Potter on the dissenting side.

Potter received a contribution of $1,000 from cotton tycoon Sam Reeves, who is fighting an application by a Pebble Beach neighbor to enlarge his home, a decision that will be made by county officials.

In the other district with an election next year, District 1 in Salinas, incumbent Fernando Armenta and his expected challenger, Salinas City Councilman Tony Barrera, haven’t reported any contributions so far.

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STATE HAS MADE CAL AM DESAL PROJECT A TEST CASE

OFFICIAL IN CHARGE OF EIR WAS PROJECT’S FIRST CHEERLEADER

TIME PRESSURE GIVES OFFICIALS EXCUSE TO CUT CORNERS

To hear some people tell it, one of the big problems facing Cal Am’s desalination project in Marina is criticism from those concerned about the environmental and economic impacts. Project supporters go so far as to blame the critics for the various delays that have forced repeated changes in the pre-construction timetable.

But after following the process closely for a decade now, after being counseled interminably by project proponents and reading environmental impact reports, feasibility studies and all manner of other paperwork, I have come to the opposite conclusion. I believe one of the venture’s biggest problems is that it has too much support. By that, I mean that agencies that should be honestly evaluating the project are advocating for it instead, leading to lapses in judgment and errors in execution. Peninsula business interests, meanwhile, panicked by the threat of water cutbacks, have taken a full-speed-ahead posture that could help produce a flawed and incredibly expensive answer to a problem that has other solutions.

When a previous incarnation of the desal project fell apart, it wasn’t because naysayers had put up too many obstacles. Key factors in its demise were a politically awkward management structure and the fact that money was being passed under the table in an effort to advance the project, not destroy it.

Now, proponents and participants in the project have proved again to be their own worst enemies, first by making overly optimistic projections about the composition of the water to be desalted and by ignoring glaring conflicts of interest built into the process of testing the water at the plant site north of Marina.

In defense, those in charge cite the heavy deadline pressure, with the state threatening to force untenable cuts in the Peninsula’s use of Carmel River water. They say time is so tight that they must push on or else the Peninsula’s economic well being will be in grave danger. Such thinking plays right into the hands of Cal Am, of course, which makes its money no matter how many times it has to start over.

When I was opinion page editor of the Monterey Herald, we came out in favor of desalination because of the shortage of practical alternatives. We were one of the first entities in the community to voice support. I now feel that the alternatives are becoming more attractive and that the project in its current configuration presents even graver danger to the well being of Cal Am customers on the Peninsula, who will be forced to pay for it no matter how expensive it becomes—even if it never produces a drop of drinkable water.

PENINSULA PLANT COULD BE A MODEL, FOR A PRICE

Creating additional pressures and costs, the state is using the project to test its preferred water-intake technology with minimal compensation to the Peninsula. As it stands, Peninsula water customers will be required to cover millions and millions of dollars in expenses regardless of whether the test is a success. Remember when Cal Am and its supporters were breathlessly arguing that testing of the intake method needed to begin as soon as possible, and that anyone who said otherwise was an obstructionist? That testing is on hold now for reasons that informed and objective observers could have seen coming, and the money meter continues to spin.

Carmel Mayor Jason Burnett, an almost full-time participant in the desalination process as chair of the Peninsula mayors’ water authority, agrees that the financial burden created by the experiment should be shared by state taxpayers, and he indicated he is working on it.

Tap drippingEven now, while the testing and environmental impact review are both stalled, Cal Am is going after yet another set of rate increases to help pay for the plant that may never be built and to offset income it has lost because its Peninsula customers have done such a good job of conserving water. Residential customers, who already consume and conserve some of the most expensive water in the state, would see rates increase by 29 percent under a request Cal Am filed last week with the Public Utilities Commission. At the same time, businesses would see a rate reduction of some 14 percent even though some business interests already pay discounted rates in what amounts to a reward for supporting the desal project.

Cal Am’s ability to obtain rate increase after increase from the PUC helps explain why the utility is comfortable doing whatever the state wants, no matter how illogical or expensive. In the cost-plus world of utility accounting, bigger expenses mean bigger profits.

PENINSULA IS A DESAL GUINEA PIG IN A COSTLY EXPERIMENT

Few people quarrel with the need for a desalination plant or some other means of stretching the Peninsula’s water supply. We have nearly destroyed the Carmel River, our primary water source. State officials were correct to issue a cease and desist order that will require Cal Am to greatly reduce pumping from the river in stages, which local officials are desperately attempting to postpone until the plant comes online.

Compounding the challenge significantly, the project has become an important test case that will help decide what type of water intake should be employed by other desalination facilities now on the drawing boards up and down the state.

They make it sound super complicated. It isn’t. It is worth your attention if only because it will help you understand the latest conflict of interest issue that has thrown a wrench into the process.

The easiest and least expensive intake is known as open ocean, which means pumping water straight from the ocean. The problem is that all manner of marine life is pumped into the plant along with the salty water.

Environmental groups and the various regulatory agencies greatly prefer the idea of subsurface intake, which involves pumping from below the ocean floor, using the sand and other sediment as filters to protect aquatic life. In the best case from an environmental standpoint, the wells would be drilled some distance from the shore and slanted so that their intakes would extend below the ocean floor.

Unfortunately, there is some guesswork involved in deciding exactly where to drill the so-called slant wells and there are few successful examples.  Cal Am’s project presents the state with one of the largest and most meaningful tests of the slant well technology so far.

Racks of filters in a desalination plantAlso unfortunately, not everyone involved in the project has the same agenda, and the state apparently ignored some well-established principles of how public works projects should be organized and assessed.

Perhaps the best way to illustrate that is to examine the shifting roles of the man now in charge of preparing the all-important environmental impact report for the current project. That’s Eric Zigas of the San Francisco firm of Environmental Science Associates.

Zigas may be a familiar name to those who have followed the desalination follies from the start. He also one of the architects of the previous incarnation of the desalination project–the version that devolved into a web of litigation. Before that he was a key part of the Public Utilities Commission team that decided desalination was the best solution to the Peninsula’s water problem.

PROJECT’S CHIEF ENVIRONMENTAL MONITOR STARTED WITH A VERY DIFFERENT ROLE

The current desalination proposal grew out of what became known as Plan B after plans for a dam on the Carmel River fell apart. The Legislature put the Public Utilities Commission in charge of finding an alternative and Zigas was hired to help draft the plan. He teamed with officials at UC Santa Cruz and various state and local agencies to help craft an ambitious scheme for a desalination plant at Moss Landing with a long list of environmental amenities such as a garbage-powered energy supply. The PUC then assigned Zigas to tout the plan to various Peninsula business groups, service clubs, news outlets and others. He effectively helped sell the community on desalination.

But for various reasons, most of the bells and whistles were later removed from the plan, and the project became a cumbersome joint venture between Cal Am, Monterey County and the Marina Coast Water District. Despite Zigas’ earlier role as the official cheerleader for the project, his firm was hired by the PUC to prepare the environmental impact report on that proposal before other factors caused it to be shelved.

Today, Zigas leads the environmental analysis of the process he helped initiate. Those who have worked with him say his experience on the Peninsula gives him unmatched knowledge of the issues involved, which are many. The project is complex, including a plant processing countless gallons of sea water, disposing tons of brine, and dispatching fresh water through a new network of pipelines. The expectation, of course, is that the analysis will be scientific and unbiased. A draft of the EIR is now circulating and the technical community now examining the document will determine whether has Zigas successfully switched hats. Considering how much controversy the process has created, the final EIR is very likely to be tested in court.

(When the first draft of the official environmental impact report incorrectly concluded that there were no functional agricultural wells near the plant site, Zigas briefly defended his team’s work before adopting a no-comment stance. )

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Eric Zigas

Zigas isn’t talking to the press, at least not to the Partisan, and he hasn’t publicly addressed his role in the latest delays.

The EIR process has been pushed back a few months because of a conflict created by the involvement of a firm that holds a patent on the slant-well technology. To help assess the test well, Zigas’ firm had brought in a company called Geoscience, headed by noted hydrologist Dennis Williams. In addition to the potential conflict presented by his patent, Williams also was working for Cal Am on the same project.

The PUC’s project manager, Andrew Barnsdale, was reassigned last week because of the revelations, which were brought to light by project critics. At the same time, a PUC administrative law judge, Gary Weatherford, issued a lengthy order requiring ESA and Cal Am to provide the contracts of everyone involved and to explain the degree to which the testing process may have been tainted.

It should not be forgotten that the Geoscience situation surfaced after the Coastal Commission suspended pumping at the test site last month because the well apparently was taking in more fresh water than anticipated. After the testing began, the groundwater table started dropping, which Cal Am blamed on agricultural pumping though it had insisted previously that there was no agricultural pumping in the area. Critics of the project had nothing to do with that.

GEORGE AND JASON LOOK AT PROJECT FROM DIFFERENT PERSPECRTIVES

George Riley has followed the project’s process as closely as anyone, and has a unique perspective. While he is an activist and head of a group that advocates public takeover of Cal Am, he also has been an accredited participant in the PUC processes as well as a member of a technical advisory committee advising Peninsula mayors on desal matters.

He agrees that the process has been marred by inter-connections.

“A quiet alliance of advocates, appearing as specialists, has emerged,” he said by email. “All are also quietly supported by the ruling state agencies. The ruling water elites at the state level have a greater role here, and has not been discussed.  And Monterey Peninsula as guinea pig is useful for them.”

Riley said Zigas and Environmental Science Associates do deserve credit, both for helping get the well testing process on track after Cal Am’s dawdling had worsened the time crunch and for pushing for well testing data to be included in the environmental impact report. The idea, Riley said, is for the final EIR to become “the vehicle for tooting the horns for slant wells” strongly favored by the various state agencies.

In Riley’s view, the fumbles that have marred the process would not be so worrisome if the state was helping to pay for the slant well testing and if the state would do more to encourage competing proposals that possibly could address the Peninsula’s water needs more quickly and less expensively.

Burnett, in a telephone interview Saturday, said he supports the PUC’s decision to call a brief timeout over the patent issue and examine where things went wrong with the test well team. He said it is important now to view Geoscience as a “proponent” rather than an arms-length analyst.

But Burnett disagrees that the process is fundamentally flawed or that the project’s management structure should be overhauled. He said he has great faith in Weatherford, the administrative law judge who is reviewing the testing conflicts.

(Burnett, by the way, has taken quite a beating politically in some quarters for his role as a leading advocate for such a controversial project. His detractors should be reminded that he helped  create a financing package for the plant that should save ratepayers millions of dollars over time and managed almost single-handedly to impose some level of public oversight over the project despite serious resistance from Cal Am.)

Antique water fountain, detail of a source for drinking water, drinking waterSUCCESS SHOULDN’T REQUIRE SETTLING FOR SECOND-RATE

From where I sit, it seems clear that the PUC needs to do more than study the known conflicts and then continue on the same course if this project is to be salvaged. Soonest, it needs to join with local politicians and work with the State Water Resources Control Board to eliminate the artificial pressure caused by the cease-and-desist order deadlines before they result in a hopelessly flawed and expensive project.

Barnsdale, the now departed PUC project manager, is a bureaucrat, a permit processor, not a construction or desalination expert. His replacement needs to be someone with real world experience rather than a purely regulatory background.

The PUC also needs to do what it can to support alternative measures such as wastewater recycling and stepped up conservation and to take a closer look at the competing proposals, the Moss Landing plans being pursued by Nader Agha and the DeepWater group, to see if they could effectively supplant some or all of the Cal Am project.

Obviously, the PUC also needs to take a long look at Cal Am’s rate structure for the Peninsula and drill into the company’s argument for two classes of rates, one set for the relatively helpless residential customers and a discounted set for the more politically powerful business class.

Finally, Cal Am and its supporters need to stop attempting to vilify anyone who raises questions about the process. All major public works projects encounter problems and this one is  more complex than most. Clearly, outside scrutiny will make it stronger, not weaker. As a community, there is strong agreement that we are obligated to stop abusing the Carmel River and unless someone works some magic and soon, we seem to be stuck with desal as the solution. That does not mean, however, that we must accept a project that carries a bloated pricetag and creates as many problems as it solves.

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Though the caption says this is Royal Calkins, it isn’t. It’s Paul Miller being interviewed on KSBW about media issues. For the record, Calkins is better looking.

Despite its down home name, the Carmel Pine Cone cultivates an image as an aggressive little newspaper, vigilantly protecting the public’s interest in open government. For the better part of two years, it waged weekly battle against Carmel City Administrator Jason Stilwell, accusing him of stealthily campaigning to eliminate conscientious city employees for inexplicable reasons and trying to cover his tracks by rejecting legitimate requests for public information.

That impression was severely undermined, however, by a report from the Monterey County grand jury two weeks ago. Defying most expectations, the grand jury found that the weekly paper had essentially manufactured crisis in City Hall through one-sided reporting, creating the community pressure that led Mayor Jason Burnett and the City Council to cut Stilwell loose last fall even though almost everything he had done was at their direction.

The grand jury found that Stilwell’s personnel actions were logical and legal and that the city’s decision to reinstate several of the employees after his departure was at least partly the result of political panic sparked by the news coverage.

Through it all, the Pine Cone portrayed Stilwell as a rogue outsider and itself as the hometown watchdog motivated only by a yearning for good governance and comity of the type it had enjoyed with previous administrators. The impression was turned on its head, however, by the grand jury’s findings, some of which are fleshed out by this week’s release of a series of text messages between the Pine Cone and the mayor while all that drama was playing out at City Hall.

The messages released in response to public records requests indicate that despite all its huffing and puffing, the newspaper enjoyed an uncommonly cozy relationship with previous administrations at City Hall and with Burnett even after Stilwell’s arrival. Even while Pine Cone Publisher Paul Miller clashed angrily and openly with Stilwell, the messages showed that Burnett regularly sought Miller’s counsel on parking and political issues and that the two routinely coordinated their efforts in support of California American Water’s desalination project.

The new texts, coupled with earlier correspondence between Miller and Stilwell, also indicate that Miller heaped praise on the mayor and offered him the ability to weigh in on the gist and tone of some news stories.

“You are working so hard and doing such a great job you certainly should have another term in office,” Miller told the mayor in one undated message. “But it wouldn’t surprise me if you didn’t want to. The city is lucky to have you.”

Interested in more? Here’s a link to a Royal Calkins column from 2013 about the early stages of the Miller/Stilwell relationship. A highlight: “You are a rookie in Carmel and you should respect what I have to say.”

The newspaper and its fan base have expressed great displeasure with the grand jury report although the paper, like the daily Monterey Herald, has provided almost no details on its substance. Though the grand jury delved much more deeply into city politics and functionality than anyone had expected, Miller and associates dismiss its detailed report as flawed but they have failed to provide any real examples of its supposed shortcomings. An editorial in today’s Pine Cone says the report has zero credibility but includes nothing to back up that opinion.

Regardless of what spin is being put on the report, the messages lend support to that old advice about not believing everything you read.

For instance, the top story in the Nov. 29, 2013, edition provided significant new information about Carmel’s investigation into city employees receiving unauthorized pay raises and providing sensitive information to outsiders, an investigation that Stilwell started and that would help lead to his downfall. The details were mostly supplied by Burnett, and most readers likely came away with the impression that the newspaper had pried them out of the mayor.

A different picture arises, however, from the text messages. For instance, in a text to Burnett three days before reporter Mary Schley’s story appeared atop page 1, Miller thanked the mayor for briefing the paper and added, “I’ll keep a very sharp eye on Mary’s story to make sure nothing is in there that you didn’t intend to be in there.”

Similarly, the messages put a different light on a story a month earlier about an unsuccessful legal effort by the paper to require the city to turn over the resume’ of the city’s new planning director. In that story, the paper patted itself on the back for its aggressiveness, and included some posturing from Miller.

“(I)t’s important to remember that government officials cannot be trusted to decide on their own what the public is allowed to see,” Miller was quoted as saying. But in a message to Burnett shortly before the article appeared, he wrote, “I completely rewrote the top six graphs of Kelly’s story. Can I go over them with you to make sure I have it right?”

The text messages were released by the city this week in response to public records requests filed by someone identifying himself only as Marshall Duncan, likely an alias of Stilwell, who resigned under great political pressure last fall. The messages cover the period starting with Stilwell’s hiring in early 2013 and ending this May. He is now working as a deputy city manager in Santa Maria and has declined to comment on the grand jury report that has rewritten recent Carmel political history.

Many of the text messages involve arrangements for meetings and briefings involving Burnett and either Miller or reporter Schley. In one message, Schley suggests that Burnett may want to stop having her tag along to private meetings in the interest of promoting candor. In a message to Miller, Burnett suggests that a City Council retreat might have been more effective if Schley had not been there because some city officials weren’t fully forthcoming in her presence.

Miller replied, “I you want to have council retreats without a reporter being there, you should let me know. I don’t see anything wrong with it specially if it would help council members speak freely once in a while.”

The texts contain references to efforts by Burnett to arrange conciliatory conversation between Miller and the administrator but there were no signs of success. At one point, Miller wrote to Burnett “Stilwell is so strange I’m actually afraid to talk to the guy.”

Later, he continued, “The only answer is for Stilwell to reinvent himself as a human being. Since he couldn’t do that even if he wanted to we’ll just have to suffer until he leaves. And then it will take 10 years to undo the damage.”

Burnett, bound by a non-disparagement clause in Stilwell’s departure agreement, has said little about the matter publicly but he did say after release of the grand jury report that he felt he had been deceived by Stilwell about the processing of some of the terminations.

To critics who say he put Stilwell into harm’s way and then threw him under the bus, Burnett said this week, “I supported him as long as I could.”

Oddly, Miller didn’t hold Burnett responsible for any of the difficulties he encountered at City Hall, at least according to the messages. They contained repeated references to private meetings between Burnett and Schley and coffee shop sessions between Burnett and Miller on topics including parking meters and the drought. In one message, Burnett said he wanted to discuss his re-election plans with Miller. After Stilwell’s departure, Burnett messaged Miller to suggest he meet with a candidate to replace the administrator.

Miller is a former broadcast journalist who has had unusual financial success at the helm of a small-town publication. His paper is thick with both advertising and news, most of it decidedly local. With the Herald largely abandoning coverage of city governments locally, the Pine Cone has had the Carmel market mostly to itself. Miller has used his pulpit on the editorial page, and elsewhere at times, to bash environmentalists and bureaucrats and boost California American Water at every opportunity. In editorials, he has accused the Herald of publishing “lies” in an attempt to thwart Cal Am’s desalination project but he has not provided specifics.

At times, he has used his editorials as a battering ram. When a Pine Cone article on teaching salaries prompted a letter of complaint from a local teacher, Miller called her incompetent and worse while severely mischaracterizing and misquoting her letter even though it was published in the same edition. When former Carmel City Councilman Steve Hillyard spoke up in defense of Stilwell after the administrator’s departure, Miller responded with a highly loaded news story and an entire editorial criticizing Hillyard. In it, Miller added an unsubstantiated charge of nepotism onto the list of Stilwell’s purported sins. In a text to Burnett, Miller asked, “Is Hillyard stupid?” Burnett’s response was not recorded.

Hillyard did not respond to the Partisan’s calls for comment.

 The text messages between the newspaper and the mayor hardly paint a complete picture of that relationship but they do indicate a surprising level of cordiality during such seemingly tense times.

Miller and Burnett were united in opposition to Measure O, the June 2014 ballot measure that would have launched a public takeover of California American Water’s local operations. Burnett has taken the political lead in Cal Am’s effort to build a desalination plant to serve the Peninsula.

Shortly before Measure O’s defeat, Miller sought some advice from Burnett.

“When do you think my next, and probably final, No on O editorial should run?” he asked.

Next week, Burnett replied.

Burnett, young, ambitious and rich through his family, the Packards of Silicon Valley fame, seemingly has hitched his political career to the desalination issue. On the plus side, he has demonstrated both leadership skills and a willingness to take a risk in the volatile arena of water politics, something that other area politicians have avoided. It has won him heavy support from the hospitality industry while costing huge points among environmentalists and others who are concerned about the costs to the consumer. Those are points he likely could win back, though, if the many obstacles to a desalination project can be overcome

Asked how he might reassure supporters put off by his role as a Cal Am booster in league with Miller, he said, “Our efforts to find a new sustainable water supply are, at their core, about stopping the illegal pumping of the Carmel River and restoring the habitat. I’m proud to have had a role in bringing together diverse interests to help solve the water problem in an environmentally responsible manner. We have groups representing major portions of the environmental, business and farming communities all supporting the same path forward. Our project is being held out by environmental groups across in the state as how to best pursue desalination; conservation first, subsurface intake, care regarding brine discharge and possibly landfill gas to power the pumps.”

In another text message exchange with Miller, the mayor cheerfully reported that a judge had ruled in favor of Cal Am on a key issue involving test wells, ruling against the Ag Land Trust and the Marina Coast Water District, both of which had sought to delay the testing.

What’s next, Miller wanted to know.

“Now we need to change the dynamics on their boards so they stop wasting everyone’s time and money,” Burnett replied.

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The Monterey County civil grand jury has rewritten the script on the controversy that has consumed Carmel City Hall in recent years. Its recommendation, essentially, is to forget most of what you thought you knew about it, particularly the parts you read in the Carmel Pine Cone.

The old script, written largely by the weekly paper, had now-departed City Administrator Jason Stilwell bungling his job by arrogantly and even illegally dismissing solid employees before a grassroots community uprising drove him from office.

The new script, backed up by personnel records and interviews with numerous City Hall insiders past and present, portrays Stilwell as a highly competent if imperfect administrator operating at the direction of a mayor and City Council that wanted to eliminate the cronyism that had flourished under the former mayor, Sue McCloud.

In a remarkably detailed and wide-ranging report released Friday, the grand jury found that Stilwell operated professionally and legally but was cut loose for purely political reasons when the newspaper, a vigorous booster of the McCloud administration, began a series of lopsided articles taking up the cases of city employees who, for the most part, had been appropriately terminated.

3d people - man, person and directional sign.True or falseThe grand jury paints City Hall under McCloud as a monument to her power with few checks and balances. Though Carmel employs a city administrator, technically making the mayor little more than president of the City Council, the grand jury found that McCloud essentially functioned as the chief executive with often unquestioned authority. As a result, city employees and many of those on the council never learned their proper roles and felt unable to challenge McCloud, a retired CIA agent.

After young Jason Burnett succeeded McCloud as mayor in April 2011, Stilwell was assigned to modernize government functions. His task was greatly compromised by short-staffed departments, years of informal decision-making processes and a public that knew little about City Hall except what it read in a newspaper openly disdainful of the new administration, the grand jury concluded.

Rather than provide Stilwell with the support he needed to carry out the council’s wishes, “the actions of the mayor and City Council appeared to place more importance on avoiding public criticism, unfavorable media exposure and the threat of litigation than on conscientious oversight and governance,” the jurors concluded.

To a large extent, the jury continued, Stilwell’s departure last October was driven by news coverage that “heightened or escalated local concern by echoing the one-sided viewpoints of terminated employees since the city was prohibited by law from disclosing its reasons for terminations.”

One example was a long Pine Cone piece trumpeting the military and municipal experience of the city’s longtime building official who had been terminated by Stilwell. The article complained that he had been unfairly dismissed despite years of strong service, “and the city won’t even say why.” The implication was that the city was being unfair to the employee by not making the grounds public and even that the city might not have informed the employee. The fact of the matter, fully known to Pine Cone publisher and editor Paul Miller, was that the city was legally prohibited from disclosing its basis for termination.

Burnett denied Saturday that he had felt pressured by the news coverage. He argued that the administrator had brought on his own troubles by not following proper personnel procedures while claiming otherwise internally.

Specifically, Burnett said, Stilwell falsely claimed to have used “progressive discipline” before terminating employees. That refers to the practice of warning employees about substandard performance and following that with corrective action and discipline of increasing seriousness before any termination. “I was deceived,” the mayor said.

Although not legally required, progressive discipline has become standard practice in most bureaucracies. Unfortunately for someone attempting to reshape an organization quickly, as Stilwell was expected to do, it can be a slow process made more difficult when an institution has little history of documenting employee transgressions.

“We did not have the full picture,” Burnett continued. “That came to us subsequent to the resignation” of Stilwell.” The grand jury, he added, did not have access to complete information.

Burnett added that several of the recommendations from the grand jury have already been put into place.

The grand jury report says that by not following formal disciplinary and termination procedures of the type used by most government agencies, Stilwell provided the departed employees obvious grounds for litigation. The grand jury concluded the processes he followed were appropriate but that they also created drama that might have been avoided.

Stilwell, who has been hired as deputy city manager in Santa Maria, could not be reached to comment Saturday. Miller, who nominated his City Hall reporter for a Pultizer Prize, did not respond to an emailed request for a response.

Through the courts, the grand jury received highly unusual access to city personnel files, allowing it access not available to the Pine Cone or others. On several subjects, however, the jury received limited information because city officials including City Attorney Don Freeman declined to waive attorney-client confidentiality.

Despite some limitations on its access, the grand jury performed an unusually detailed, seven-month inquiry into the city’s hiring and firing practices, its contracting procedures and other areas. Its report asserts, among other things, that security procedures for the city’s computer system are horribly deficient and need to be revamped immediately.

The grand jury also reported, with little detail, that a 150-page forensic audit of the information technology operation, costing more than $383,000 and pointing out some 800 security issues, has disappeared.

The report portrays Jason Stilwell as a victim of the crony system that existed when he was hired in 2011 and a victim as well of a largely untrained and naïve administration that came into power after McCloud’s departure. Its numerous findings undoubtedly will be spun widely, and even wildly.

It seems unlikely that the Pine Cone will object to its portrayal as a civic shot-caller if not a bully, but it undoubtedly will seek to diminish the findings, positioning it as a somewhat unlikely ally of Burnett. Burnett’s political ambitions have suffered because of the turmoil surrounding Stilwell’s rise and fall and the grand jury findings could amount to an even larger blow.  Longtime City Attorney Don Freeman, who performs the same role in Seaside, is portrayed as surprisingly distant from the governance and even the legal issues of the city, so some no doubt will question why he remains in office.

The grand jury started its inquiry in late 2014 at the request of city residents alarmed by word-of-mouth complaints from City Hall veterans and what they had read in the Pine Cone. Some asserted that City Hall was in meltdown, that employees were being treated unfairly and that Stilwell’s administration was ignoring public records requests in order to mask his failings.

With tensions growing rapidly, Burnett and the council joined in the request for grand jury investigation into the adequacy of internal controls and the effectiveness of recent corrective actions.

The grand jury says it reviewed the city code, state law on municipal governance, minutes of all council meetings from January 2012 to November 2014, significant correspondence, city contracts, attorney agreements and billings, newspaper articles, investigative reports, court records, employee emails, and records obtained via subpoena

Interviews were conducted with 24 people including past and present city officials but City Attorney Freeman and private counsel told some of the subjects not to answer questions involving personnel matters.

Unavailable to the grand jury was the 150-page audit report, commissioned by the city in 2013, into the city’s information technology system, an inquiry that also touched on a criminal investigation into allegations that the city’s former information technology chief, Steve McInchak, had illegally accessed employee emails and other off-limits materials. The grand jury report says the audit report, listing more than 800 vulnerabilities within the city’s computer system, could not be found.

The grand jury report provides some new background in that area. It says Stilwell discovered that computer security was almost nonexistent and that several employees reported that their computerized files and emails had been viewed without their permission.

The lost audit report found that security updates for the computer system had lagged seriously, the city’s networks were accessible via wi-fi to passersby, and many computers were not password protected

A subsequent investigation found that some employees had gained unauthorized access to the city’s system from home. Among the information obtained were police payroll matters, personnel documents including medical records, and performance appraisals.

This week the city announced it would pay $275,000 to the widow of McInchak, who died of a heart attack while on leave from his position as informational technology director. His family had contended he was unfairly kept under lengthy suspension during the criminal investigation into computer security issues, an investigation that failed to result in any criminal charges.

The grand jury says it also was hampered by the city’s refusal to waive attorney-client confidentiality in some areas. Through a laborious courtroom process, the grand jury was, however, able to review a considerable number of personnel files that generally would be deemed off limits.

The report says, “Although the city has not fully cooperated in providing information that would conclusively corroborate certain of the findings, the (grand jury) nevertheless believes that this report is accurate and complete.”

The following summarizes the jury’s findings and should be attributed to the report issued this week:

Until as recently as 2011, the City Hall staff was collegial but city business was conducted “in a quietly unorthodox manner. Many city policies were outdated, ignored, or didn’t exist,” especially in the areas of finance, personnel and administration.

City Council members from that era lacked a clear understanding of their roles and the roles of the mayor and the city administrator.

“City Council members also consistently explained that they had had no authority regarding the actions of the city staff, despite the fact that the Carmel Municipal Code clearly cites the city council’s supervisory responsibility over the city administrator, city attorney, city engineer and city treasurer.

“None could explain why the treasurer was not involved in the tracking of contract disbursements, a chronically troublesome area.”

Former City Administrator Rich Guillen left the city in 2011 and was replaced by Stilwell, who had considerable local government experience, mostly in Santa Barbara County. A little over a year later, he hired an assistant of sorts, former colleague Susan Paul, who had 30 years experience in city government elsewhere. Though the Pine Cone repeatedly attacked Stilwell for hiring Paul, the grand jury found that she was hired through a competitive process in which he did not participate.

As instructed by the council, Stilwell and Paul dug into the way things were being done. They discovered “compliance violations, mishandling of contracts and payments, human resource issues, network security breaches, and other procedurally deficient activities.”

They “also uncovered employee behavior that they judged to be improper or dishonest, that put the city at risk, or that was a misuse of the city’s resources for personal gain. Such behavior was dealt with swiftly by Ms. Paul, sometimes resulting in terminations, or in suspensions followed by terminations.”

The jury credits Stilwell and Paul for aggressively dealing with problems but mentions a couple of trouble spots. They seldom made use of “progressive discipline,” and Stilwell, despite his technical skills, was not as adept at communicating, failing to recognize the power of the longtime culture at City Hall. And Paul, meanwhile, could be loud and blunt.

Structural defects they inherited continued to cause technical and professional difficulties as they were trying to correct problems, and the flurry of personnel actions led to time-consuming litigation and media attention.

Unfortunately for Stilwell, the mayor and City Council largely failed to provide oversight or guidance during this difficult period, the report concludes.

“And when the public pressure to remove Mr. Stilwell and Ms. Paul and to rehire previously terminated employees became overbearing, it appeared that the mayor and City Council chose public appeasement over problem solving.”

The grand jury found that, before Stilwell’s arrival, raises were granted without proper approvals and employees without experience or training were assigned to personnel functions. Missing from city records were explanations for discipline.

After Stilwell’s arrival, six employees were terminated and one was placed on indefinite leave. Two people resigned.

“Some employment terminations were preceded by a period of administrative suspensions with pay; others were done swiftly. All of the terminations occurred after extensive review by, and with advice from, outside legal counsel, hired at significant expense to the city by Mr. Stilwell.”

Managers had sought some of those terminations years earlier.

“When Ms. Paul arrived, personnel actions moved to the front burner and, with the endorsement of outside counsel, went forward.

“Although the Carmel Municipal Code has a discretionary progressive discipline process, according to witnesses this process was largely unused either before or after 2012. … The city administrator has the exclusive authority to administer employee discipline, including terminations, and the City Council has the right of inquiry into these matters before they are made final. Several witnesses reported that the mayor and City Council were made well aware of the circumstances surrounding these termination issues. However, most council members erroneously believed that an inquiry into these employee matters was not permitted until a termination was complete and litigation was threatened or filed against the city.

“Most suspensions, terminations, and resignations during this period were made public by articles in the local media (primarily the Carmel Pine Cone). As noted earlier, only the employees’ versions of the acts or omissions leading to the adverse employment actions were reported, since the city was restrained by law from reporting the employer’s side to the local media concerning any individual employment matter. This one-sided reporting was instrumental in defining the public perception that most of the involved employees were treated unfairly and that the city was losing valuable talent and ‘institutional knowledge.’”

The grand jury concluded that the employee conduct that led to terminations “violated commonly accepted employment standards and/or specific provisions of the CarmelMunicipal Code. The terminations and suspensions that followed took place with the assistance of counsel and followed an appropriate process.”

The grand jury reported serious concerns about the rehiring of some of the employees following Stilwell’s departure. Three were hired with back pay, retroactive benefits and damage payments.

“In at least one case, the salary at rehire was significantly higher than the new position would otherwise warrant.”

The misimpression created by the rehiring was that the employees had been wrongfully terminated and were victims of the “Stilwell/Paul administration.”

“That conclusion indicates (in the jury’s opinion) a desire to quell political unrest rather than address serious employment issues.”

An issue repeatedly addressed by the Pine Cone was the city’s response to public records requests.

The jury found that until late 2011, after Burnett became mayor, there was no process for logging requests or recording the information provided. There was no formal procedure for determining whether something was public information.

Stilwell established procedures but eventually was overwhelmed by requests as controversy grew over his tenure.

“As the threat of legal actions grew, requests swelled to the point where a timely response was almost impossible. Outside counsel and other advisers were brought in to assess and edit requests and relieve city staff of the additional workload.”

The grand jury made 21 findings. The first six apply to the time before Stilwell was hired and, for the most part, before Burnett was mayor.

FINDINGS

  1. City operations were undisciplined, as policies were outdated, nonexistent or ignored. Employees worked hard to keep up and paid little attention to standard municipal procedures
  2. There were serious flaws and vulnerabilities in network system security, placing the city at risk financially and legally.
  3. Contracts were mismanaged with regard to public bidding, purchase order processing, and services provided with expired contracts.
  4. The City Council was not provided with contract payment schedules or accumulated payment tracking reports.
  5. The Human Resources process was mismanaged with regard to pay grades, progressive discipline, and proper staff training, and was lacking in leadership.
  6. The Public Records Act request process was unstructured, noncompliant, and ad hoc.
  7. The mayor and City Council did not fully execute their responsibilities of inquiry and oversight.
  8. Neither the mayor nor the City Council members received any formal training or substantive orientation on the responsibilities of their positions.
  9. The mayor and the City Council members were more responsive to political pressure than to the need for effective governance.
  10. Stilwell was a well-qualified city administrator who recognized and diligently addressed widespread city management problems and tried to implement shifting City Council priorities, maintaining a professional attitude in spite of external pressure and criticism. “He may have avoided much of the upheaval surrounding his administration by having a clearer perception of the nature of small-town government and exercising a more thoughtful and measured approach to change.”
  11. Paul quickly recognized areas of mismanagement and risk and implemented solutions within what she understood to be her areas of authority with due diligence and proper municipal procedure but “her  decisive by-the-book actions and abrupt manner caused resentment among longtime employees and city residents.”
  12. There was no credible evidence to support allegations of contract splitting, cronyism or any other wrongdoing under Stilwell or Paul.
  13. The general law/weak mayor structure was often misunderstood by Carmel citizens and the City Council.
  14. The local media provided easy access for city employees to vent their side of a story when the city’s hands were tied.
  15. The governance and administration of the city is unduly influenced by the reportorial and editorial practices of the Pine Cone.
  16. The position of city treasurer is underutilized and so provides little benefit to the city.
  17. The treasurer was isolated from any meaningful role in the contract/invoice disbursements and tracking system.
  18. There was no evidence of any systematic review of contracts in excess of $25,000 by legal counsel as to form or content.
  19. A significant amount of money is spent on outside counsel as it supplements the city attorney position in numerous matters including but not limited to labor and employment concerns, public records requests, general business and facilities, joint powers agreements, municipal law, and miscellaneous lawsuits.
  20. Historical averages of amounts spent on outside legal services over the past five years would support a full-time city attorney and staff.
  21. The City Council seriously failed to exercise its power of inquiry in its decision-making process regarding rehires, by excluding the city’s outside defense counsel from the process and by negotiating hasty settlements of claims in the early or pre-litigation stages, which precluded any meaningful scrutiny of these employment issues.

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Which Rob Lowe? If the actor runs for Congress out of Santa Barbara, as some Republicans hope, he wouldn’t be the liberal Rob Lowe from The West Wing but instead would be the libertarian Rob Lowe from Montecito

Congressman Sam Farr, although he has made no noise about retiring, won’t be in Congress forever. And when he does exit, Central Coast residents can expect a crowded field of wannabe House members to throw their hats — though no one wears hats much any more — into the race.

There will be a throng, not unlike the two-round, special 1993 election that Farr won to succeed Leon Panetta, who left Congress to become President Clinton’s budget chief.

That year, Farr and 26 other candidates lined up in a wide-open primary field, which included 11 Democrats vying for their party nomination. Because of the district’s heavily Democratic makeup, Farr really won the seat by besting the 10 other Dems in the special primary.

Farr went on to beat Republican Bill McCampbell by 10 percentage points in the runoff election and has cruised to easy re-elections since. That likely will keep happening until Farr decides to hang it up — despite the flurry of publicity being enjoyed by first-term Pacific Grove Councilwoman Casey Lucius for merely thinking about taking on Farr under the GOP banner.

Central Coast residents can get a sense of how the political gusher will gush when Farr retires  — Jimmy Panneta, Bill Monning, how many others? — by looking down the coast toward Santa Barbara.

Longtime Democrat Rep. Lois Capps said this week she won’t run for re-election next year, and the number of possible candidates is already approaching the number of oil rigs in the Santa Barbara Channel.

Capps’ 24th District is different than Farr’s 20th District. Democrats only hold a slight edge in the district that runs from Paso Robles to Santa Barbara. That makes the 2016 race even more wide open, for both Democrats and Republicans, than an open race in the 20th. Here’s an early take on what will be a very competitive race from Dan Walters of the Sacramento Bee.

Absent from that list is one of the 24th’s most famous residents and current darling among some Republicans — actor Rob Lowe, who resides in Montecito. Though Lowe’s only political experience was as a fictional Democratic White House aide on the TV show “The West Wing,” some conservatives are hoping he runs next year for the U.S. Senate seat being vacated by Democrat Barbara Boxer.

If Lowe decides to be the latest actor-turned-politician  in California, Lowe shouldn’t suffer for lack of name recognition. Until this month, he and several inferior alter egos were featured in a curious series of elitist TV commercials for DirecTV.

Lowe makes his bones on the libertarian side of the Republican tent. He’s for individualism over big government, except for big-ticket items, presumably like Pentagon budgets.

But he may have to convince voters he isn’t the Rob Lowe who peaked, not in high school like in the TV ads, but as Sam Seaborn, urbane and liberal policy wonk on “The West Wing.”

And, of course, there was the notorious video of Lowe having sex with two young women he met in an Atlanta club on the eve of the 1988 Democratic National Convention. With today’s GOP electorate, the sex tape may not mean as much as what Lowe was doing at the DNC — campaigning for eventual Democratic nominee Michael Dukakis.

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500_F_53293135_27J85jZn71YPw8YyiI93FVhmRFHQ1gFuThe following is a letter from Bill Hood to the Monterey County grand jury, which is looking into the personnel actions and other issues that have rocked Carmel City Hall in recent months. Hood lives in Carmel and is a former executive director of the Association of Monterey Bay Area Governments.

I am a former full-time resident of Carmel, and currently live on the Peninsula as a part-time resident.  I am a semi-retired member of the California Bar and follow closely the actions of local government agencies, including the city of Carmel.   I have spoken out, both personally and in the media, about issues relating to lack of leadership relative to realization of a reliable water supply, transparency in decision-making, and prudent management of public funds.

This past week, an article appeared in the Carmel Pine Cone calling for an immediate response to the grand jury, given the fact that the above-referenced investigation is currently underway.   I respectfully request that this letter be distributed to the jury members and staff, and that it be incorporated as part of the record that is being compiled during the investigation.

The Pine Cone article states that Mayor Jason Burnett sent a letter in November  2014 requesting the grand jury to “review our organization, our corrective action and make any additional recommendations.”   While his request, taken out of context, would seem to be a prudent action, when considered within the context of the history of Jason Stilwell’s time as city administrator, it is very telling, indeed.

Mr. Burnett’s letter and the request therein can only be interpreted as a too-late attempt to cover the fact of his and his council members’ continuing failure to exercise any reasonable level of oversight in the face of numerous actions taken by Stilwell and his senior staff that would have raised red flags to even the casual observer.

While I am focusing on the belief that those involved negligently failed in their official responsibilities, the possibility exists that the actions of Stilwell and some of his staff were actually in response to direct orders to do so.  If that is found to be the case, then negligence, while still unacceptable, would  not be involved, and the level of breach of the public trust would become more serious.

Interestingly, when the string of Stilwell decisions first became public knowledge, and in spite of the immediate concern and indignation that arose in the community, Mr. Burnett’s first reaction was to praise Stilwell.   And, importantly, the mayor’s request, in looking to the future by asking for “recommendations,” ignores the past.   Past failures in responsibility that actually caused harm to others, and which are proven by your investigation, clearly cannot be overlooked.   Such failures demand appropriate and relevant responses that are not confined to “Yes, you made a mistake; we are not going to punish you, but will simply tell you what not to do in the future.”

Recommendations for future corrective action are necessary, but it would be a whitewash to completely allow harmful actions already taken to get by with a slap-on-the wrist and no more.  The “corrective actions” to which Mr. Burnett refers are a valid request, but, once again, on their face they ignore any responsibility for all of the time in which prior harmful actions took place, but no “corrective actions” (“oversight,”  from my perspective) were to be found.

For example, Burnett, the council and the city attorney apparently sat idly by while undeserving staffers were fired by Stilwell’s assistants, out-of-area consultants were hired and paid exorbitant amounts, rubber-stamped by those who were elected or appointed to protect the public trust.  To the extent they looked the other way or asked no questions regarding Mr. Stilwell’s questionable actions and the results that flowed from them during the time when they took place, the mayor, council members, and even the city attorney abdicated their responsibilities, and by doing so, violated that trust.

Some have told me that the city attorney was deliberately kept out of the loop with respect to much of what Stilwell did.   That may be true.  But, in his capacity as city attorney, I would have hoped that person would have immediately realized that reality, and spoken up as to what his position should expect of him.

As an attorney who has served as in-house counsel for several major corporations and government agencies, I did not need to be told that my responsibilities included primary involvement in the careful selection and ongoing management of outside counsel.   And, with respect to both lawyers and other consultants, I routinely reviewed contracts and other legal documents binding my clients for legal accuracy and to ensure that questionable or detrimental provisions were properly addressed.

Under Stilwell’s tenure, available information seems to indicate that the city attorney was not asked to undertake that important role or that he did not exercise his own initiative to demand that he do so.  It is once again very telling that, this late in the game, he has been asked to go back and review and evaluate contracts entered into by Stilwell with respect to consultants and law firms.   A normal and necessary procedure would be for an in-house counsel (which the city attorney is for the city) to review communications and billing documents from outside counsel on a regular basis as part of hands-on oversight.  If the city attorney failed to do so, for reasons not his fault, then the mayor and council should assume responsibility for their failure in not requiring him and Stilwell to follow that procedure on every occasion.

Their collective failure to do this has, in part, led to the situation that has triggered your investigation.

Therefore, I respectfully request that your investigation:

  1. identify all  persons within the city’s governmental structure who had any element of responsibility for Stilwell and/or his staff’s actions that resulted in harm, but failed to do anything about them; or, in the alternative, specifically directed Stilwell and/or his staff to undertake those same actions;
  2. describe, to the greatest extent possible, the harm suffered by individuals targeted by the foregoing actions that caused the harm;
  3. take into account the harm caused to the greater Carmel community and to the city’s reputation as a result of the foregoing actions; and
  4. recommend corrective actions not only to prevent future recurrence of such failures, but also as to appropriate sanctions that should be levied upon those found guilty of any failures so identified.

In addition, in order for the investigation and its conclusions and recommendation to be acceptable and relevant, it must be undertaken in a completely objective and fair manner, with respect not only to those who may be targets of the investigation, but also to the public, which has already suffered harm as a result of the events that transpired.

Thank you for your time and consideration.

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Peninsula people who aren’t sure that desalination is the cure to the region’s water troubles are indebted to Del Rey Oaks Mayor Jerry Edelen. That’s because he makes no secret of one of the goals that will be in play when officialdom works to merge two local water agencies.

In a recent interview with the Carmel Pine Cone, Edelen said it is his hope that adding five appointed city representatives to the board of the Monterey Peninsula Water Management District would reduce the influence of conservationists, slow growthers who are concerned about the potential development-inducing impact of a large desalination project.

Referring to the district’s existing board, Edelen said, “There are not enough votes representing the folks who need the water. For too many years, the water management district was run by those who did not want growth.”

ManEdelen is a member of another body made up of the mayors of the six Peninsula cities. It is called the Monterey Peninsula Regional Water Authority, which was formed largely to advance Cal Am Water’s current proposal for a regional desalination plant. The mayors’ group is under increasing financial and political pressure to essentially wrap up its work, most likely by merging with the Peninsula Water Management District.

The Peninsula Water Management District was formed to promote conservation and seek additional water resources after the state ordered Cal Am in 1994 to reduce its reliance on the Carmel River. The water management district is governed by a board made up of five elected directors and two appointees representing the cities and the county. Each election turns into a contest between development-minded candidates and more environmentalist candidates, with each side essentially taking turns holding the majority.

While the water management district has led conservation efforts and has had success with aquifer storage projects, it is constantly accused of failing to produce any significant additional supply. Voters rejected an early effort to dam the river and Cal Am has made little real progress toward a desalination solution.

Meanwhile, the relatively new mayors’ group has been working closely with Cal Am to attempt to expedite that process while simultaneously controlling desalination costs and adding public oversight. With Cal Am’s venture encountering delay after delay, the mayors’ group sustained a blow politically and financially earlier this month when the county Board of Supervisors expressed steep reservations about formally signing on to the mayors’ group and continuing to help finance its work.

Representatives of the mayors’ group, led by Carmel’s Jason Burnett, are working on a plan to amend its shape and possibly its mission. At the mayors’ Oct. 9 meeting, Edelen proposed merging the group and its functions into the Monterey Peninsula Water Management District. He said the resulting body would have more influence and greater efficiency. Edelen said the idea he is pitching, diluting the power of the environmentalists by altering the shape of the district board, originated with longtime board member Dave Pendergrass, mayor of Sand City.

In an editorial, the Pine Cone strongly supported the idea.

“Not long ago, you see, the water board … was dominated by environmental extremists who wanted nothing built, and they were willing to go so far to achieve this goal that they willfully stopped any new water from being developed,” the paper opined. “Horrible, yes, but true.”

“We think the mayors’ proposal is a good one, and we welcome a new era in land-use planning based on good public policy, not roadblock extremism.

The machinations come about while the Peninsula is under strong state pressure to step degrading the Carmel River and develop additional supplies. More than two decades after ordering reduced pumping, the state is now threatening to impose dramatic reductions starting in 2016 even though it is beyond obvious that construction of a desal plant could not even begin then much less reach completion. Burnett and other area officials are scheduled to meet with state representatives next months to plead for more time. Among their principal arguments is that reductions could cripple the hotel industry and other local commerce.

Conservationists and the growing number of Cal Am critics aren’t convinced that desalination is the answer, largely because it is a hugely expensive process that would inflate Peninsula water bills, already among the highest anywhere. They are pushing alternatives such as additional conservation, additional storage and reclamation of wastewater.

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500_F_29758468_l9QixsSx8YdGJXteaQQYqGL70OmarU0SIt’s a good idea to have Monterey County represented on the mayors’ water authority. The agency’s main role is to push for a desalination plant to help ease the water shortage and to help oversee its construction and operation. Without county representation, residents of unincorporated areas of the Peninsula would have almost no say in the process.

It would not be a good idea, however, to have county Supervisor Dave Potter represent the county as planned. As ideas go, that’s a bad one, a very bad one, a no-good, rotten, horrible, what-are-they-thinking type of idea. It’s like using the wrong tool, painting your house the wrong color, or hiring a plumber to fix your car.

Even under considerable pressure from the state, getting a desalination plant built is proving to be a huge challenge for local officialdom. It’s complicated, controversial and costly. It doesn’t help that the leading players in the process are California American Water and the California Public Utilities Commission, two entities with public approval ratings about on par with the Kardashians.

Among the problems with Potter is that he could have been the public official who led the Peninsula toward a water solution years ago but never really tried. He was in the perfect position. He has been on the Board of Supervisors for more than a decade. He simultaneously served on both the California Coastal Commission and the Monterey Peninsula Water Management District, two key players in the water world. Instead, Potter played a low-key but important role in actually derailing the previous effort to build a desal plant. Cal Am’s initial effort was getting nowhere fast when it completely crashed and burned after it was discovered that Monterey County’s official delegate to the process, Steve Collins, was being paid under the table by the project engineer. Collins says Potter and Supervisor Lou Calcagno engineered and approved his actions. They deny that, of course, but there’s little doubt in the public’s mind that neither of the supervisors has been forthcoming about what they did and when they did it.

In the court of public opinion, Potter has pleaded ignorance. Many students of local governance don’t buy it. Potter gets deeply involved in most issues of importance. If he was as uninvolved as he claims to have been in round one of the desalination process, he was derelict. If he was as involved as he should have been, he knew what Collins was up to.

Potter is a remarkably intelligent and crafty politician who has flirted with serious financial and legal issues throughout his career. He has been on the wrong end of several personal lawsuits, and he needed to turn to rather mysterious financing to avoid bankruptcy. His former wife once alleged he had forged her name to paperwork for a second mortgage on a house he had purchased from the family of a development lawyer. He brought us the hugely controversial Monterey Downs racetrack proposal. That he has remained in good standing with voters is testimony to his considerable political skills or the public’s forgetfulness.

It is true that of the five county supervisors, Potter is the most knowledgeable about desalination. That is not necessarily a good thing, however.

One of the biggest obstacles to successful completion of Cal Am’s current desalination plan is public skepticism, both about Cal Am’s ability to carry it off and about the price tag. The failed process previously and the current one have been start-and-stop affairs. Some of that is natural because the list of regulatory agencies involved is monumental, but the constant delays also have raised questions about Cal Am’s ability and even its commitment. While the process stretches on, Cal Am merrily collects considerable profits from the Carmel River water it sells to Peninsula residents, and it is virtually guaranteed to be repaid for every expense attributed to the desalination effort, every expense plus a 10-percent profit.

Potter’s appointment to the authority board would not reduce the skepticism one ounce. In fact, it would add considerable unnecessary weight. His motives and allegiances would be questioned at every turn.

At the moment, county officials are awaiting an opinion from the state Attorney General’s Office on whether Potter or other county officials would have a conflict of interest. There is considerable litigation swirling around the players in the desalination arena, and the county is heavily involved in all that. But letting an AG’s opinion be the decider would be the worst kind of cop-out. Potter may not have a conflict in the narrow legal sense in that none of the participants in the process is likely to wire money directly into his bank account or stuff cash into his pockets, but he could hardly be more conflicted.

Potter’s wife is a hotel executive and the local hotel industry is Cal Am’s biggest supporter on various water issues. Potter had a highly publicized legal dispute with one of Cal Am’s potential desalination competitors, Nader Agha, after soliciting him for an unorthodox and essentially illegal campaign contribution. Another potential competitor is represented by local public relations kingpin David Armanasco, whose interests usually mesh with Potter’s. Among other things, Armanasco negotiated the out-of-court settlement that prevented details of the Potter-Agha matter from becoming public.

So what should the county do? It is considering paying its share of past expenses for the mayors’ authority and becoming a dues-paying member, complete with representation on the authority board. Potter already is a member of the authority’s governance committee, but it remains possible that he could be removed before any permanent harm occurs.

Calcagno is out as the county’s representative. He leaves office at the start of the year and one of the first questions about any property proposed for desalination purposes is whether Calcagno owns it.

Supervisors Fernando Armenta and Simon Salinas are out as well. Armenta has absolutely no standing on the Peninsula, and Salinas, despite being a former state legislator, has shown no inclination to study Peninsula issues.

That leaves Jane Parker, which is a very good thing.

Now that Potter has become a full-time champion of development interests, Parker is THE environmentalist of the board. Her critics in the hospitality industry and at the chamber of commerce would violently oppose her involvement, which would represent yet another mistake on their part.

Parker is indeed close with environmental interests who fear that a large desalination plant would be growth inducing. She, therefore, could not be counted on to be a gung ho, no-questions-asked supporter of the current process. Which means that project advocates would need to convince her of the worthiness of their decisions. Which means that, unlike Potter’s assent, Parker’s approval would have meaning. If funny business were to break out as it did in the first attempt, Potter would likely be an accomplice. Parker would be the first to point out the problem.

Though there is good reason to worry about the necessity, expense and viability of desalinated water, there also is good reason for this project to continue. If there is not a confluence of additional conservation and other smaller projects that combine to ease our water woes, desalination could in fact be the key to preventing a state-ordered cutback in water usage, a cutback that could devastate the Peninsula’s economy. It is a solution with a long list of harmful side effects, but for the most part those who oppose it are those whose livelihoods are not dependent on an  adequate water supply.

Too much has gone wrong with the process and there are too many unanswered questions to warrant full support at this point. The principals need to step it up. But if the process is to proceed, if it is to have any hope of gaining the public support it needs to prove worthwhile, Potter should be on the sidelines and Parker should be in the thick of things.

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