OK, Salem's IrriGate scandal isn't Watergate quality, and I'm no Woodward or Bernstein, but this tale of crony capitalism and special-interest deal making at City Hall still is fascinating to dig into and report on.
Following up on Tracy Loew's initial reporting in a Statesman Journal story about how a City of Salem advisory committee voted to recommend that Creekside Golf Course get a $60,000 water rate break, a fellow citizen activist has shared some juicy tidbits with me about how this potential $600,000 giveaway to Creekside and other large irrigators came about.
(The outrage is magnified by the fact that ordinary water users will have their rates raised to pay for the $600,000 irrigator rate reduction if it is approved by the Salem City Council.)
Below is a transcript this person made of part of the audio recording of the July 14 meeting of the City's Water/Wastewater Task Force. The twelve members include four Salem city councilors: Brad Nanke, Chair; Warren Bednarz; Chuck Bennett; and Jim Lewis.
Peter Fernandez, the Public Works Director, tells the committee that he met with Steve McCoid, another city councilor, prior to the Task Force meeting. In this "pre-meeting," McCoid came up with another option for giving the Creekside Golf Course a water rate reduction.
McCoid lives in the Creekside development, and is a member of the golf course.
So McCoid's action raises ethical issues, considering that he is lobbying for a rate cut intended to help the golf course stay open, which both helps McCoid continue to play golf right next door, and also would help his home's property value -- since the golf course is an amenity for the Creekside neighborhood where he lives.
Here's what Fernandez told the Task Force at its July 14 meeting. I've boldfaced key parts of what Fernandez said.
Fernandez: I want to preface by saying that we did lay out some options. This is an issue that came to us really two years ago about the issues relating to the irrigation rate specifically related to the issues out at Creekside. We promised that we would look at it. We’ve laid out the options here. All options have pluses and minuses.
There is one additional piece of information. Councilor McCoid is the Council President and resident at Creekside and member of the [Golf] Club [and] is very interested in this issue. So we had a pre-meeting with him so we could fill him in.
He’s not allowed in the room because then we’d have a quorum. So he’d love to be here but we told him, no no you gotta go. But he came up … in discussing it he [McCoid] came up with another option, we conceptualized another option, where we perhaps just lower the irrigation rate, the commodity rate a little bit, or some amount, and that actually is an idea beyond these options that actually has legs and we think it might be a very good way to go to address issues, so Deb will talk about that in the sheets, but I just wanna, in the interest of full disclosure, we did some brainstorming — we may have something.
Now, here's what's galling to those of us who value transparency in governmental decision-making.
City staff had prepared discussion papers for issues that the Task Force was going to discuss at the July 14 meeting and subsequent meetings. "Irrigation Cost Relief Options" was item A. I've made a PDF file of just the meeting agenda and this discussion paper. See:
The Public Works Department staff analysis obviously was prepared prior to the meeting. Also, prior to the pre-meeting Public Works Director Fernandez had with City Councilor McCoid. Only four possible options were listed for "the requested outcome of reducing the cost of irrigation water either to all customers or specifically to Creekside Golf Course."
(1) Eliminate the Irrigation Classification and reclassify all accounts to a lower-cost classification.
(2) Reclassify Creekside Golf Course as commercial.
(3) Create a Golf Course classification with a reduced irrigation rate.
(4) Maintain the current classification system for now.
The staff analysis (again, prepared prior to the meeting) didn't recommend any specific option, simply saying that the Task Force should choose one to be the preferred alternative for financial planning and rate proposal development.
But the minutes of the July 14 meeting that were included in a July 28 meeting packet reveal that McCoid's pre-meeting with Fernandez led to a hitherto undisclosed Option #5 being unanimously chosen by the task force for further examination. See:
Download WWWTF 072816 Full Packet
This option was sprung upon the Task Force on the spot by Fernandez, after his sitdown with Creekside Golf Course member McCoid. It maintains the current classification system and reduces the irrigation rate.
The "Irrigation Cost Relief Options" were edited after the meeting to include Option #5. There's an Estimated Impacts section, and a Considerations section. Of course, at the July 14 meeting where Option #5 was selected by the Task Force, this information wasn't part of the staff analysis.
Fernandez admitted that Option #5 was brought up by Councilor McCoid just prior to the Task Force meeting. "So what's the big deal?" you might be thinking.
Well, one big deal is that a city councilor who isn't a member of the Task Force, but who lives in the Creekside neighborhood and is a member of the Creekside Golf Course, lobbied the Public Works Director just prior to the Water/Wastewater Task Force meeting to add another option to the four irrigator rate options that City staff had come up with.
But to my mind, an equally large or larger big deal is what Peter Fernandez publicly said on an August 18 KYKN talk show hosted by Gator Gaynor.
Fernandez and Gaynor talked about the water rate reduction for Creekside and other irrigators. Public Works Director Fernandez spins how this Option #5 reduction recommendation came to be in a highly misleading manner. Here's a transcript I made of the last part of the interview excerpt that was sent to me by my fellow citizen activist. Click on the audio file to hear the interview excerpt.
Download Peter Fernandez 8:18:16
I've added my comments about what Fernandez says in red.
Fernandez: We looked at some of the changes that have been experienced in the way people use water, and felt that what we proposed to the task force was supportable from a cost of service methodology.
Horseshit. You told the task force that Option #5, which was the one selected by the task force, came out of the fertile brain of Councilor Steve McCoid in your pre-meeting with him.
Again I want to stress, and I appreciate you giving me the opportunity, Gator, that this was done scientifically, it was studying the finances and the way people use water.
No, this was done politically, like so much of what the Public Works Department does under Fernandez' crappy leadership. You did a favor for a city councilor who wanted to give the Creekside Golf Course a $60,000 rate reduction without making it look like this was a special favor for Creekside.
It just so happened that Creekside gets a break, and it just so happened that Creekside proposed it, but this is not a special deal for Creekside Golf Course.
Actually, it is. Creekside gets a $60,000 a year water rate reduction because Councilor McCoid came up with a way to try to hide the special interest deal by lowering the rate for all irrigators, thereby saddling other water users with a $600,000 additional bill rather than a "mere" $60,000 bill.
Gaynor: That’s good to know, because a lot of people are looking at it as a possible favor for Creekside.
Fernandez: Right. If you want to characterize the favor that we did for Creekside, and I use that term in air quotes, is we looked at it, and showed it to the task force, and said here is something, if you want to recommend it, here’s something you can recommend that makes sense within the cost of service.
So if we did anybody a favor, we looked at it. I guess we could have said, we’re not even going to look at it, you know, forget it, we’re not going to look at it. But there is no favor to Creekside specifically in terms of the change in the irrigation rate. That is a supportable change that will affect the 670 irrigation customer accounts and the 40,000 accounts that are inside the city. Outside the city, the customers aren’t affected.
No favor to Creekside? Give me a f#@king break. Public Works Director Fernandez, you came up with the proposal after your cozy pre-meeting with Steve McCoid. The "we" you speak about wasn't the staff of the Public Works Department. It was you. Only after the task force meeting that followed the pre-meeting was any sort of written staff analysis shared with Task Force members.
I don't understand how Peter Fernandez continues to be the City of Salem Public Works Director. This Creekside episode shows how he operates in a shady, backroom dealmaking way. Just as he did with the 2013 U.S. Bank tree killing debacle that I documented in exquisite factual detail in my "Outrage" report.
What I said in a 2014 blog post where I released the report sure echoes the Creekside Golf Course scandal today.
This is a case study of how city government shouldn't work.
Here the Public Works Director, Peter Fernandez, ignored the law, facts, expert advice, advisory committee recommendations, and lots of public testimony so he could keep a back-room verbal promise to the U.S. Bank president, Ryan Allbritton, to cut the five large, healthy, beautiful trees down.
The extra-legal promise itself is bad enough. Worse, Fernandez made that promise two years before the bank started the required process of filing an application to remove the trees.
Even so, Public Works Director Fernandez was all set to order that the trees be pruned, rather than removed, until bank president Allbritton reminded him of that "just between us" deal they'd made together. It didn't matter that Albritton was unable to give a single coherent reason why the trees needed to be killed.
After Fernandez spoke with the bank president, everything changed.
Allbritton got an unusual second chance to argue his extremely flimsy tree-killing case. He lobbied city councilors, who weren't bothered by Allbritton's mention of the verbal promise.
Maybe because this is the way the City of Salem habitually does things under its current leadership -- working out deals with special interests behind the scenes, then going through a show of holding public hearings and issuing a formal decision.
Don't worry Brian, this will go nowhere. Much like the Cherriots payroll tax measure, the Salem Chamber and other defenders of local jobs will step up to ensure that we "protect small business" from having to shoulder the burden such an unfair rate restructuring would surely create.
Posted by: Not Even Wrong | August 23, 2016 at 06:39 AM
Not Even Wrong, you're so right! Naturally the Chamber of Commerce will step in to prevent the unfair $600,000 water rate increase on small businesses.
Just like the Chamber has opposed the Billion Dollar Third Bridge Boondoggle and the over-priced, over-sized $82 million police facility bond measure that will hit small businesses with a property tax hike.
Oh, wait... the Chamber of Commerce isn't opposing those tax increases. Damn. I guess the Chamber only opposes things like improving bus service for everybody in Salem. If a tax increase benefits wealthy special interests, the Chamber is fine with it.
Posted by: Brian Hines | August 23, 2016 at 08:38 AM
It's more of an I'll scratch your back if you scratch mine at the Chamber.
Posted by: Sandra Oliver-Poore | August 24, 2016 at 11:43 AM