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Conflicts-of-Interest Threaten the Borrego Valley

A majority of Borrego Water District’s (BWD) directors (3 of 5) have at least an apparent conflict-of-interest on many decisions involving groundwater management.  A smaller, but non-trivial, percentage of Borrego Springs Community Sponsor Group members have the same kind of apparent conflicts with respect to certain zoning and land use issues – especially where those involve groundwater management.

 

As a result, special interests –agriculture and real estate – are able to have proxies participate in the discussion of, influence, and even vote on decisions from which it is apparent to any objective observer that they will or may, directly or indirectly, profit.  Indeed, in a recent case a BWD director refused to heed the warning of both BWD counsel and the Chair of the Groundwater Management Standing Committee that she had a conflict of interest and should not participate in discussing a matter because she had a conflict-of-interest.  In a classic case of shooting the messenger, she then tried to persuade the BWD to fire its counsel.

 

At worst, as in the above example, their behavior may be illegal.  At best, it is unseemly, gives the appearance of a conflict-of-interest, and further erodes public confidence in these groups and their individual members.

 

In the case of the BWD board, the immediate consequences are more serious; for the special interests are now in a position to delay, derail, and even dismantle existing groundwater management regulations they perceive as inimical to their financial interests or the financial interests of those from whom they derive income.

 

Specifically:

 

 

 

 

 

 

 

 

All three of the above named BWD directors aver that the Policy artificially inflates the price of farm land located within the BWD, but offer no sales data or other objective evidence to substantiate this claim.

 

Notwithstanding the above, BWD Counsel concluded that, Anderson, King, and Smiley “…are not required to disqualify themselves from decisions concerning the 3:1 Ratio or Fee Schedule because it is not reasonably foreseeable that the decisions will have a material financial effect on any qualifying economic interest.”  (Letter of March 26, 2007, from Allison E. Burns, BWD Counsel to Russ Fogarty, General Manager, Borrego Water District, “Re:  Opinion re Conflict of Interest as to 3:1 Mitigation Ratio and Preservation Fee Schedule”).

 

According to the minutes of the BWD regular monthly board meeting on 28 February 2007, “the Board had received 12 letters in support of 3:1and only two, both from developers, KSD Development and attorneys for the Mesquite Trails Project, in opposition to it.  Director Shimeall noted that other governmental agencies support the 3:1 policy and it should be given more time.”  Kim Post, the BWD’s consulting engineer, “noted that of all the proposals considered to correct the overdraft, the 3:1 mitigation was the only policy that had actually produced results.”   Director Andersen, however, “felt the 3:1 policy had not been effective and something new should be implemented;” while Director Smiley, “felt the current policy had inflated the price of farm land,” but offered no evidence to substantiate his assertion.  Borrego homeowner Martin Rosen “spoke in support of the 3:1 ratio, stressing the need to solve the problem of the declining aquifer and urging the Board to give the policy more time.”

 

At the Regular Meeting of the Board of Directors on March 28, 2007, a motion was made by Director Smiley and seconded by Director Andersen to revise Resolution 2006-12-1, Amended and Restated (New Groundwater Preservation Policy) to reduce the mitigation ratio to 2:1.

 

 “Director Shimeall opposed the motion, noting that the majority of public comments supported the 3:1 ratio.  Richard Walker spoke in support of the 3:1 mitigation, referring to it as the only substantive part of the Groundwater Management Plan.  Kellie Hamilton [Broker/Owner, Coldwell-Banker Borrego and President of the Borrego Springs Real Estate Association] urged managed growth to maintain the tax base…Mr. Sharman [principal of the Borrego Water Exchange] questioned the wisdom of reducing the rate of mitigation when the overdraft continues to accelerate.  He suggested adopting a “sustainability ordinance,” requiring decrease of the overdraft by two percent per year. 

 

The amended motion passed three to two with Smiley, Andersen, King voting “Yes,” and Shimeall, Mendenhall voting “No.”

 

Prior to the BWD board’s action on the mitigation ratio, the Borrego Springs Community Sponsor Group which advises San Diego county officials on local planning and land use matters, voted 7 to 3 to send a letter to the BWD supporting the BWD’s current 3:1 mitigation requirement for new construction.  The three “No” votes were cast by:  Judy Haldeman, a realtor with the local Coldwell-Banker office; Kerin Shugart, an employee of Montesoro (formerly Rams Hill), a large development on the south slope of the valley that consistently and vigorously opposed the BWD’s 3:1 mitigation requirement and sought, through various means, to reduce, eliminate, or be exempted from the mitigation fee; and the infamous Mr. Smiley (see above).   (Minutes of the Borrego Springs Community Sponsor Group, 6 March 2007, page 3, Section 3, Para. h.) 

 

Without exception then, opposition to the 3:1 mitigation requirement on both the BWD Board of Directors and the Borrego Springs Community Sponsor Group, comes from realtors, developers, or those with a direct financial connection to members of those groups.

 

Although their situations may not rise, or in this case sink, to the level of a legal conflict of interest under California law, no fair minded and right thinking individual could see the actions of certain members of the BWD Board of Directors and the Borrego Springs Community Sponsor Group in this matter as anything but unethical, self-serving, and sleazy.  Had they any integrity they would recuse themselves from participation in these and similar decisions.

 

A primer on conflict-of-interest law in California available on this site briefly summarizes the salient aspects of the law and contains links to more detailed information about conflicts-of-interest.

05/06/07

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