Commentary: Puzzling timeline of events in ClearSpot deal

Last week in my column, I publicly asked Mayor Victor Gomez to
come forward and fill in the gaps concerning the city’s 30-year
purchase and lease agreement for ClearSpot Energy, Inc., to supply
solar generated power for the wastewater treatment plant. On
Thursday, Gomez sat down with the paper’s editorial board to
discuss the matter.
Last week in my column, I publicly asked Mayor Victor Gomez to come forward and fill in the gaps concerning the city’s 30-year purchase and lease agreement for ClearSpot Energy, Inc., to supply solar generated power for the wastewater treatment plant. On Thursday, Gomez sat down with the paper’s editorial board to discuss the matter.

He told the story as he remembered it and answered questions in a candid reassessment of the issues, and his recollection of events was helpful. It is important, though, to note that he was not involved in several of the preliminary steps. 

Our objective was to get an accurate accounting of what happened and why, and to identify any mistakes city leaders may have made so they could take steps to improve their process in the future and better serve the public interest.

The paper’s board is on record as supporting alternate energy projects. Its members do not represent anyone protesting the process – solar developer Ignacio Velazquez in particular – and we often recommended government action be expeditious, careful, fair and competitive. Board members do not tend to believe that these requirements are mutually exclusive, 

Sometime during or before April 2008, ClearSpot approached Councilman Doug Emerson or he approached them – that sequence is still unclear. Emerson took the matter to City Manager Clint Quilter, and they discussed it at length. Eventually, they officially presented it to the members of the city council and the city attorney in a closed session meeting July 20. At that time, only four months from the introduction and prior to any public notice, the city was already negotiating the price and terms of payment for the agreement, according to the closed session agenda.

There is no record of what transpired between Emerson, Quilter and ClearSpot during those first four months. As far as the mayor can recall, the project did not follow the course the public comes to expect for a major proposal and 30-year commitment – and it did not go to either the city’s planning or engineering departments for official review.

Nor did Gomez recall any reason for having July’s meeting conducted in closed session. He said he thought about the issue himself, but did not bring it up at the time. At some point in the closed proceedings, Gomez confirmed that Quilter requested that he continue working with Emerson as the council delegate on the project, to which other members verbally agreed.

The Free Lance Editorial Board concluded this was a serious error in judgment. Emerson had brought the project to the city, and it already had bypassed several of the usual checks and balances. As a minimum, the council should have formed an ad hoc committee adding one council member who is not politically vested in the project to the review process.    

The fact that Hollister was considering a major solar project with ClearSpot soon leaked to at least two potential suppliers who contacted city officials – one of them offered specific ideas. If there were ever any justification for keeping the information from the public up to this point – and the editorial board does not believe there was – it was totally gone once the leaks occurred and outside discussions took place. Parts of the solar community obviously knew of the project, as did the city and ClearSpot. And the only group frozen out was the taxpayers – an all too familiar theme. 

There was another closed session in August, but ClearSpot did not make its first public presentation until Jan. 4, four and a half months later. On Jan. 5, the city published a 14-day notice of public hearing scheduled for Jan. 19. That is the minimum public notice required by law – to the day. At that meeting, the council approved the contract with ClearSpot. 

According to the staff memo, no environmental impact report was required, and the project reports – including that finding – were not available to the public until January 15, only four days before the hearing.   

Although the city obtained third-party financial analysis, it appears officials did not obtain any technical analysis from a neutral party – nor did they officially open the process for alternate proposals during the eight-month period.

One major advantage of obtaining alternate proposals would have been more input, from competitors, on both the technical and financial aspects of a project. Requests for proposals do not require the city to accept the lowest bid, but they do give everyone a fair chance and it results in better deals for the taxpayer.

Additionally, according to Gomez, the city did not require ClearSpot to indemnify the city against possible environmental litigation for failure to do an EIR, a substantial cost savings to ClearSpot. In stark contrast, the county’s recent agreement with a potential solar energy provider, Solargen, required full indemnification.  

This type of an agreement is a first for Hollister, and the technology for operations of this size and extended duration are new to ClearSpot, whose previous experience is with installations of less than 20 percent this size. Should the city have signed up for a 30-year risk using expedited approval methods while details were kept from public view seven or eight months? Clearly, the answer is no.

The city had more than adequate time to do this right, which makes this process even more puzzling. The secrecy and lack of competition was a significant advantage to ClearSpot.

The city’s defense has been that the process was legal – and it appears to be – but that is a low hurdle to clear at the expense of open competition.

Marty Richman is a columnist and a member of the Free Lance Editorial Board.