Mayor Victor Gomez last week acknowledged the city
”
could’ve been more transparent
”
about talks with ClearSpot Energy in the nine months before a
January approval to power the wastewater treatment plant for 30
years, and he referred to a provision in state law as a
”
loophole
”
that allows governments to bypass the normal bidding
process.
To read columnist Marty Richman’s commentary on the ClearSpot deal and Mayor Victor Gomez’s discussion Thursday, go here.
Hollister Mayor Victor Gomez last week acknowledged the city “could’ve been more transparent” about talks with ClearSpot Energy in the nine months before a January approval to power the wastewater treatment plant for 30 years, and he referred to a provision in state law as a “loophole” that allows governments to bypass the normal bidding process.
Gomez in responding to the Free Lance Editorial Board on Thursday over criticism of closed proceedings that led to a January agreement stressed how he favors open competition and contended the state law cited by city officials in sidestepping a bidding process is a loophole and a “flaw.”
The law in the government code, Assembly Bill 4217, allows local jurisdictions to enter into such non-competitive lease agreements with alternative energy providers if the community receives the power at a discount relative to its current costs. It foregoes the open bidding process traditionally followed by government agencies for large-scale projects – and also the possibility that another energy provider could provide the same service with more lucrative savings.
“The law you guys stated,” he told the editorial board, “I agree – it’s a flaw. It’s a loophole. It’s a loophole, I believe, just like the medical marijuana dispensaries.”
Still, while expressing concerns about the lack of competition allowed under the law and acknowledging in the meeting that officials could have been more transparent, he also stressed how he was comfortable with the proceedings and approval.
“I approved the project, so obviously I felt comfortable with the process of it,” Gomez said. “I was comfortable with the answers I was given, comfortable enough that I approved the project.”
Gomez and three other council members Jan. 19 approved the 30-year lease agreement with the Atherton-based company. Councilman Ray Friend recused himself from the matter due to his employment relationship with Pacific Gas & Electric, a potential competitor for such projects.
Hollister agreed to provide the land, and ClearSpot expects to place an estimated 5,500 solar panels on 170,000 square feet near the plant while paying all capital and operating costs. The idea is that ClearSpot will sell energy to the city at a discount and provide about 60 percent of the sewer plant’s power. It is expected to save Hollister between $2 million and $10.6 million over the 30-year span, according to estimates.
While attempting to put Hollister “on the pedestal” as an example for other local governments, as Gomez put it, ClearSpot in recent months also progressed on talks with area school and water districts, along with the county about possibly using solar at the jail.
Company officials recently noted how a crucial part of their plan – and a necessity to raise the financing – is obtaining agreements with multiple jurisdictions in the county. ClearSpot has declared how time is critical, as eligibility for a 30-percent contribution on capital costs from the federal government expires at year’s end.
Gomez in Thursday’s meeting, however, recalled a conversation the prior day with ClearSpot Managing Director Gary Banta, who the mayor recalled as saying how the company intended to pull out of proposals with the other local jurisdictions due to publicity over the city’s deal.
“I think after this project, he’s gone,” Gomez said, referring to his talk with Banta. “He’s pretty much not happy with, publicly, what’s been going on. I’m not blaming you guys. That’s what you’re here for. You’re a voice in the community.
Gomez went on: “I talked to him yesterday. He came off the hinges. He’s gone.”
Banta when reached Monday disagreed with Gomez’s interpretation of the conversation. He contended he “never said that” regarding a withdrawal of the other projects and the company “absolutely” has plans to move forward on other proposals here.
Gomez pointed out, regarding his conversation with Banta, how he had disagreed with the ClearSpot official about the state law allowing the process followed by Hollister.
“One of the things they believe is because of the public scrutiny on the process of this that something’s going to change and they’re going to have to compete for those projects. That’s the problem where I disagreed with Gary. I disagreed with him on that issue.”
Gomez went on: “He’s happy with that (law). I’m not. I expressed that to him yesterday – I’m for public bidding. And he says in this case here, it’s not good to go to public bidding. When somebody tells me that, first of all, it does scare me.”
Banta told the Free Lance the state law is “not a loophole” and he maintained it gives local communities a better chance at a better deal. As to how it is more beneficial to the public without competitive bidding, Banta said: “You can provide additional benefits that are above and beyond the (power) savings and, thus, give more benefit than would be available on the RFP on the cost savings alone.”
‘It was a concern’
Though Banta has come to know the mayor in recent weeks, Gomez had not been involved with the ClearSpot negotiations that occurred behind closed doors in the nine months before the council’s approval of the deal Jan. 19. Gomez recalled how he first had heard about the project in April when he held his routine, weekly meeting with City Manager Clint Quilter, who told him there was “a possibility of moving forward on some type of solar project at the wastewater treatment plant.”
Quilter had been working on talks from the city’s side with Councilman Doug Emerson, and Gomez did not hear about the proposal again for three months until a July closed session meeting. There, in a two- to three-minute conversation, as Gomez remembered it, the city manager briefed council members and the city attorney.
“He said, ‘Doug’s been working on it with me, and I’d like to keep Doug as the council member involved with the project.’ I didn’t have a problem with that,” the mayor said.
Gomez said he did have initial concerns about the item being discussed in closed session and called it a “mistake” that he did not come forward about it. Gomez noted how other solar developers, including Hollister’s Ignacio Velazquez, had become aware of the ClearSpot talks shortly after council members discussed it behind closed doors. Besides the negotiations involving Emerson, Quilter and ClearSpot, it was on the closed-session agenda in July, August and December before proposal details first became public Jan. 4, two weeks before its approval.
“One thing I will tell you is that I never publicly or even questioned to staff, other than in my brain, why we were talking about this in closed session. It was a concern. It was definitely a concern in my head. That was one mistake I made was not moving that from my brain to staff.”
Gomez stopped short, though, of saying he had any regrets about the process.
“I don’t want to say regrets. I think we could’ve been more transparent. I think we could’ve been more inclusive. There’s never a downfall of having more public input, especially when it comes to government decisions.”
Throughout the months of talks, in light of interest from other potential solar developers, Gomez noted how he continually asked Quilter to ensure it was OK for the city to bypass a bidding process.
“I asked Clint directly, ‘Why are we not going out to public bids?” He said, ‘No. 1, we don’t have to. It’s not legally required for us to go to public bids.'” Gomez recalled Quilter’s second reason for keeping talks exclusive. “No. 2,” the conversation went, “there’s really not a project to bid on because there’s no project out there.”
From there, Gomez said he approached Velazquez again and asked how the city could get him involved in the proposal. He referred him to Emerson, he said, and the city ended up moving ahead with ClearSpot because Velazquez had talked about using Hollister Redevelopment Agency dollars to fund the project. The solar developer, though, responded to the Free Lance by saying that was one option for the funding and it would have allowed the city to own the project after five years.
Says he favors competition
The mayor stressed how he favors competition and criticized area legislators Assemblywoman Anna Caballero and State Sen. Jeff Denham – citing their lack of response on the state’s medical marijuana law and how they “haven’t done crap regarding that issue” since he asked for action – in expressing doubt they would address the provision allowing such non-competitive deals.
“It’s a concern. I don’t think there’s anything better than competition,” said Gomez, who owns the Hollister Papa Murphy’s, “and that’s coming from somebody that has 10 competitors in town when it comes to pizza chains.”
Once the proposal did become public, council members had 14 days before a decision. Gomez said the project might offer an example for improvements in policy when it comes to the amount of time council members and the public get to review major proposals.
The line of communication with ideas from council members – and getting those concepts to appropriate department heads – can be a problem, too, he said.
“Usually when anything’s going to come up, when there are ideas – unfortunately, they don’t come that often from the council right now – when ideas are proposed, they generally are brought to Clint (Quilter). It is a concern of mine.
He said he understands how council members and the city manager do not always see “eye to eye.”
“Sometimes the city managers dictate what’s going down to department heads or not. Sometimes you have a grand idea and mention it to them, and it doesn’t make it to (department heads). I always make sure that, especially if it’s an e-mail or something, I always copy (the department heads). That way people don’t send me in a loop.”
Editor Kollin Kosmicki is a member of the Free Lance Editorial Board.
