Water board terminates San Vicente solar project

By Karen Brainard

Ramona Municipal Water District directors terminated the district’s San Vicente wastewater treatment plant solar project and directed staff to request a $10,000 refund from the law office of its legal counsel.

RMWD Director Joe Zenovic said at the board’s June 12 meeting that he believed there was a conflict of interest with the district’s legal counsel, Sophie Akins of Best Best & Krieger (BBK). Zenovic noted that Akins brought the matter to the board two years ago and acted as the project manager. She is now a member of the California Center for Sustainable Energy Board (CCSE), he said. CCSE is the organization issuing solar rebates.

“I don’t think this board should ever allow legal counsel to act as project manager,” said Zenovic.

Akins became a partner in BBK earlier this year and has been replaced at RMWD meetings by attorney Brook Miller of BBK. An April 16 BBK press release announced that Akins will lead the law firm’s renewable energy practice group.

Having worked with other public agencies on renewable energy projects and power purchase agreements (PPAs), Akins brought California Solar Initiative rebates to the attention of the board in spring 2009, saying rebate amounts were gradually dropping.

To secure the rebate, the water district had to pay a $25,000 reservation fee — $15,000 for the Santa Maria wastewater treatment plant and $10,000 for San Vicente — that was to be refunded once the projects were completed.

The board secured approximately $935,000 in rebate funds. It then entered into a PPA with a private company that would construct, operate and maintain the systems at no cost to the district over 20 years. The rebate would go toward construction, and savings would be passed onto the district through reduced electricity rates.

Over the course of two years, the projects have seen numerous delays, requiring the solar company to seek extensions from CCSE. The latest extension deadline is Oct. 1.

At the board’s May 22 meeting, Alejo Lopez, a manager with Siliken, and John Woody with Enfinity, the financing partner, told the board that construction was delayed for the San Vicente site because of a county lien on the property. If construction could not start by May 31, the project could not be completed by the Oct. 1 deadline and the district would lose its $10,000 reservation refund, they said.

Possible solutions were to seek a third extension or to obtain a bond in favor of the county, determined to cost at least $8,000 a year until county-required drainage and road improvements were implemented at the site.

Lopez told board members at their June 12 meeting that he contacted CCSE and was told its board will consider a third extension.

“They recommend we make a formal request and will consider it,” he said, adding that it could take two to three weeks for that decision to be made.

Zenovic said the lien or bond may not be resolved even with a third extension.

According to Zenovic, BBK has provided legal counsel since 1997. He said the firm should have known of the lien and should have not waited until the last minute to inform the board.

“I’m tired of being treated like a yo-yo, particularly of counsel that works for me,” Zenovic said.

He made a motion to terminate the San Vicente project and ask BBK to refund the district the $10,000 rebate reservation fee. He also said staff should review BBK’s billings to determine the amounts charged in legal fees for the projects.

Miller of BBK said the lien was so atypical that legal counsel worked to determine whether it was enforceable.

“We’ve done what we can within our power to work with the county and to negotiate through their very complicated procedure,” she said.

Miller said BBK has represented the district in its best interests and there were unexpected circumstances that arose.

Director Darrell Beck agreed with Zenovic.

“Whether conflict of interest, we weren’t advised of a lien. I think we’ve really been put in a corner on this thing,” said Beck.

The board approved Zenovic’s motion with Beck, Zenovic and Director Red Hager voting in favor of it. Director Kit Kesinger abstained because he was absent from the May 22 meeting. Board President Bryan Wadlington was absent at the June 12 meeting.

Lopez said afterward that he was not expecting that outcome and it creates a loss for Siliken. He could not be reached for further comments.

In an unrelated matter involving BBK and the county, the board did not approve a conflict waiver so the law firm can represent the County of San Diego, along with other public agencies, in a nationwide lawsuit.

The case, City of Arlington v. Federal Communications Commission (FCC), involves a challenge to the FCC’s decision limiting local control over applications for placement of wireless communications facilities. The case does not relate to any matters in the water district, but the conflict arises because a BBK attorney is representing the district’s interests in negotiations with San Diego County on the lien at San Vicente.

BBK attorneys will be working out of the law firm’s Washington D.C. office and are filing a petition to the U.S. Supreme Court to review the case.

Zenovic said the request came last minute.

“Let them find some other firm,” he said. “I’m more concerned about the Ramona Municipal Water District and its potential conflicts with counsel.”