Law Firm Sues City For Allegedly Violating Open Meeting Laws On SDG&E Franchise Agreement
Thursday, July 30, 2020
UPDATE: 6 p.m., July 30, 2020.
A law firm connected to former San Diego City Attorney Mike Aguirre filed a lawsuit Thursday against the city of San Diego and several city council members for allegedly violating the state's open meeting laws on San Diego Gas & Electric franchise bid.
The complaint from Aguirre & Severson alleges members of the City Council's Environmental Committee engaged in closed meetings to discuss a consultant's report on an energy franchise agreement before voting 3-to-1 on July 16 to move forward with it.
The city of San Diego is considering how to negotiate a bidding process for a multi-billion dollar deal franchise agreement that will award a utility the right to use city land for energy infrastructure for decades. The negotiation opens as the incumbent utility San Diego Gas & Electric's 50-year contract expires in January.
Community advocates have said the potentially lucrative agreement could be a significant source of revenue for the city.
But they say the recommendations outlined in a JVJ Pacific Consulting, LLC report to the city is presenting a "sweetheart deal" for SDG&E. The report says the city should ask for a minimum bid of $62 million for the right to service the city for decades. Community advocates say that's too little of an amount.
KPBS reported on July 27 that many members of the public had felt like the discussions over the franchise agreement weren't transparent. Councilmember Jennifer Campbell told KPBS that she had met with members of her team for many weeks before the meeting.
The firm Aguirre & Severson said that's a violation of state law.
"The public in California has a right to watch the process by which their elected officials adopt a policy or adopt a law. It's called collective occurrence," Aguirre said.
Aguirre referred to California law which states, "the people have the right of access to information concerning the conduct of the people’s business, and, therefore, the meetings of public bodies and the writings of public officials and agencies shall be open to public scrutiny."
"What happened here is these officials got ahead of themselves ... The mayor's representatives, acting as go-betweens, manufactured a consensus in the environment committee to support a calling for a 20-year franchise agreement," Aguirre said. "That decision was made behind closed doors, and it was made in a series of serial secret meetings."
Councilmember Barbara Bry, the only Environmental Committee member to vote no on the report, told KPBS that the vote was “another example of a backroom deal at city hall. Special interests controlling the agenda.”
Bry referred to a July 14 letter from the San Diego Regional Chamber of Commerce which showed support for the committee to adopt a 25-year franchise agreement with SDG&E. The letter was sent two days before the committee first brought the consultant's recommendations to a public city council meeting on July 16.
In an interview on July 22, KPBS asked Campbell about the transparency of the negotiation process. Campbell said, "there are no backroom deals," but told KPBS that "we met several times my team and I and the Environment Committee adviser ... with the city and with the consultant."
She added, "So, it was pretty open process and it's very hard for every single council member to know every single thing."
"That decision was made behind closed doors and made illegal, that's where the public didn't see what was going on," Aguirre said. "Once the environment committee made its mind to move ahead. It rendered the public participation absurd. All these people showed up thinking they had a chance to affect the council members, but they had already made up their minds."
The public needed to have the chance to discuss the terms of the consultant's recommendations more and to discuss whether they feel like the current utility fits the definition of a "responsible bidder," Aguirre said. The public also needed to hear about other energy options, like municipalization, he said.
The consultant's recommendations were only released to the public a week before the July 16th meeting and were several hundred pages long.
On July 21, KPBS asked the city's Deputy Chief Operating Officer Erik Caldwell, about the delay.
"I don't believe that there was a tremendous amount of delay in releasing the report," Caldwell said. "Reports are typically doctored, dated to counsel a week before. We did extensive briefings with council members on a one on one basis, which is our normal process leading up to the committee hearing."
And in an interview with KPBS, SDG&E executive Mitch Mitchell said he felt like the process has been transparent as well.
"The mayor's office led a listening tour, and they went around and they talked to all of the people they thought would be interested in bidding, and that listening tour was designed to give the mayor's office a better insight into what to expect within the process," he said. "I think the city council would acknowledge as well that everybody is on the same page, that transparency is the single most important component of this process."
SDG&E has said it does not want to pay $62 million for the bid and would rather pay somewhere between $1 million to $2 million. It's also said it would like to pay the bid in cash, goods, and services — which is a motion that Councilmember Scott Sherman raised at the Environmental Committee meeting.
“Our office takes seriously any alleged violation of the state’s Open Meetings Law and will review this allegation accordingly,” spokeswoman Hilary Nemchik from City Attorney Mara Elliott’s office wrote in an email to the San Diego Union-Tribune.
The consultant's recommendations could go to the full city council for a vote in the coming weeks.
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