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County Desal Investigation Finds Collins Conflict, Lifts Blame from Supes

Former County Water Resources Agency board director Stephen Collins had a clear conflict of interest by consulting for an engineering firm that won a $28 million contract to manage the Regional Desalination Project, an investigation commissioned by the Monterey County Board of Supervisors alleges.

The 63-page report, released Wednesday night by County Counsel Charles McKee, comes just two days after Collins filed a claim against the county alleging Supervisors Dave Potter, Lou Calcagno, McKee and others connected to the $400 million desalination project defamed him and robbed him of his ability to earn a living after details of the consulting gig with RMC Engineering were made public.

View Monterey County's Report on Steve Collins.

The county investigation was conducted by Karen Getman and James Harrison, both specialists in conflict-of-interest law and the California Political Reform Act, of the San Leandro firm Remcho, Johansen & Purcell. Known informally as the “Remcho report,” the document states Collins’ actions “place at risk the core agreements that form the legal basis for the Regional Desalination Project.”

Collins is currently being investigated by the Monterey County District Attorney and state Fair Political Practices Commission; the report alleges Collins “and possibly others likely violated Government Code Section 1090 and the Political Reform Act” which prohibit public officials from making or participating in official decisions in which they have a financial interest. The D.A. is investigating alleged Section 1090 violations, which are punishable with a fine of up to $1,000 and time in state prison. The FPPC is looking to the alleged Political Reform Act issues.

The Remcho report lays out a detailed timeline on how Collins’ alleged conflict occurred. According to that chronology, it began in 2010, when Collins was supposed to be assisting MCWRA on the desal project. Instead, he started consulting for RMC Engineering, the firm that would ultimately win the $28 million project management contract.

Collins eventually earned more than $160,000 in consulting income for his efforts to help Regional Project partner Marina Coast Water District secure project financing and handle objections from the Ag Land Trust. The local nonprofit, which is challenging water rights needed to make the desal project flow, has since sued Marina Coast.

Marina Coast General Manager Jim Heitzman allegedly identified Collins as a prime liaison between the water district and the ag industry because Collins was first appointed to his water-board seat by the powerful ag lobby Grower-Shipper Association, and also served a number of growers in his Salinas-based accounting practice.

According to the Remcho report, RMC co-founder and principal Lyndel Melton expected Collins not only to placate Ag Land Trust, but also to secure financing for the Regional Project. Melton reported his legal advisers said the deal would be OK, so long as Collins was not being paid by MCWRA.

The day the Board of Supervisors voted 5-0 to approve the water purchase and settlement agreements that make the Regional Project possible, Collins was at their meeting. Documents show he was paid for that meeting by RMC, in addition to receiving his $50 per diem from MCWRA.

Collins first made a public mention of his consulting job at a MCWRA board meeting Aug. 23, 2010. The board voted 7-0, with Collins recusing himself, on a contract with GeoScience, Inc. to drill test wells. RMC had a $500,000 subcontracting job under GeoScience.

“RMC, even though they’re not part of this contract, they are doing project management and I’ve developed a relationship with them,” Collins said.

At the time, he offered no further explanation for the recusal. According to the Remcho report, the recusal was too little, too late to have prevented Collins from violating Section 1090 or the Political Reform Act; his influence on the process was enough.

The report also describes the joint venture between Collins and Weeks, CollinsWeeks LLC launched in January 2010 with $500 each. With aspirations to digitize medical records for military use, Weeks allegedly advised county staff he planned on stepping down from his position as general manager but was urged by Supervisors Dave Potter and Lou Calcagno to stay on.

Weeks also said Collins had suggested a possible partnership with Heitzman, suggesting the three of them leave county service to work as the project managers on the desal project—the same job RMC's been hired to do.

The Supervisors voted 5-0 on Tuesday to amend Weeks’ contract after weeks of reviewing his performance in closed session. His last day on the job will be Oct. 7. The CollinsWeeks account balance is $100, according to the Remcho report.

Though Collins’ claim against the county alleges Supervisors Potter and Calcagno actively encouraged him to seek compensation for “hundreds of hours” of work he contributed, and says that Deputy County Counsel Irv Grant approved his RMC deal, the Remcho report largely absolves county staff and officials.

According to the Remcho report as well as Collins' own complaint against the county, Collins maintains that Grant advised him he could keep the RMC consulting gig. But the Remcho investigators found no record of such advice.

The first to raise a red flag, according to the report, was Marina Coast counsel Lloyd Lowery. He asked attorneys with the firm Downey Brand, which works for the county, to investigate and take action: “If we do see an issue, we need to bring it to Curtis’ and Steve’s attention soon,” Dan Carroll of Downey Brand wrote in an email. He subsequently recommended Collins seek his own legal opinion.

After Collins’ recusal, the report states, he consulted with Grant, who allegedly recommended Collins step down “for about a year” from his MCWRA position. Collins resigned from the agency on April 1, after the Weekly and other publications wrote about the RMC consulting job.

The Remcho report alleges that Collins violated Section 1090 and the Political Reform Act on numerous counts, but states, “Throughout all our interviews, Collins continued to insist that he had done nothing wrong.”

Check www.mcweekly.com/desal for continuing coverage of this story.

Mary Duan contributed to this report.