McPhee barred from closed sessions at FPUD

A September 9 special meeting of the Fallbrook Public Utility District board placed sanctions on FPUD board member Archie McPhee for violations of FPUD’s ethics policy and the district’s code of conduct.

McPhee will be prohibited from participating in closed session matters involving the Santa Margarita River Conjunctive Use Project, which was the subject of his violations according to FPUD, and from closed sessions involving personnel matters. McPhee will also not receive per diem meeting fees until he has complied with the district’s Administrative Code requirement that he attend a training session on FPUD director duties and responsibilities. The FPUD board also declared McPhee’s action with regard to the Santa Margarita River Conjunctive Use Project to be outside the scope of McPhee’s duties as a director, which means that FPUD will not provide legal defense or indemnification if a civil suit is filed against McPhee.

Because the forfeiture of meeting fees created a personal financial interest of more than $250 for McPhee, he had to abstain from the vote due to a conflict of interest. FPUD directors Milt Davies, Al Gebhart, Bert Hayden, and Don McDougal all voted in favor of the sanctions.

“The issue was over three letters he sent to the commanding general at Camp Pendleton over the Santa Margarita River Conjunctive Use Project,” said FPUD general manager Brian Brady. “Individual board members are not permitted to make contact and contradict the will of the full board.”

FPUD and Camp Pendleton have been working towards finalizing the Santa Margarita River Conjunctive Use Project which would use natural and enhanced flows in the Santa Margarita River to enhance the recharge of groundwater basins and would provide up to 18,000 acre-feet per year for Camp Pendleton and FPUD. The project, which has a total estimated cost of $140 million, would also include a seawater intrusion barrier which would use recycled water and a distribution system to deliver water both to FPUD and to the San Diego County Water Authority. The management of the groundwater basins would provide FPUD with 4,000 to 6,500 acre-feet of new supply each year from the Santa Margarita River, which equates to approximately 25 to 30 percent of FPUD’s annual need of 16,000 acre-feet. The local supply would protect against cutbacks from the County Water Authority if the CWA’s State Water Project or Colorado River allocation is reduced.

An agreement between the United States Marine Corps and FPUD is undergoing Federal legal review and is expected to be finalized soon. “We have been in long-term negotiations with the Marine Corps over Santa Margarita River water rights,” Brady said.

A letter dated March 15 from McPhee to Camp Pendleton commanding general Vincent Conglianese opposed FPUD’s plans for the Conjunctive Use Project; in the letter McPhee identified himself as an FPUD director. McPhee’s letter to Conglianese dated April 25requested a copy of Conglianese’s communication to Brady and included the line: “Your communication to Mr. Brady jumped the Chain of Command for/of the Fallbrook PUD.”

McPhee’s letter stated that the chain of command was first the FPUD board of directors, second the FPUD general manager, and third FPUD management employees. McPhee’s chain of command paragraph included the line: “The Board of Directors is, by a majority vote of 3 of the 5 Directors, in total charge of the Fallbrook PUD.”

The FPUD board may delegate duties to staff. “I received instructions from the board to carry out these negotiations,” Brady said.

McPhee’s April 25 letter also included the line: “My impression of Mr. Brady is that he has, so far, assumed authority he does not legally possess.”

John Simpson, who is Camp Pendleton’s representative for water issues, attended the May 29 FPUD board meeting and told the FPUD board that McPhee’s two letters were undermining the ongoing settlement discussions. At that meeting FPUD’s Personnel Committee recommended to the full board that McPhee be found in violation of FPUD’s ethics policy and that appropriate sanctions be considered. FPUD’s board also authorized a letter from Hayden, who is the board president, to Camp Pendleton disavowing McPhee’s statements.

McPhee’s letter to Conglianese dated May 31 included the title “Archie D. McPhee Director #4, Fallbrook PUD” and made a Freedom of Information Act request for the name, address, and current telephone number of the U.S. Secretary of the Navy and a request for copies of the necessary permits for a new dam across the Santa Margarita River being planned by Camp Pendleton.

“The biggest concern is that by writing these letters they seemed to undermine years of negotiations with the Marine Corps,” Brady said.

McPhee requested that FPUD fund his legal representation in his challenge against the district’s claim that he has committed an ethics policy violation, asking for a minimum of $30,000 and a maximum of $60,000 for legal fees to be paid to the attorney of his choice. FPUD has Directors and Officers insurance through the Association of California Water Agencies’ Joint Powers Insurance Authority, and after Brady verified with ACWA-JPIA that McPhee’s actions were outside his scope of duties as a director the FPUD board voted 3-1 July 22, with McPhee opposed and Davies absent, to reject McPhee’s request for legal fees.

The September 9 sanctions added the lack of legal representation or indemnification if McPhee is sued for other reasons. “Since he took those unauthorized actions he is considered to be acting outside the scope of duties of a director, and therefore neither the district nor its insurance carrier will provide any defense or indemnification,” Brady said.

Action against McPhee was originally scheduled for FPUD’s August 26 board meeting, but McDougal could not attend and Davies’ presence was questionable (he was at that meeting). The FPUD board continued the action to September 10. “They wanted to all be there,” Brady said.

FPUD’s administrative code requires that board members attend an orientation program which includes explanations of the duties of board members and the district’s policies and procedures. McPhee, who was elected to a four-year term on the FPUD board in November 2010, has not yet attended such a training session. “He refused to do that,” Brady said. “He’s never gone through the initial orientation.”

Brady became FPUD’s general manager in July 2011 after Keith Lewinger retired.

FPUD board members are currently paid $115.76 (FPUD’s per diem policy has an annual escalation factor) for each board meeting or board-authorized meeting they attend. “He forfeits all meeting fees until he complies with the Administrative Code,” Brady said. “He has refused over the last three years to go through what every director is supposed to go through.”

A board may go into closed session for one of four reasons: personnel issues including disciplinary action or termination, pending litigation, real estate purchase negotiations, or discussion of facility vulnerabilities. McPhee currently is only prohibited from participating in closed session matters involving the Conjunctive Use Project or personnel issues.

McPhee was also instructed to cease and desist from any additional communication with Camp Pendleton.