The city of Calistoga was wrong to use $525,000 in money collected under a special flood control tax to defend against a water-related lawsuit, an oversight committee says in a new report.
An attorney for Calistoga vociferously defended the city against that charge Wednesday evening at a meeting of the Measure A Financial Oversight Committee. Attorney Matthew Visick called the report inaccurate and said it misstated the legal history of the lawsuit to draw its conclusions.
The money was spent combating a lawsuit by Grant Reynolds, the San Diego man who has sued the city repeatedly over water use and its management of the Kimball Dam, particularly the issue of allowing more water to flow downstream to protect the spawning grounds of salmon and trout. Reynolds began suing Calistoga in 2009.
The city, with county approval, used the money to pay its lawyers, saying it was protecting its water rights. The actual legal costs were $1.5 million, although Measure A only covered a portion of that. Voters approved Measure A in 1998 to fund flood control projects throughout the county.
Wednesday’s meeting strayed between debates of the merits and history of Reynolds’ lawsuit — and Calistoga’s right to defend itself from it — and the issue before the committee, which was the appropriateness of using Measure A money to pay for the city’s legal costs. It ultimately delayed any action on the report until May.
Relying heavily on Reynolds’ extensive legal file from the lawsuit, an ad hoc subcommittee paints a harsh picture of the city’s conduct, saying there was at least a 30-year pattern of refusing to comply with demands by state regulators to monitor the amount of water flowing into and out of the reservoir and to release a sufficient amount to protect fish habitat.
Members said the records demonstrate that the city knew, or should have known, that its claim that it was operating in compliance with its water use licenses and other regulations was wrong.
Genji Schmeder, a member of the subcommittee that produced the report, said Reynolds’ lawsuit helped coerce the city to take action on spilling water from Kimball Reservoir for fish, which included bringing the state government in to file a companion brief to the lawsuit. The city is working on producing a bypass plan that would release water from the dam for fish. It has an interim one currently.
“It’s the lawsuit that got the state to be serious,” Schmeder said. “When the city of Calistoga realized the state was on its back, they just conceded.”
Visick, who represented Calistoga in the lawsuit, vehemently denied that assertion. He said the city and the state would have worked out the bypass issue outside of a courtroom, and Reynolds’ lawsuit only served as a drain on public tax coffers.
“I was rather shocked when I read this report,” Visick said. “I find myself reading it and feeling like I’ve taken a three-year leap backward in time. To be relitigating that issue here at this committee meeting is not only needless, it’s unfortunate.”
Visick criticized the report for relying on Reynolds’ arguments in the lawsuit, and said it misread the regulatory requirements of the city’s two water use licenses, and conflated them with a permit the city never actually used.
The subcommittee’s strong conclusions were not unanimous. Member Peter Murphy dissented, saying he thought the spending was appropriate. Schmeder and David Smith agreed in their criticism of the city.
In explaining his dissent, Murphy said he believed the legal costs the city accrued were appropriately funded by Measure A because it involved defending its water right. Measure A allowed for the city to use money to improve the reliability of its water supply, he said.
“Calistoga is entitled to defend themselves,” Murphy said. “They’re entitled to spend their money. For a million and a half dollars you could probably bus the fish up to Calistoga and have a spa day for them. My conclusion was that it was an appropriate use of the Measure A money but not particularly effective.”
Smith disagreed with that logic, and said it could be used to broadly interpret the measure’s language to pay for any number of things. In his view of what Measure A was intended to do for Calistoga, a reliable water supply refers to Kimball Dam, not attorney’s fees, he said.
“That flexibility is a danger,” Smith said. “You include a lot of stuff with that. Water supply reliability means a dam that works. The reliability is not the same as water rights.”
The subcommittee was formed last year after the Napa County grand jury criticized the city for its use of Measure A money and the county for lax supervision of the city’s funding requests. The grand jury report was particularly harsh in its assessment of the Financial Oversight Committee itself, which it called a “sleeping watchdog” in the process of handing out the flood control money.
Calistoga has used the Measure A money in part for flood control improvements in the Grant Street area and, most prominently, to pay for almost half of a new $6 million water storage tank on Mount Washington.
Reynolds sued unsuccessfully to block that use of Measure A money. The grand jury found that the use of the money was “inappropriate,” but placed most of the blame on county officials for failing to stop Calistoga from using the funding.
The subcommittee said it decided to focus exclusively on the legal spending and expressed no opinion on any of the other findings in the grand jury report, although its narrative of the dam’s history closely tracks the grand jury’s account.
The legal spending examined by the subcommittee came during one of Reynolds’ earlier lawsuits, alleging that the city had violated its “public trust” by failing to protect fish habitat.
That lawsuit was eventually dismissed, but not before the city agreed to release more water downstream. The city has denied that the agreement was in response to the lawsuit, saying it was instead a response to pressure from state regulators.
“The invalidity of the city’s reasoning lies primarily in the fact that Kimball Dam was operated out of compliance through most of its existence and demonstrably so in the years leading up to the Reynolds lawsuit,” the report states. “The requirements of permits and law are not a valid defense when the license holder is continuously and obstinately violating them.”
The subcommittee agreed with the grand jury’s view that the county should have stepped in to stop Calistoga from using the Measure A money. Members went a step further and said the county should have forced the city to comply with demands by regulators to protect fish habitat.
“Instead, county government took no side in a battle for the life of the upper Napa River,” they wrote, “and then rewarded the party in the wrong with funds raised for the Napa River flood project.”