Uprising in the Water Colonies

L.A. OWNS ALMOST ALL OF THE LAND in Inyo County and a good chunk of Mono. Residents up here sometimes feel unable to realize the full potential of their little slice of paradise. The diplomatic overtures from Nichols, Patsaouras and Nahai offered hope. Then the Owens Lake Dust Mitigation Project came up. Left until the end of a three-day whirlwind, the half-billion-dollar project, orchestrated by megacontractor CH2M Hill, with help from its friends in City Hall, has no easy answers — a good reason for L.A. ratepayers and Owens Valley residents to be wary.

From the start, the Owens Lake project has been tainted by lack of oversight at the highest levels. Last fall, the Weekly reported employees’ claims of mismanagement and runaway costs on the lake. The IBEW grumbled that employees on the lake were disgruntled castaways. Since then a lot has happened, but little has changed. Patsaouras was the first to jump all over CH2M Hill. He called for the audit and the re-bid and prevented CH2M Hill from acting as engineer and construction manager, an arrangement ripe for conflict that has insulated the company when problems emerged.

Detractors in City Hall said Patsaouras had ulterior motives. Some suggested he had friends in the contracting business who might want to get in on the action. But after five months, with an auditing firm yet to be chosen, CH2M Hill has learned it will be awarded three of the four contracts, with its subsidiary, OMI Inc., being awarded the fourth. Rich Coles, the project manager for CH2M Hill, said on Friday that his staff has been informed by DWP staff that they will continue to run the dust-mitigation project, which was responsible for a 4 percent water-rate hike in recent years, and is driving proposed rate hikes of more than 7 percent over the next two years, according to a city report and a rate-hike audit.

Asked why the audit has lagged, Nahai replied sadly, “We’ve pushed for it. Staff is preparing the proposal. Are you suggesting the process is manipulated?” When confronted with the audit’s questionable progress, Patsaouras grew irritated. “CH2M Hill has been fucking the city with uncontrolled expenses. You wait and see what happens when we get the results. It won’t be all CH2M Hill.” Nichols abruptly ended a phone conversation when informed that many contractors did not bother to bid on the Owens Lake contracts. “CH2M Hill and OMI are clearly cozy with DWP staff,” says Carla Scheidlinger, a consultant with Agrarian Research and president of the Owens Valley Committee. “DWP staff was told by the commissioners to put the contract back out to bid. Contractors can tell when the outcome is wired.”

Intrigue has surrounded the dust project. CH2M Hill senior vice president Jack Baylis, a well-known fixture at City Hall, has left the company. Speculation about Baylis’ departure is rampant. He would not comment. A spokesman from the Denver office praised Baylis and said they were sorry to see him go. Sources familiar with CH2M Hill say that in the past, Baylis had been troubled by reports from subcontractors that questioned Rich Coles’ methods in awarding subcontracts. A procedure was set up to oversee Coles’ hiring of subcontractors, which had included public-relations firm Lee Andrews Group, hired at the behest of former DWP commissioner Kenneth Lombard.

There are signs that it was a two-way street. Former DWP water manager Gerry Gewe’s son, Andrew, works for CH2M Hill as a database manager. Gewe insists he had nothing to do with his son’s hiring. “I’m not naïve enough to say my name didn’t have an influence, but it has never affected my decisions.” Gewe also heads a missionary effort in Kenya on behalf of Eagle Rock Baptist Church, and one of its staunch supporters, according to Pastor Rick Manbel, is former NBA all-star forward and CH2M Hill’s “juice guy” at the DWP, Bill Bridges, a consultant. Sources say Bridges urged CH2M Hill to contribute to Gewe’s church charity, but the company would not confirm any contributions. Bridges could not be reached for comment.

CH2M Hill has upgraded its connections. Coles says he is thinking of retiring. The company has hired Villaraigosa’s former council deputy chief of staff Linda Waade to serve as “client services manager” in the company’s L.A. office. Waade brings another advantage for any contractor trying to hold on to DWP business: She worked with DWP board president Mary Nichols to raise funds for Villaraigosa’s first run for mayor. Waade, sources who know her say, is an old friend of Nichols. Both are environmentally and politically active. Waade did not return calls for comment.

Out on a mission of good will, Deaton and deputy mayors Sutley and Washington ducked questions about the dust project’s shallow flood zone, which has only small amounts of vegetation and uses 50,000 acre-feet a year of L.A. Aqueduct water. Sutley said that Villaraigosa had not been briefed nor had he asked to be briefed on the water usage in the Owens Valley that has been required as a result of decades’ worth of environmental damage. Washington declined to elaborate on the mayor’s policies for the DWP or its presence in the Owens Valley, even though the dust-mitigation project is driving proposed rate increases for L.A.