Water board complaint gains steam

Prosecutor says charges against board chairman may have merit

JOHN DODGE, THE OLYMPIAN

OLYMPIA -- A conflict of interest charge against Thurston County Water Conservancy Board Chairman Nick Adams has merit, Thurston County Prosecuting Attorney Ed Holm said Monday.

The case involves a water rights transfer for Countrywood Estates, a 112-lot subdivision on 130 acres south of Lacey, proposed by Jackson Homes of Olympia.

Jackson Homes must buy and transfer water rights from another part of Thurston County to get permission to drill two wells that are needed to supply water to the houses.

In July, Adams recused himself from voting on whether to accept the Countrywood Estates application.

Adams said that a firm in which he is a minority owner, Utility Management Services, was negotiating to build and manage the water system to serve Countrywood Estates.

Former water conservancy board member Lanny Carpenter made the conflict of interest charge against Adams.

A well driller by trade and a community activist, Carpenter refused to vote to accept the application based on Adams' conflict, which left the application in limbo for lack of two votes.

One month later, at Adams' suggestion, the board adopted a new policy on a 2-0 vote -- Carpenter abstained.

The new policy allowed an individual board member to accept an application. At the same meeting, the Countrywood Estates application was accepted by the third commissioner, Bill Smith.

"They manipulated the process," Carpenter said of the other two commissioners.

Adams, president of Hodges Commercial Real Estate, an attorney and owner of water companies, said the whole case has been blown out of proportion.

Adams said he will continue to remove himself from anything to do with processing, denying or approving the water right transfer for Countrywood Estates.

"On a small board, with no staff or legal counsel, we're doing the best we can," Adams said. "We've done everything out in the open."

Holm's findings

Carpenter resigned from the board in December, but not before filing a complaint with the county prosecutor.

On Jan. 29, Holm responded with a letter to Carpenter and the conservancy board. In it he said:

- The state law establishing water conservancy boards delegates the authority to accept an application to the board, not an individual member.

- Adams' vote to approve the new application policy was, in essence, a vote to accept the Countrywood Estates application and constituted a conflict of interest.

"However, in light of the fact that the WCB (water conservancy board) is a voluntary board operating under a complicated and confusing statutory scheme, this office will not be filing any criminal charges in this matter," Holm said in a letter to Carpenter.

Holm on Monday called on the state Legislature to clarify who has authority to accept a water rights transfer application.

"I don't think Adams has acted correctly, but the statute is a mess," Holm said.

Carpenter took his case to the Thurston County commissioners Monday, urging them to remove Adams from the board.

"He's broken the trust you gave him when you appointed him to the board," he said.

The commissioners said they would take the matter up at a latter date.

Defining conflict

Simply accepting an application for review doesn't trigger a conflict of interest, Adams and Smith said.

"Lanny has his own opinion of what that statute means and I don't agree with it," Adams said. "If I made a mistake, I made a mistake."

Adams said he has no plans to resign, but will go back to polling the board on whether to accept an application.

Adams said the county prosecutor and state Department of Ecology need to offer clear advice on how water conservancy boards are to conduct business and what constitutes a conflict of interests.

"We're out here operating in the dark," Adams said.

Water is power

Processing changes or transfers of water rights should be left in the hands of Ecology, not citizen volunteer boards, said Karen Allston, executive director of the Center for Environmental Law and Policy.

"Our concern from the start is that developers would be stacking the boards," she said.

"These are quiet, obscure boards, but very powerful," Carpenter said. "Water is the single most important ingredient for development."

Adams said it's important to remember that conservancy boards were created to help developers and others secure existing water rights for their projects without waiting years for a Department of Ecology approval.

Project goes on

Jackson Homes applied for Ecology permission in 1998 to drill two wells on the project property to serve the homes.

Projects that use more than 5,000 gallons per day -- enough for six homes or more -- require a state water right to drill a new well.

Unable to get a timely decision to drill the new wells, Jackson Homes went shopping for an existing water right to buy that could then be transferred through the conservancy board.

The developer found existing water rights tied to the former Hofert Tree Farm in the Tumwater area.

They applied to the conservancy board for a change of use and transfer in early 2000. The application was accepted, but a final ruling was delayed by a September 2000 superior court ruling that forbids change of use of a water right from, for example, agriculture to domestic use.

The 2001 state Legislature amended the law to allow changes in how water rights are used.

So Jackson Homes reapplied to the board in mid-2001, only to have the Adams conflict of interests issue surface.

Meanwhile, Adams said the water system is under construction, even without the water rights secured.

Roads within the development also are being built, county senior planner Mike Kain said.

If the developer had water rights in hand, final plat approval from the county would be possible in two or three weeks, Kain said.

He said county project permits give Jackson Homes until October 2003 to secure water for the project.

Adams said the conservancy board is looking for a replacement to fill Carpenter's vacant seat. In addition, he may recommend expanding the board to five members to avoid the kind of gridlock that has occurred during the Countrywood Estates application.

John Dodge covers the environment and energy for The Olympian. He can be reached at 360-754-5444.

For related stories go to the South Sound section.

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