On Oct. 26, after preparing all day and night, Save Our Water went to bed feeling ready for whatever might happen at City Hall the following evening. We were so wrong.

We expected to speak at the City Council meeting in favor of an urgency ordinance that would have required a conditional use permit for beverage bottling plants in Sacramento. The new law would have made bottlers go through a public planning process and environmental review prior to project approval.

But while we were at City Hall that afternoon we discovered the city attorney now considered Nestlé vested. The proposed ordinance would be removed from the agenda and referred to the Law and Legislation Committee, though apparently some public comment and discussion would still be allowed that evening.

The meeting that followed was shocking, bizarre and confusing. Though it is virtually impossible to capture it all in a single article, what follows is our attempt to convey what happened at City Hall that night.

Facilities Permit Program and the Development Oversight Commission
Nestlé has been remodeling a warehouse at 8670 Younger Creek under the auspices of the Facilities Permit Program, a program designed to fast-track development in the city. The FPP speeds up the building process by allowing work to start on a project before building permits are issued. At the council meeting on Oct. 27, this program was suspended on the spot, when the city attorney declared that the program was illegal under both city and state building codes. This decision was made before the Nestlé issue was even addressed.

At the time of the council meeting, the Nestlé plant was under a stop work order which prevented construction until the permitting issue was resolved. At the meeting it was stated that Nestlé had, in fact, begun construction before any permits were issued, with a verbal approval from the city.

City Attorney Eileen Teichert said, "My office was unaware of this practice of allowing $2 million worth of work to go forward with a verbal approval rather than a building permit that's required under the city's code. But we do need to discuss that confidentially with Mr. Kwong."

David Kwong, Acting Director of Community Development had stated that the Stop Work Order was initiated because of the pending ordinance which may have affected Nestlé's ability to proceed with construction. However, public records of correspondence between Kwong and the city attorney's office obtained since the meeting indicate that city staff instead issued the order because of the probable illegality of the construction that had been taking place. Additionally, other public records indicate that the staff that gave the verbal authorization did not actually have the authority to do so.

What was not raised during the discussion was the origin of this practice, which becomes clearer through an examination of the Development Oversight Commission. The commission is stacked with developers (or, according to the commission's webpage, "building industry representatives") who use the commission to develop creative solutions to the barriers posed by the existing regulations.

Kwong is an ideal person to answer the city attorney's questions about this since he also sits on the commission. In their 2005-06 Annual Report, the Commission described the FPP program as significant progress toward streamlining the permit process, which is important since, as they noted, "If there is a single concept that represents the majority of the DOC and Development Services Department emphasis over the past two years, it is ‘process streamlining.'" The FPP program was the brainchild of City Manager Ray Kerridge, who modeled the program after one he implemented while in a similar role in Portland.

Another Development Oversight Commission project that was fortuitously revealed at the meeting but has received no attention since, was "phased permitting," which Kerridge almost defensively stated was allowed by a provision of the state building code, the only time he spoke on the Nestlé issue that evening.

In their 2008-09 Annual Report under the heading "Streamlining and ‘Getting the Customer to Success,'" the commission noted that the Development Services Department initiated the new program in 2008. It turns out, however, that phased permitting is not allowed under city law, which explicitly requires that single permits be issued for projects.

Despite the fact that Nestlé had been operating under the illegal FPP program and the illegal phased permitting program, and despite the fact that they had moved forward with Phase II and III work before those permits were issued, Mayor Kevin Johnson insisted that staff find a way for Nestlé to continue building. Making the building process as easy as possible for developers makes sense to Kerridge too, who in a 2007 interview noted that he prefers to view them as customers and understands the city's mission as one of "customer service," rather than "enforcers or regulators" of the law. This reasoning, however, begs the question: if city staff are busy "getting the customer to success," by apparently any, including illegal, means necessary, who is responsible for enforcing the laws?

Vested?
Whether or not the conditional use permit on the agenda that night would apply to Nestlé rested on a determination by the city attorney on whether Nestlé was "vested" in the project.

While at City Hall the day of the council meeting, we found out that the city attorney now considered Nestlé conclusively vested. This was quite a shock since the staff report, that was published about an hour before we departed for City Hall, stated that Nestlé was not conclusively "vested" in the project until they received their Phase II permit, which was not due to be issued until Nov. 10. From a legal perspective that meant Nestlé was not far enough into the project to avoid the requirements of this new law.

When asked during the council meeting why she had reached this determination, contrary to what had been published in the staff report, Teichert explained that if the bottler, "... has received a permit from the city and has engaged in construction pursuant to that permit, that then they would not be subject to a prospective permit requirement. But rather they would be grandfathered in under the prior system.

"So we spent a great deal of time trying to track down whether or not, indeed, work was performed pursuant to a permit. And ultimately we concluded that the Phase I permit was issued Oct. 7. Even though it was issued after we believe much of the work was already performed, it indeed did meet that criteria.

"And it is not something that we would want to, I guess have to justify why work was allowed to be performed prior to the permit issuance," Teichert said.

The audience broke into laughter at this last bit. Her argument that Nestlé should be able to avoid obeying any changes in the law because they had done substantial illegal building made no sense. She did not mention that we had brought the Nestlé bottling plant to the attention of her office and the council in a Sept. 8 letter requesting environmental review and a transparent public process. We never received any response to that letter and were left to ponder what would have happened if all this had been dealt with earlier.

Special Treatment
At this meeting the mayor made lifting the stop work order his first priority. The people that came to speak about problems with building a bottling plant in Sacramento were made to wait.

Johnson ordered the city staff to go into a back room with Nestlé's representatives and hammer out a deal to get them back to work immediately. When they all came out to announce the details of their back-room deal, Kwong stated that the city was going to "dedicate all of their resources into this effort" of getting Nestlé up and running.

Nestlé would be allowed to start work the next day under a partial building permit and continue under the FPP which, earlier, Assistant City Manager John Dangberg said was suspended indefinitely.

As astonishing as this turn of events was, the most shocking bit of news was the recommendation — made by Nestlé and accepted by city staff — that city staff would travel to Nestlé's plant in Cabazon to review the site design in order to approve the site design in Sacramento.

Rather than requiring Nestlé to submit and get approved a design for the plant here in Sacramento, they agreed to allow them to get approval and permits based on a different plant in a different city. The underlying principle of the building permit process in California is that when an entity wants to engage in building activity, they apply to the local government and submit plans that are reviewed and approved by the local government prior to construction. However, during the meeting, it became clear that one reason the subsequent phase permits had not been approved was because the plans had not yet been submitted to city staff.

Rather than wait until Nestlé had submitted adequate plans before allowing construction to proceed, the city agreed to look at another plant as a substitute for plans. While it seemed understood that a plan would be submitted at some point in the future it is worth noting that in addition to violating city code, this process violates the entire spirit of the permit process. Furthermore, allowing Nestlé to purchase access to city staff is ethically questionable. Over and over again the mayor asserted that the city needed to be "fair" to Nestlé. Is it fair to allow back-room deals and trips to southern California in lieu of the plans required by law?
 

Continued in Part II