Agency Rules No Conflict in Castaic Votes

A state agency has ruled that four top officials of the Castaic Lake Water Agency did not violate conflict of interest laws in a series of decisions affecting the region’s largest developer, even though each had financial ties to that company.

The decision by state Fair Political Practices Commission staff members normally would close the investigation. But the two elected officials who lodged the original complaint said Tuesday they plan to ask the FPPC to reopen the matter, claiming some of its findings were in error.

Castaic General Manager Robert Sagehorn disclosed Tuesday that he and his wife sold their $3,900 worth of limited partnership shares in the Newhall Land & Farming Co.--holdings that formed the heart of the case--in October, a month after The Times reported the Newhall Land interest.

“We are pleased that they’ve viewed this in a manner which we believe is correct,” Sagehorn said, reacting to the FPPC’s notice.

Asked why he had decided to dispose of his Newhall Land investment, Sagehorn said only, “I just decided it wasn’t worth all the hassle.”

The Times reported in September that since 1992 Sagehorn and three other water agency officials had helped shape millions of dollars of agency projects that potentially benefited the large developer while continuing to maintain financial ties to the company.

FPPC officials confirmed Tuesday they opened an investigation into the issues outlined in the article. But two Castaic water agency critics--Newhall County Water District board members Ed Dunn and Lynne Plambeck--also filed a formal complaint at the time seeking an investigation.

At issue were three main projects: Castaic water agency grading of a rough road, valued at $3 million, through Newhall Land property; the planning of a $4.2-million reclaimed water system that would exclusively serve Newhall Land projects, and relocating a major water line from under a commercial site that Newhall Land later developed.

Sagehorn, as the top executive of the water-wholesaling agency, played a key role in each of those issues. The other officials--current agency board members Robert DiPrimio and Richard Green and former board member Stephen McLean--had lesser roles. All four maintained they did nothing wrong.

In a May 14 letter, FPPC Enforcement Division Chief Darryl East told the water agency that he found no basis for legal action. Thus, the FPPC “has determined to close this matter without further enforcement action,” East wrote.

In an interview, East said the road-grading project, which Sagehorn spearheaded and McLean voted on as a board member, did not appear to pose a legal conflict because East said the work’s value to Newhall Land appeared to be speculative.

East said the reclaimed water proposal, which Sagehorn presented to board members in August, did not appear to pose a conflict because East said Sagehorn only gave a “status presentation” and the board members did not take a formal vote.

On the water-line relocation, recommended by Sagehorn and voted on by each of the three board members, East said the easement where the agency’s pipeline originally ran is still owned by the water agency and thus “would have no material financial effect” on Newhall Land.

Dunn and Plambeck disagreed with the FPPC’s factual analysis and vowed to ask the FPPC to reopen their inquiry. “If you lose, that’s one thing. But if you lose and the information’s not correct, that’s really upsetting,” Dunn said.

For instance, Plambeck maintained the road grading done by the agency would be key to any future development plans Newhall Land would undertake for its surrounding property. Also, she said the water agency is now proceeding with its reclaimed water plan based exactly on the design Sagehorn had recommended.