Was solar project a sell-out?

Cyndee Johnson makes no bones about it. In both an email and a hand-delivered letter to this paper, she spells out her beef with the Chico Unified School District.

The district, she says, formed a sleazy relationship with a Bay Area company when it signed a contract for solar projects on five school sites. Not only did the district not choose a local contractor, it now stands to get “kickbacks” from SolarCity, the company with which it entered the unholy alliance.

“Our community deserves better than this,” Johnson writes. “We pay taxes, educate our children in this community, buy products and support the very basis of Chico. How dare the Chico Unified School District hop into bed with a company, who I must add can offer nothing which is not available right here in our community at the same price (when fairly bid).”

Johnson, who works for a local branch of a company called United First Financial, accuses SolarCity of not paying prevailing wages and as such being able to underbid the other three companies that made offers last year.

Those companies were Borrego Solar out of San Diego, DRI Energy/Enfinity of Oakland and the lone local entity, Chico Electric.

“I am a professional business woman in our community and understand that competition should and does exist,” Johnson writes. “I also smell a rat. Under no circumstances should this community stand by while the very institution we are supporting forms an allegiance with another community.”

Up until last month there was no state requirement for the payment of prevailing wages, which are based on the hourly rate paid on government-funded projects to a majority of workers in a specific region of the state.

In October Gov. Jerry Brown signed Senate Bill 136, which requires prevailing wage for workers constructing renewable-energy-generation and energy-efficiency-improvement projects on public property.

But just last year the Department of Industrial Relations (DIR) said that work performed in connection with a private-power purchase agreement, whereby a private entity—in this case SolarCity—constructs and owns a renewable-energy project, is not subject to prevailing-wage requirements.

According to the contract, SolarCity constructs the solar systems and for the next 20 years owns and operates them, selling the power produced to the school district. There is a provision that gives the district the option to buy the systems should it want to in the future.

“There are parts of what she says is true,” said Mike Weissenborn, the CUSD director of facilities and construction. “But not the kickback part.”

The part about the company being from out of town is true, he said, and the wages paid may have been less than prevailing because at the time of the bids there was no law in place requiring such wages for a solar project.

The “kickbacks” she refers to are deals whereby area residents who sign a contract leasing or purchasing a solar project for their home will get a $1,000 break and the school district will get $400 for making a referral.

Julie Kistle, spokeswoman for CUSD, explained there are five separate contracts for five district sites: Pleasant Valley and Chico high schools, Hank Marsh Junior High, Chapman Elementary and the district’s corporation yard.

“Each site has a different rate schedule based on the size of the project,” she said. “We do not pay SolarCity for the system—we purchase power from them.”

She said the company did hire some local labor, including Santos Excavating for some of the grading and Holdrege & Kull for soil compaction tests.

“We have encouraged them as much as we could to use local workers and referred them to local companies,” she said. “We try really hard to spend our dollars wisely and strike a balance.”

SolarCity’s proposal, according to the CUSD website “results in a 20-year net benefit to the District of approximately $3.5 million.”

It goes on to say that SolarCity has an impressive history of successfully implementing solar projects at various California K-12 facilities.

“The process was very transparent,” said Weissenborn. “They build the system and lease the power.”

The firm that arranged the contract bid process was also from the Bay Area, to which Johnson also objected.

“We didn’t have in-house firm that could do that,” Weissenborn said. “It was all based on a San Francisco consulting service. They were an appropriate resource to understand the opportunity available and create a level playing field.”