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Fewer than 15 minutes later Maxfield wrote to Farris separately, "About our short talk yesterday afternoon, I was glad that you came by and told me not to do the transaction the way Craig wanted me to do it. However, when you asked me to destroy the e-mail I sent you, I don't think that was proper."

Later in the morning Maxfield got back to his confidant Levin. "Just wanted to let you know," he wrote, "that my last e-mail to all the parties caused quite a conversation. Jack is now aware of the fact that I had lunch with you yesterday and that I have sent you the e-mails. He wants to make sure the right thing is done."

"Brett, we are doing some fact finding on this," replied Levin 30 minutes later. "At this time it does not appear that [the Water Department employees] are being 1099'd or W2'd for these [housing] agreements. However, I haven't chatted with my payroll manager about it yet. The gift of public funds is another issue all together."

But Brett Maxfield tells me by phone that if the City refuses to do the proper tax reporting because it sees only the reservoir keepers' salaries as a return for services, then "the discounts they receive in rent are gifts of public funds." (Levin does not return my voice mail message asking whether the payroll manager confirmed his suspicions concerning taxes.)

That afternoon, December 23, the Water Department's Yackly replied to Maxfield's message, copying the e-mail to Gibson and Farris. "All," he addresses them, "the intent here is to continue with the past practice as it relates to the rental of these dwellings by the reservoir keepers. We would like eventually to firm up the duties and expectations of the employees that come with living in these dwellings, but that I expect will take some time and would include the appropriate involvement of Labor Relations. In any event, past, present or future rental arrangements should reflect the proper handling of any tax implications."

On December 27 Maxfield confided further in the auditor's Greg Levin. He starts by inquiring "who I should talk to in Personnel about the events of last week. Although Jack told me not to fear retribution from Craig, I don't believe it. This morning I got a memo from Craig taking me to task on my Verizon accounts. I am confident that my Verizon accounts are being handled correctly and that Craig has acted quickly to find something to point the finger at me for. Nevertheless, I told Jack that I should not have to work under Craig after having to go around him twice in matters involving moral turpitude. However, as of now, Craig is still my supervisor, and I believe he has it out for me. I was warned by another property agent who works under him to watch out Friday after the lively talk Craig, Jack, and I had in Jack's office in response to the e-mail I had sent.... I also recounted that Craig had told me about how many times he has compromised while working for the City because it was politically expedient and that I should follow in his steps. Any advice? Do I need to involve the City Attorney? I went down to Personnel, but it is closed all week."

The next day Maxfield contacted Conway Bowman, the employee who wanted to rent the Lake Hodges house. "Please read the attached from Charles Yackly. Is it your understanding," wrote the property agent, "that the difference between fair market rent and the $255 you are going to pay is not to be included as part of your salary? From our conversation just now, it seems like there has been an agreement made which makes the house a duty for you to live there. I agree it should not be included in your salary, but I need to work with auditors to make sure we account for things correctly."

Twenty minutes later Maxfield addressed Levin to explain what he had learned. "I have attached some pictures of the dwelling and the dam which it is near," he wrote. "According to Conway, the labor union negotiated a deal where he is only to pay $255 to live there. I guess they expect the rest of the value is to be attributed to it being a public facility that it is his duty to be stationed at, just like my desk space on the seventeenth floor. I am getting an appraisal of the fair market value for rent of the property. I am guessing $255 is about 20 percent of this. I could write up the lease stating that 80 percent of his time at the house is considered a duty of his job as a dam keeper and thus not part of his salary, which is what seems to be his understanding of the arrangement. Thus, he only pays for the 20 percent of the time he spends there for personal use. Does this make sense? Is it a valid arrangement from your office's point of view?"

Then Bowman wanted to know about another detail. "I read the attached from Charles [Yackly]. Is he saying that the rents will stay the same, but I'll be responsible for the taxes?" Bowman also took the opportunity to make his case further. "Living on station is a part of my duties as a reservoir keeper," he wrote. "I'm responsible for the protection of the resource on a daily basis. I'm in essence on call 24 hours per day. Because of this responsibility, the keepers have always paid a greatly reduced rent on all the reservoir houses. Hence the $255 per month at Lake Hodges. I believe this issue was taken up with labor relations and it was determined that the rents were not going to be raised."

"I understand," Maxfield replied. "I just need to work with auditors to write up the lease in a way which reflects this arrangement correctly." That was December 28. On January 19 Bowman asked, "Any progress on the house lease at Lake Hodges?" Maxfield replied that he was waiting for the appraisal. He didn't get it until February 8, when he wrote Bowman, "The appraisal is $1300. I will write up the lease to attribute $250 to your personal use and the remainder to facility use. You mentioned that this is what was negotiated between labor relations and water management, correct? Is there any writing concerning this I can reference in the lease? If not, can you tell me when this agreement was reached and who the key decision makers were? I want to reference the agreement in the lease."

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