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In houses only minutes from their jobs, reservoir keepers remain on call 24 hours a day. Who would begrudge them the low rents they pay the city? I ask keeper Diane Dine what it's like to be stuck day and night at Sutherland Reservoir, northeast of Ramona. She has a daytime office at the reservoir's public-access docks, and her city-owned house sits on Sutherland Dam Road, west of the lake and several hundred yards above the dam. "I wouldn't say I'm stuck," says Dine, who has worked at the lake for nine years. "I like it out here."

After another keeper, Joe Hughes, vacated the Lake Hodges city-owned house in early summer 2004, San Diego Water Department acting director Charles Yackly received a recommendation to almost double its rent. In a June 22, 2005, e-mail to Yackly, the Real Estate Assets Department's Diana Drake wrote: "If the new reservoir keeper wants to rent it, or if the water department has another employee for that property, please let me know, so that I can start preparing the lease. I haven't seen the house yet, but the current rent is $255 and if we rent it to another reservoir keeper, we should increase the rent to at least $495 per month.... This is still substantially below market."

Yackly returned Drake's e-mail after two days, referring to an existing Water Department plan to charge the reservoir keepers 50 percent of market value for their rents. He asked, "Does the $495 per month reflect 50 percent of the market?" The department soon realized, however, that all its reservoir houses were priced well below 50 percent of market value. Apparently to correct the situation, the department several months later, on October 5, produced a proposal to raise rents at seven of the houses. It recommended raising two Barrett Lake houses from $204 and $210 to $425, two Sutherland Dam houses from $208 and $300 to $450 and $550 respectively, and the Lakeside Pump Station house from $344 to $450. It also proposed pricing the San Vicente Dam house at $450 and the Lake Hodges house at $500. No one occupied the latter two houses at the time.

In December of last year the Water Department sought to put reservoir keeper Conway Bowman into the Lake Hodges house. Craig Gibson, supervising property agent at the Real Estate Assets Department, assigned employee Brett Maxfield to write up a lease for Bowman. Maxfield is an attorney and licensed real estate broker. The Real Estate Assets Department would fire Maxfield three months later.

E-mails and Water Department documents reveal that as property agent Maxfield began his assignment, he immediately clashed with his boss, Craig Gibson. The Water Department, despite its own internal recommendation, had yet to raise the house's rent to $500.

But to Maxfield there were more serious problems. In an early morning message on December 22 to acting real estate assets director Jack Farris, Maxfield wrote: "I spoke to Craig about this assignment yesterday after reviewing what is being asked of me. I brought up the issue that though this lease may have merit as compensation for exchange of services, the lease...on its face has an appearance of being a gift of public funds. The market rent on this house as of 2003...states that rent should be between $900 and $1,100, but I am asked to make it $255, about one fourth of market rent. This was the rate given in 1992. Nothing in the lease makes reference to this lease being in compensation for services of being a dam keeper and, according to Craig, this is done on purpose and that is why it is a month to month lease. I am not saying the substance of this transaction is wrong or illegal but it is not being done in a proper form in my opinion and I am not comfortable proceeding as I have been directed. I brought this up to Craig. He got mad and told me it is not my policy call and just do it, so I bring it to your attention and ask for direction as to how to proceed."

In the meantime, Maxfield sought an outside perspective. "Haven't seen you in some time," he wrote to Greg Levin in the city auditor's office. "Are you free for lunch today? I have something I would like to ask you about."

In the afternoon, the two exchanged e-mails discussing the previous Lake Hodges house lease of $255 between 1992 and 2004. Maxfield added that Jack Farris "spoke to me after lunch and told me to write up the lease so that it accounts for the rent being discounted in exchange for services rendered. I will assign a value to the difference. However, it is the water department that will have to sign the lease and make sure that the reduced rent is accounted for as to the employee's payroll. I will make sure that those in Water are made aware of this change...."

The following day, December 23, Maxfield sent a message to Craig Gibson and Jack Farris in his own department, to Water Department acting director Charles Yackly, and to several others. "Gentlemen," it began, "I have been asked to write up a lease for Conway Bowman for the house at Lake Hodges. It is my understanding that he will be a reservoir keeper and that the house will be part of his salary for exchange of services and that he will pay the other half of the rent from an automatic deduction from his paycheck.... I will include language in the lease which reflects this in the new lease agreement. The old lease agreement did not make any mention of this. I trust that Water will make sure the proper accounting takes place as to Bowman's salary since the property seems to be given him partly in exchange for services. I just want to make sure all parties understand. I don't want to be part of income tax fraud. Income tax fraud is a felony. I am going to ask Craig to authorize a request to get the property valued as to fair market rent by our assets acquisition people. The lease will be very clear as to what is being given to Bowman for his exchange of services."

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