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By Hans Boyle | Corvallis Gazette-Times (TNS)
HARRISBURG, ORE. — A top Harrisburg city official violated ethics rules by living at the city's wastewater facility for the last four years, the state body tasked with looking into ethics complaints about public employees determined last week.
The finding comes on the heels of an Oregon Government Ethics Commission investigation that looked at whether Harrisburg Public Works Director Chuck Scholz used his position to benefit himself by living in a recreational vehicle, rent-free, on city property near the city's sewage treatment lagoons.
City officials, including Scholz — who makes over $100,000 a year — contend he's been saving the city money by living at the site and protecting the water system from potential terrorist threats, citing federal rules on securing critical infrastructure.
But according to the investigator on the case, Scholz was still engaging in a prohibited use of office because no one else was afforded the same opportunity and because his current living arrangement wasn't included in his compensation package, at least between 2019 and the end of 2023.
That's the period of time during which Scholz was living at the site before Harrisburg's city administrator Michele Eldridge tweaked his job description and drafted an internal city "caretaker" policy to officially reflect his residence at the wastewater site.
Commission staff, however, questioned whether Eldridge had the authority to make those changes herself which, in an email to Mid-Valley Media, she continued to maintain she did.
Still, she said, she will ask Harrisburg city councilors to formally adopt both the internal policy and amended job description at month's end to show the elected leaders are OK with Scholz's living situation.
Scholz, in his often-pointed responses to the investigator's inquiries this past spring, has said his presence at the facility has always been for the betterment of the community, not for financial gain, and previously called the complaint filed last November that sparked the ethics investigation an attack.
Harrisburg city officials, including the mayor, also wrote letters vouching for Scholz's service and character, while criticizing the commission's investigation.
Scholz declined to comment to Mid-Valley Media. He told the state its investigation subjected him to ridicule in the press and social media and "un-professional" (sic) phone calls.
The ethics investigation sprung from a complaint filed by Harrisburg resident Alan Collision last November, expressing concern Scholz was residing at the city's wastewater site on riverfront property on the public dime.
For context, that riverfront property hosts two 9-acre primary facultative lagoons, two 4-acre secondary facultative lagoons and two 1-acre submerged rock polishing ponds, according to the city's website.
In his response to an ethics investigator's questions in April, Scholz said he moved to the site in his RV in 2014, soon after being hired in his current position and remained till around May 2015, before moving to a different residence. That was with the approval of Harrisburg's then-city administrator Brian Latta, Scholz said.
He added, to his best recollection, he moved back to the site in the summer of 2019 to help the city meet federal security requirements for water systems.
The issue of Scholz's residence at the wastewater treatment facility bubbled to the surface a few years later, when Collison first inquired about Scholz's RV at the treatment plant, which is just off Peoria Road about 1 1/2 miles north of the city.
At an April 2023 council meeting, Eldridge informed members that her predecessors, including Latta, had OK'd the arrangement, and that she signed off on it too.
Eldridge said Scholz provides security at the site, helping comply with the America's Water Infrastructure Act of 2018, which requires such facilities be fenced or patrolled. A month later, at a May 2023 council meeting, she told members that installing a 6-foot fence around the property would cost the city more than $213,000 and be an unaffordable expense for a strapped city budget.
At the same May meeting, however, Harrisburg's city attorney, Jim Brewer, underscored the need for an agreement on the books for Scholz's living arrangement and said the city should be charging rent, which could be as little as $1 per month.
But that rental arrangement wouldn't materialize. Instead, Eldridge drafted a caretaking policy that outlined Scholz's responsibilities in keeping the site safe from trespassers and allows him to stay on the property, rent-free, for his services.
In her own responses to commission staff questions, Eldridge said she opted for that route because Scholz's situation complied with recent Internal Revenue Service rules for businesses providing lodging for employees.
For some perspective around the mid- Willamette Valley, no staff is living at any of Albany's treatment facilities, according to Albany's Public Works Director Chris Bailey, and those sites are secured by fencing, locks and alarms connected to a computer system.
According to Corvallis' public information officer, Patrick Rollins, there are no full-time personnel living at the city's wastewater reclamation plant either, but there are two full-time plant operators who live at the Rock Creek Water Treatment Plant outside of Philomath, whose residence at the facility is part of their compensation package and job description, though they do pay utilities.
Eldridge said Scholz takes care of his utilities too and isn't connected to any water or sewer service at the wastewater site; he uses solar panels for power.
Despite that, and despite his and city officials' assertions that he's protecting the area, the commission moved forward with an investigation earlier this year, looking into whether Scholz's living arrangements violated Oregon's prohibited use of office rule, which bars public officials from using or attempting to use their position to obtain a financial benefit or detriment — in this case, free lodging.
They also looked at whether that arrangement put him in a conflict of interest and whether he failed to alert the public to it.
Ultimately, ethics investigator Daniel Pacheco recommended the commission find Scholz made such violations, a recommendation they approved at its most recent meeting on June 28.
Throughout the investigation, Scholz maintained he was providing federally required security at the site, and that his move came about through informal conversations with Latta back in the summer of 2019 or thereabouts.
He said he had previously been residing and offering similar security services at Legacy Valley Farms in Harrisburg, owned by Kurt Kayner, a member of the Harrisburg Planning Commission.
In fact, according to a letter of support for Scholz submitted to the commission by Kayner, Scholz had been living on his farm for a year prior to his move to the wastewater site to prevent vandalism and theft when Kayner was away during business trips. Kayner also didn't charge rent.
In his email responses to the commission staff, Scholz said he looked forward to returning to that farm or another farm operation, once Harrisburg's wastewater facility developed security features that would bring it in compliance with federal rules, writing it was "NO garden spot next to 30 million gallons of other people's feces, I can tell you that!"
According to the investigation report, commission staff originally presented Scholz with a stipulated final order earlier this spring. That's basically a settlement agreement that puts an ethics matter to rest and can include a letter of education and in some cases a fine.
In this case, according to Pacheco at the June 28 meeting, the proposed fine was $5,000, a settlement Scholz didn't take.
Scholz was still "dumbfounded" an official investigation was underway, he said in a response to commission staff inquiries in April, adding that small communities were "just trying to meet regulations in their own unique ways and do the best they can do."
"This was our solution," he wrote, "and I get attacked for it."
He also took issue with statements from former Harrisburg city administrator Latta, now the city manager for Dallas, Oregon.
According to the investigation report, Latta had told commission staff Scholz had approached him in 2019 about living at the lagoon facility until he could find a permanent residence, as he was living in his RV following a separation with his wife.
When asked in an email by the commission investigator if that was the reason he moved to the site, Scholz said the statement was "totally incorrect" and that his divorce was never a factor. He also said the topic only came up because of the commission investigation and the resulting newspaper coverage.
"What a bunch of B----T and that's my official response," he wrote.
Harrisburg city officials, including Eldridge, some city councilors and Mayor Bobby Duncan, also had choice words for the commission, sending letters supporting Scholz that were also critical of the investigation.
In his letter, Duncan said the Harrisburg resident who made the complaint hadn't used all of the avenues of recourse before contacting the commission and claimed the investigation had caused some citizens to lose trust in Harrisburg city staff — and elected officials to lose trust in their state governing bodies.
"I have personally found the whole process cold, ineffective and incredibly unprofessional," the mayor wrote.
In her letter, Eldridge expressed similar sentiments, writing she felt like the city was "completely overridden by another public agency in further erosion of home rule."
Eldridge had told Mid-Valley Media previously she believed the city's caretaker policy, finalized on Dec. 29 after the original complaint was filed in November, would show Scholz's situation meets an exception to the prohibited use of office rule, which doesn't apply to "any part of an official compensation package," meaning wages and benefits approved by a public body.
However, commission staff questioned whether Eldridge had the authority to make those changes without full approval by the council, and asserted that regardless of whether she did, Scholz still hadn't paid rent before such a policy was on the books.
At the commission's June 28 meeting, Scholz appeared remotely to give his two cents on the investigation report, reiterating that he's been living on the site for security purposes, calling the investigation biased in his opinion, and claiming that because he wasn't paying rent where he was previously, he hadn't received a financial gain from moving to the wastewater site.
He also told commissioners it was taking a "bit longer than expected" to get security infrastructure at the site, but that he was looking forward to moving back to Legacy Valley Farms where he'd have full utilities and wouldn't have to deal with the smell of sewage.
Finally, he said if he weren't at Harrisburg's wastewater facility, the city would be facing fines with regulatory authorities over safety concerns.
"So, I don't think it's a very strong complaint," he said.
Nevertheless, the commission approved the investigator's recommendation, teeing up a final settlement offer for Scholz, though upon receipt of that offer he could opt to challenge the ethics charges in a hearing.
While saying he saw a clear technical violation in the case, the commission's chair, Shawn Lindsay, did express some reservations.
"Candidly, I feel bad saying this guy violated something when he had an oral agreement and he proceeded on it with an understanding from a public official," he said, adding that he also would be amenable to a more lenient fine.
Commission Vice Chair David Fiskum agreed, saying the previous proposed fine struck him as "fairly hefty," considering the situation could be remedied fairly quickly if the local government "gets it act together," and officially ratify Scholz's updated compensation package.
According to the commission's executive director Susan Myers, staff were currently working on drafting a proposed final order and that in most cases, folks take that settlement, rather than opting for a hearing.
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