Outside, Looking In
Ratepayers are SOL if the current desal project proceeds.
Thursday, July 14, 2011
Robert Louis Stevenson once wrote that Monterey’s Spanish landowners lost their property to unscrupulous Yankees because, unlike Americans, they had not been raised “to understand all business as a competition in fraud.” To the extent that today’s Peninsula residents have been willing to believe that Cal Am, Marina Coast Water District and the Monterey County Water Resources Agency have had their best interests at heart in developing a regional desal project, they may have made a similar mistake.
The operating agreements this coalition put together and shepherded through the California Public Utilities Commission approval process last year lock the Peninsula’s Cal Am ratepayers into what may be the most one-sided deal since the purchase of Manhattan for colored beads. Under the agreements, Marina Coast Water District will build one of the least cost-effective desal plants ever proposed on the planet, with Peninsula ratepayers paying not only the ridiculously high cost of the desalinated water actually delivered to them, but also nearly the entire cost of the water delivered to Marina Coast customers. This arrangement leaves Marina Coast no real incentive to prevent costs from spiraling even further out of control.
In addition, Peninsula ratepayers will have no control over the plant’s operation, and no means of questioning its costs. Even the weak protection of CPUC oversight has been eliminated. Worse still, legal questions over water rights may prevent the project from delivering the full amount of water needed to offset the illegal over-pumping of the Carmel River.
“THE OPINION APPROVING COLLINS’ DUAL ROLES WILL JOIN JOHN YOO’S TORTURE MEMOS IN THE ANNALS OF CREATIVE LEGAL WRITING.”
Given these problems, not everyone has been disappointed to see a scandal break out that could render the operating agreements invalid, and open the door to a more reasonable deal for the Peninsula. The ratepayers’ unlikely savior may be Steve Collins.
By simultaneously serving as a board director of the Monterey County Water Resources Agency and as a (remarkably well-paid) consultant for RMC, a private firm with deep financial interests in the desal project, Collins may have violated conflict-of-interest laws seriously enough to void the agreements he helped craft.
Collins claims the leadership of both the County and Marina Coast knew of and approved what he was doing, and that county counsel had even approved his dual role. Only problem is, they may never have actually shown him the written opinion, or he may no longer have a copy – or something. In any case, no such legal opinion has yet been made public and, frankly, it’s hard to imagine how such a blatant conflict could be justified. The opinion, if it does exist, will surely find an honored place, together with John Yoo’s torture memos, in the annals of creative legal writing.
The County Supervisors have denied any prior knowledge of Collins’ lucrative consulting contract. They also commissioned a report expressing concern over the viability of the operating agreements, and throwing some well-deserved blame onto Marina Coast General Manager Jim Heitzman, who was (at best) aware of Collins’ activities from the start.
For months, Marina Coast reimbursed RMC for Collins’ work, so they can’t deny having known what Collins was up to. But they’ve hit back at the county by revealing the deeply embarrassing fact that MCWRA General Manager Curtis Weeks formed a private consulting firm with Collins at the start of the CPUC process. The company’s purpose: to contract with Weeks’ own agency to manage the county’s portion of the desal project.
But the main point Marina Coast wants to make, and the centerpiece of the investigation they commissioned to compete with the county’s report, is that the operating agreements are untouchable because the 60-day period for challenging them has passed. Doesn’t matter if the contracting process was illegal (and they acknowledge it probably was). Doesn’t matter if Marina Coast facilitated that illegal process. Since they got the contracts finalized, and no one found out and filed suit within 60 days, the Peninsula ratepayers are now locked into heavily subsidizing Marina’s water for the next 94 years. Or so they hope.
For the sake of the ratepayers and the river, I hope the county can and will extract itself from the current operating agreements. Marina Coast has proven, if nothing else, that they lack the competence to manage a public project of this scale. The river and the ratepayers need a real solution. And until the people in charge are 100 percent dedicated to providing one, and not distracted by the happy prospect of feathering their own nests, the Peninsula’s water problems will likely remain unsolved.
KEITH VANDEVERE is an attorney and Monterey County planning commissioner representing District 5.