County and Cal Am Reach Settlement on Desal Project
December 4, 2012
One down, one to go: A dispute between California American Water and the Monterey County Water Resources Agency over contracts and expenses for the Regional Desalination Project has been resolved, officials announced Tuesday.
"Recouping important costs expended by the Water Resources Agency is a key component of the deal," County Supervisor Simon Salinas said in a statement.
Cal Am agreed to forgive a $1.9 million loan to the county, and to pay an additional $1.5 million; of that, about $700,000 will be set aside in an account for the county to pay outstanding bills to subcontractors on the project.
County Counsel Charles McKee says the exact amount the county asked for is confidential, but says the settlement agreement is about equal to what he believes they were owed.
The county gave a little ground on policy matters, agreeing that its existing ordinance requiring public ownership of a desal plant would not apply to Cal Am's new proposal, which bypasses a public partner on the desal portion of its future water supply plans for the Monterey Peninsula.
The county agreed to drop its lawsuit over the ordinance, which is pending in San Francisco Superior Court. The California Public Utilities Commission had already determined that the ordinance doesn't apply to Cal Am's proposal.
But on Nov. 30, both the county and Marina Coast Water District (the would-be third partner in the project) filed a request for a rehearing on the PUC's decision slapping the public ownership rule.
"The ordinance as it applies to other projects would still be in effect because we don’t think the PUC can declare an ordinance unconstitutional preemptively," County Counsel Charles McKee says.
Cal Am agreed to pull water for desalination from the shallow aquifer, instead of its preferred deeper water source, the 180-foot aquifer. North Salinas Valley agricultural interests have been opposed to withdrawals from the deeper aquifer, citing water rights.
"We're pleased to be able to put these disputed items behind us," Cal Am President Rob MacLean said in a statement.
There are still pending, unresolved claims by the county by Marina Coast Water District against each other.
As far as negotiations with contractors, which include RMC Water and Environment (the Walnut Creek firm that hired former county Water Resources Agency director Steve Collins who's been charged with conflict-of-interest felonies related to the desal project), McKee says, "Our position is that we don’t owe any contractors any money."
The county is in talks with other parties to the desal project, but McKee would not specify whether RMC is one of them.
For more on the desal saga, visit www.mcweekly.com/desal.>