Third time does the harm.
After first failing to approve the Monterey Peninsula Water Management District’s application to become a retail water utility in December, then actively denying the request in January and finally voting 5-1-1 against a reconsideration on Feb. 28, the Local Agency Formation Commission of Monterey County, or LAFCO, has blocked the public from the path of least resistance in their democratically-approved effort to buy out California American Water.
The votes against the buyout remained steady with Commissioners Chris Lopez, Mary Ann Leffel, Pete Poitras, Matt Gourley and Kimbley Craig voting to deny the reconsideration. Commissioner Ian Oglesby, mayor of Seaside, voted in support and Commissioner Wendy Root Askew, county supervisor for District 4, abstained.
Even the largest supporters of the public takeover, approved by voters in 2018, knew this path eventually would lead to court; however, most imagined “court” as the ultimate eminent domain legal battle between MPWMD, the agency leading the buyout, and Cal Am.
Instead, Monday’s decision essentially confirms that the first legal battle will be the water district’s lawsuit against LAFCO—an attempt to overturn the agency’s denial. As of Feb. 28, no lawsuit has been filed, but MPWMD General Manager David Stoldt says the district and his board plan to act quickly in initiating the court battle.
“The motivation will be trying to answer to the voters who said, 'go do this,'” Stoldt says. “Just because you get one poorly thought-out, adverse decision, doesn’t mean we’re in a position to tell the voters we’re packing up our tent.”
The water district and supporters of the buyout have criticized some of the motivations behind the LAFCO denial as personal and political as opposed to objective and evidence-based. On this basis, the district requested three commissioners recuse themselves from the Feb. 28 decision to reconsider MPWMD’s application. Gourley said publicly his no vote was influenced by his personal belief that the public sector was inept; Poitras said he voted no because his district, the Monterey County Regional Fire District, was estimated to lose $140,000 by Cal Am being taken off the tax rolls; Leffel was an active and vocal opponent of Measure J.
However, the bar to overturn LAFCO’s decision will be high. LAFCO counsel Kelly Donlan said Monday that the rationale behind Commissioners Gourley, Poitras and Leffel’s no votes were legally sound and they did not have to recuse themselves. Donlan explained that LAFCO’s decision on MPWMD’s application was a “quasi-legislative policy decision” and not a quasi-judicial decision, a distinction which gives the commissioners a longer leash to base their votes on personal or political motivations.
Stoldt says the water management district could choose to move down a parallel path: sue LAFCO and make an offer to buyout Cal Am, triggering the eminent domain proceeding. Stoldt has said that having LAFCO grant the district its power to become a water retail utility strengthens the argument in the eminent domain proceeding, and it’s likely that the LAFCO lawsuit would wrap up in time for the meat of the arguments in the eminent domain case.
However, Stoldt says the district could argue that it already has water retail utility authority as it sells irrigation water to local golf courses.
In any case, Stoldt says, he doesn't expect to see any action on the matter for at least a couple of weeks