water district meeting

Among the public speakers at the April MPWMD presentation was Kate Daniels, former chief of staff for District 5 Supervisor Mary Adams, chair of the district board: "We are willing to take the risk for a future where oversight of this utility is through an elected board of directors that is accountable to the public," Daniels said. "This is a cause for celebration."

In November 2018, when voters on the Monterey Peninsula approved Measure J with 56 percent of the vote, they gave the Monterey Peninsula Water Management District a mandate: buy out Cal Am’s local water infrastructure, and become the Peninsula’s new water supplier—if feasible. 

The feasibility of the buyout was affirmed by the district’s consultants in 2020, but there was a hiccup thereafter—the district asked the Local Agency Formation Commission of Monterey County to activate the district’s “latent powers” to become a retail water provider. Despite LAFCO staff’s recommendation to grant the district such powers, the board voted against it. The district then sued LAFCO over the denial, and the litigation continues. 

However, MPWMD General Manager Dave Stoldt has long maintained that the district doesn’t need LAFCO’s blessing to forge ahead, just that it could make things easier in the buyout process. But when it comes to water in Monterey County, nothing’s ever easy aside from pumping. 

So the district was going to move forward regardless of LAFCO’s determination, and on April 3 at Monterey City Hall, the district revealed its appraised value of Cal Am’s system, their first offer in the attempt to buy out the private water utility: $448,808,000. 

Before explaining the methodology behind the appraisal, Stoldt said the offer had been transmitted to Cal Am a few hours earlier—though Cal Am was not, and still is not, for sale. 

Perhaps more revealing than any of the explanations behind the valuation number was a graph put up on the PowerPoint presentation which showed the values other public agencies, from across the country, placed on private water utilities they were attempting to buy out. In every case, the final value was closer to the appraisals of the public agencies, not the private utilities. 

Evan Jacobs and Josh Stratton, who handle communications for Cal Am, won’t offer a number for the company’s own appraisal of its Monterey system. But they, along with Cal Am attorneys George Soneff and Joe Connor, say the attempt to buy out Cal Am’s system is misguided and will end in defeat. 

Soneff called it “stillborn” if it ends up in court. The three also stressed the lengthy legal process, in the event that an eminent domain attempt is allowed to proceed in court. 

“These things take years,” Soneff says. “It’s just a shame—so much taxpayer money will be spent removing a well-regulated taxpayer utility. It’s not in the residents’ interests.”

The Cal Am ratepayers attending the presentation—many of whom have been attending public water meetings for years—struck a different tone. 

Nearly all of them lavished praise on the district’s staff in keeping the process moving ahead, and many offered one-liners that excited the crowd. 

Sylvia Shih, a Seaside resident, told the district’s board: “If we ratepayers can afford to pay Cal Am, we can afford to buy it out.” 

Stoldt says that financing plan for the buyout won’t require raising rates, adding that the buyout would theoretically decrease rate increases in the future. 

Going forward, the district board will have to approve a resolution of “necessity” to formally begin the eminent domain process which, if they opt to go that route, likely won’t happen until July or August.

(1) comment

Derek Dean

Wow, a hardy congratulations to all those involved in keeping this moving forward.

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