Local Agency Formation Commission of Monterey County Chair Chris Lopez was one of five votes against the Monterey Peninsula Water Management District becoming a public water utility. 

Monterey Peninsula residents in 2018 voted with a more than 55 percent majority to initiate a public buyout of investor-owned water utility California American Water. On Dec. 6, an arcane local government board went against their own staff’s recommendation and effectively told the majority of Peninsula voters “no.” 

Now, the lawsuits begin. 

The nay vote by the appointed Local Agency Formation Commission of Monterey County does not end this yearslong and politically divisive effort to acquire the Cal Am water system; however, it will create significant delays. The commission voted against activating the powers of the Monterey Peninsula Water Management District—the public water distribution agency that is leading the acquisition of Cal Am—to become a water utility in a 5-2 vote. Dave Stoldt, general manager of the MPWMD, says not having that power weakens their position in the eminent domain court proceeding likely required to buyout Cal Am—an eminent domain case Cal Am claims would be the largest in California history. 

“I think whether we have those powers would heavily impact the judge’s decision,” Stoldt says.

Stoldt says the five commissioners who decided against activating the water district’s power went rogue and called the vote “a slap in the face” to LAFCO’s staff who spent months building their recommendation to the board to vote in favor. 

Commissioner Chris Lopez, the District 3 representative for the Monterey County Board of Supervisors, said he was concerned with how a buyout of Cal Am’s Peninsula system would impact five satellite Cal Am systems that serve smaller communities such as Chualar and Corral de Tierra. These five satellite systems would remain under Cal Am and the utility has argued that the cost to serve these systems could potentially increase if the Cal Am loses the Peninsula system, which provides an economy of scale that allows satellite system costs to remain low. 

However, neither side could resolve the question mark around the hypothetical argument. Lopez said he was not comfortable moving forward without that answer. 

Commissioner Pete Poitras positioned his no vote around his concern that the Monterey Regional Fire District would lose property tax revenue if Cal Am’s private water system became a public system and did not have to pay property taxes. The argument that various public agencies, including Monterey Peninsula Unified School District, would lose some of its tax base by losing Cal Am has weighed on LAFCO”s deliberations for months. The water district was negotiating a deal with the fire district to cover the lost property tax revenue, however, those negotiations were still ongoing Dec. 6 and Poitras said, as a rep for the district, he could not support it until that question was answered. 

“There is nothing in stone. We’re all taking it on good word that we will be made whole after the districts lose tax revenue,” Poitras said. 

Commissioner Matt Gourley similarly said he was concerned about the lack of certainty around the fire district, but also said his vote was influenced by his own politics. 

“I’m definitely from the private sector, not the public sector, I don’t think government can run anything efficiently and I think we’ve seen that,” Gourley said. “The what-ifs, especially hearing from [Monterey Regional Fire District Chief Michael] Urquides earlier about not knowing what his funding mechanism is moving forward just scares the hell out of me.” 

Mary Ann Leffel, who represents the Monterey Airport special district, said she could not support the motion because there were “too many questions.” However, during the meeting, Leffel did not pose any specific questions related to the buyout. The Weekly was unable to reach Leffel by press time. 

Commissioner Wendy Root Askew, District 4 Supervisor for Monterey County Board of Supervisors, was one of two yes votes, with Seaside Mayor Ian Oglesby. Root Askew said she did not understand what the basis of the denial was. She said she shared concerns about property tax revenue loss, but said if LAFCO voted in favor, a condition of the approval was that MPWMD had to resolve all property tax questions before its latent powers were activated. 

“LAFCO cannot sustain a lawsuit where the water district has to fight until the end, and even go to the Supreme Court,” Oglesby said. “The only legally defensible position for me is to approve.” 

Since the commissioners rejected the recommended resolution to activate the water district’s power to become a water utility—a resolution which staff considered legally defensible and would hold up in court—LAFCO staff now have to reverse course and draft a resolution that recommends the opposite, and that recommendation will also have to be legally defensible and hold up in court. LAFCO commissioners will vote on that resolution on Jan. 5. 

Alvin Edwards, chair of MPWMD, says the district board is preparing next steps. A lawsuit against the commissioner’s decision is imminent, he says.

Christopher Neely covers a mixed beat that includes the environment, water politics, and Monterey County's Board of Supervisors. He began at the Weekly in 2021 after five years on the City Hall beat in Austin, TX.

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