Molly Evans MPWMD

Molly Evans, the chair of the board of the Monterey Peninsula Water Management District

Water bills on the Monterey Peninsula could go down significantly if the local utility were to be replaced by a public agency. That’s according to a 111-page feasibility analysis by a group of financial consultants and bankers released on Nov. 6.

The report is the result of an initiative, titled Measure J, which was passed by voters exactly a year ago. Measure J directs the Monterey Peninsula Water Management District to try to acquire the local assets of California American Water and run the water system itself. Cal Am has repeatedly said it would fight attempts to gain control of its system. 

The first step toward public ownership was to conduct a feasibility analysis on how financially practical a takeover would be. The value of Cal Am’s system is about $513 million, according to the consultants’ work. That figure includes the desalination project being pursued by Cal Am and the money the company would collect to pay for the removal the San Clemente Dam. On top of that, Cal Am might also be entitled to some severance damages.

Given expected revenues and costs and other financial factors, the consultants write, it would be “economically feasible” for the district to buyout Cal Am. 

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As the operator of the water system, MPWMD would be able to lower rates for customers, according to the report. That’s because MPWMD’s overhead costs would be lower than those of Cal Am and due to the lower interest rates that are available to public agencies. Also, Cal Am’s rates account for the company’s property and income tax payments. MPWMD wouldn’t have to pay those, according to the report.

A public hearing laying out the findings of the analysis and explaining the process of a public takeover of the water system will take place at 6pm on Tuesday, November 12, at Embassy Suites (at 1441 Canyon Del Rey in Seaside). Members of the public are invited to comment. The hearing will also be livestreamed at ampmedia.org/peninsula-tv.

The analysis is not a binding document and doesn’t represent a policy decision to acquire the system. It’s a report meant to guide the board of the MPWMD, the ultimate decision-making body.

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Asaf Shalev is a staff writer at the Monterey County Weekly. He covers higher education, the military, the environment, public lands and the geographic areas of Seaside, Monterey, Sand City, Big Sur and Carmel Valley.

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