Dave Stoldt, general manager of the Monterey Peninsula Water Management District, is a man with a particular set of skills acquired over a long career: He has a degree in civil and environmental engineering, which he put to use as an engineer and planner for PG&E. Then he went to business school at Stanford, and spent more than a dozen years after as an investment banker and investor in early-stage startups.
Those skills make him uniquely suited for his role in this current political moment: guiding the water management district, and its constituents, through an analysis over the next eight months as to whether it’s feasible – and desirable – to initiate a public buyout of California American Water’s local system, a process compelled by the November 2018 ballot initiative Measure J, which voters approved by a 56-44 margin.
In a series of workshops held in various locations over the last week, Stoldt laid out the process for how feasibility could be defined, and how the district, in its study, will determine if a public buyout of Cal Am’s system meets that threshold.
The workshops were intended to both inform the public and have the public inform the district as to their definition of feasibility and desirability. That feedback covered a wide spectrum of opinions: Some said cost savings for ratepayers should happen immediately in the event of a buyout, while others said they’d be happy, for the sake of future generations, if savings arrived after 30 years when all the debt was paid off.
The district expects to hire consultants in February to begin work on the study, which, per Measure J, is meant to be completed by Aug. 27, but Stoldt says there are no penalties for missing the deadline.
At the Jan. 10 session at Pacific Grove City Hall, Stoldt began his presentation by saying that feasibility is the “key word,” and one not defined by the language of Measure J.
“That’s what we’re working on here on the front end so that we can establish standards to tell our consultants,” Stoldt said.
He added the analysis will contemplate that eminent domain litigation would ensue in a public buyout effort, as Cal Am has repeatedly said their local system is not for sale. It will also look at which of Cal Am’s assets outside the water district’s boundaries – such as satellite wastewater treatment systems owned by Cal Am, the proposed desalination plant in Marina – that MPWMD should seek to acquire.
“It just opens up the layers of complexity,” Stoldt said.
There are three valuation models, Stoldt said, through which feasibility will be looked at: Cal Am’s income, the value of its assets, and the “market approach” – what other water systems have sold for in eminent domain proceedings.
The biggest challenge in the study will likely be data: Unless – or until – litigation begins and there are hearings and discovery, Cal Am is not required to share information.
For that reason – near-certain litigation if the attempted buyout moves forward – some aspects of the study will be discussed in closed session, rather than open public sessions in the coming months, but MPWMD board chair Molly Evans says she is “committed to transparency” as much as possible.