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Now that a public buyout of Cal Am has been declared feasible, is it doable?

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"It’s definitely economically feasible.”

That’s from Dave Stoldt, general manager of the Monterey Peninsula Water Management District, the agency that was tasked by the will of the voters who passed the ballot measure known as Measure J, to determine whether or not a public buyout of California American Water is feasible.

According to a 111-page analysis by a group of financial consultants and bankers released on Nov. 6, not only is a buyout of the behemoth Cal Am feasible, it would also cause the cost of water to drop significantly if the water utility was replaced by a public agency.

Stoldt spoke to Weekly Editor Sara Rubin about the feasibility study, which was to be discussed at a public meeting Nov. 12 after this column goes to print. The feasibility study was months upon months in the making, and the names of those bankers and water finance experts were kept secret so they wouldn’t be subject of undue influence from either side of the great water divide – those who support Cal Am and its proposed desal plant, and those who advocate for the public buyout.

The feasibility report pegs the value of Cal Am’s system at $513 million, a number that includes the desal project. (Stoldt says there will be questions about who pays the $20 million of costs already sunk into the planning phase of the desal plant.)

That Cal Am will fight for its life is no secret: The company has already said it would fight off attempts to gain control of its system. And they and their advocates are using fear-mongering – a la, without desal, nobody can build. But as Stoldt points out, it’s not that there’s an absence of water right now – you just have to be willing to pay for it.

A few weeks ago, I wrote about a somewhat raucous board meeting of the wastewater agency Monterey One Water, or M1W, at which public buyout proponents squared off against Cal Am’s moneyed and powerful supporters – the hotel folks, the real estate folks and the ag folks.

And as much as I like teasing the latter group, the words of Norm Groot, executive director of the Monterey County Farm Bureau, have stuck with me.

The M1W board, comprising public officials from numerous county agencies, were debating whether or not to write a letter declaring that the expansion of its Pure Water Monterey recycled-water project was always meant to be a backup to desal, not a replacement for desal.

Groot spoke to remind the board of that fact, noting that 17 separate groups came together to support the recycled water project as part of a three-legged stool that included desal.

“Now we’re coming to the point where we’re looking at [Pure Water Monterey] project as the main project, not a redundant systems situation, and I want to remind people that a lot of this water comes from the Salinas Valley,” Groot said at the meeting. The water that comes from the Salinas Valley includes water used to wash produce and reclaimed water – sources that are by no means guaranteed. “These are all interruptible supplies. Think about where this is coming from and does this agency want to be responsible 100 percent of the time for a water supply for 100,000 people on the Peninsula?”

I find myself agreeing with Groot on that point: The Monterey Peninsula shouldn’t rely on an interruptible source of water to supply current and future needs as the date looms for a judge’s cease-and-desist order to prevent Cal Am from over-pumping the Carmel River takes effect. Nor do I find it wise that Cal Am, already the purveyor of the most expensive water in the country, should be allowed to build a desal plant that will increase the value of the system while doing little or nothing to reduce the cost of water to the end user, whether those end users are apartment dwellers, homeowners or hoteliers.

But a desal plant smaller than the one Cal Am has proposed – an actual viable leg of a three-legged, water-providing stool – run by a public agency that has to abide by public agency rules like the Brown Act and the Public Records Act and thus stands a good chance of keeping the needs of the public in mind?

That’s a plan worthy of further consideration.

MARY DUAN writes Local Spin for Monterey County Weekly. Reach her at mary@mcweekly.com or follow her at twitter.com/maryrduan. Editor Sara Rubin contributed to this report.
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