A Troubling Vote
LAFCO’s denial of public water makes little sense

By Melodie Chrislock

On December 6, in a brazen display of special interest politics and complete disregard for the will of the voters in passing Measure J, five LAFCO commissioners blocked the Cal Am buyout.

Why does LAFCO have any say in this? LAFCO stands for Local Agency Formation Commission. One of its jobs is to oversee changes in the services public agencies provide.

The Monterey Peninsula Water Management District (MPWMD) was ready to make Cal Am an offer. But they needed LAFCO to approve the change in service and activate their latent power to sell water retail. In a 5 to 2 vote, LAFCO refused.

Why? Here's where things get really troubling. LAFCO's staff has had the application since February. They've brought it before the commissioners several times. Cal Am attorneys insisted each time that LAFCO needed more information.

LAFCO decided it had to determine if MPWMD could afford to buy Cal Am. This had already been clearly demonstrated in their feasibility study, but LAFCO insisted on another study. It cost MPWMD $70,000.

Supervisor Luis Alejo drove the vote to require this study. He was later forced to recuse himself due to campaign contributions from Cal Am president, Kevin Tilden, and two of Cal Am's law firms, Manatt, Phelps & Phillips, and Anthony Lombardo and Associates.

In October, LAFCO heard the application again. The independent study had confirmed that MPWMD could afford the buyout. But the day before the hearing, Cal Am's attorneys sent LAFCO four hundred pages of what they claimed was new information that had to be considered. The vote was delayed again to December 6.

LAFCO staff had twice recommended approval. The independent study LAFCO asked for confirmed the buyout was feasible. But after all this, five LAFCO commissioners decided to defy their staff and the voters' mandate.

Supervisor Lopez argued that this might increase water bills for his Chualar Cal Am customers and the other four Cal Am satellite systems that Cal Am owns. Chualar is a disadvantaged community. Any rate increase is limited by the CPUC to inflation. Lopez already knew this. He told me so in a meeting on December 3. The impact on the other satellite systems can't be known at this point but would likely be minimal.

Commissioner Warren Poitras argued that he had no guarantee that his fire district's 1% tax revenue loss, $140,000 annually, would be made up by the District, even though MPWMD had offered to do a tax-sharing agreement with the affected districts. Poitras is a Carmel Valley resident, but he voted against the buyout based on a less than 1% tax revenue loss to his fire district.

Commissioner Matt Gourley made the motion for a no vote saying, "I'm definitely from the private sector, not the public sector, I don't think government can run anything efficiently."

Then there was the real elephant in the room – water supply. LAFCO has no authority over water supply, but that didn't stop Salinas Valley members. They have an issue with the roughly 3,000 acre-feet of agricultural wastewater that will go to the Pure Water Monterey Expansion for the Peninsula. Craig called it "our water." Lopez and Craig see Cal Am as their savior who can force a desal plant on the Peninsula.

Mayor Ian Oglesby, Supervisor Wendy Root Askew, and Mayor Anna Velazquez argued the case for approval eloquently, pointing out that there was no case for denial, but it fell on deaf ears.

In the face of all the evidence supporting MPWMD's buyout of Cal Am, LAFCO's additional study, and its own staff recommendations, five commissioners sided with Cal Am and just said no to 24,000 Peninsula voters.

These are the LAFCO commissioners responsible for this travesty who should be held accountable: Supervisor Chris Lopez - District 3, Mayor Kimbley Craig - Salinas, Warren (Pete) Poitras - Monterey County Regional Fire District, Mary Ann Leffel - Monterey Regional Airport District, and public representative Matt Gourley.

So what now? The water district will meet in closed session this week to decide how to proceed with a lawsuit.

Background on Measure J

Public Water Now drafted Measure J and put it on the ballot in 2018. Voters passed it by 56% even though Cal Am spent $3 million in a deceptive ad campaign against it.

Measure J mandated that the Monterey Peninsula Water Management District buyout Cal Am's Monterey Peninsula system, if and when feasible.

Buying back the Peninsula's water system from a for-profit investor-owned private company and putting it under the ownership of a non-profit public agency eliminates profit on our water and gives us local control through the water district's elected board. 87% of the nations' water customers get their water from publicly owned water systems.

The cost of the buyout would be covered by the profit Cal Am takes and the corporate taxes it pays on that profit. In 2015 Public Water Now estimated that would be $19 million annually. There would also be other savings to cover the cost of the buyout.
Of the 500 largest water systems in the country, the Monterey Peninsula was documented by Food & Water Watch to have the highest water costs in the nation in 2017. Our water costs have only risen since then.

Reprinted from Voices of Monterey Bay | December 9, 2021

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