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The possibility of another attempt to put Cal Am Water in public hands prompts reflection over the history of major Monterey County ballot measures in which money and the big-lie technique prevailed. The first in recent history was Measure M back in 2000.

It was initiated by the Pebble Beach Co. with the aim of forcing the county and the Coastal Commission to allow it to build another golf course at the famed resort, but that’s not how it was sold to the voting public. Instead, the commercials and four-color fliers promoted the false notion that Measure M would stop development in the Del Monte Forest that surrounds the existing golf courses.

Measure M did contain a provision limiting the company’s ability to develop 425 acres that previously had been zoned for housing, but the company hardly needed a ballot measure to protect the property. The Pebble Beach Co. offered to permanently fallow the land for ballot measure purposes only after it had already shelved any plans to develop it. We hear a lot about Fake News. This was a Fake Ballot Measure. The campaign featured TV ads with popular actor Clint Eastwood, a Pebble Beach Co. principal, strolling through the trees and saying something like “if you love these woods as much as I do, you’ll vote yes on Measure M.”

The measure passed easily, helped by voters in the far reaches of the county who had no idea they were really voting only to add a golf course. Though the golf course deal was later scuttled by the Coastal Commission, Measure M demonstrated how moneyed interests could manipulate voter initiatives. Until about that time, the side attracting the most money had prevailed in every statewide ballot measure in California. Monterey County would prove to be equally fertile ground for deceptive politicking.

Other examples of dishonest but successful ballot measures include the 2016 ballot fight over the Monterey Downs horse race project and, of course, Measure 0 of 2014 in which California American Water twisted the truth to persuade voters not to move forward with a public takeover of the Monterey Peninsula’s privately held water system.

A giant anomaly, of course, was last year’s Measure Z, the anti-fracking measure approved by Monterey County voters despite a gusher of oil company money that paid for ads falsely charging that the initiative would shut down oil production in the area. But Measure Z’s success is no assurance that reality will trump money in the next big ballot showdown, which is likely to be another attempt to bring Cal Am under public ownership. If that ballot measure materializes in the coming, as expected, voters are likely to see another slick and misleading opposition campaign essentially paid for by the same ratepayers the measure would be designed to help.

Public Water Now, led by water activist George Riley, is believed to be on the verge of a decision to move ahead with a public takeover measure, which would be fueled in part by giant rate increases the company has imposed on its captive customers and the certainty that its struggling desalination project will lead to large additional increases.

The last time the issue made it to the ballot, in 2014, Cal Am prevailed by a count of 55 percent to 45 percent. But analysis of the vote showed that early, absentee voters who had been primarily exposed to Cal Am’s advertising voted against the measure while voters who waited for detailed information from the measure’s proponents voted for it. In other words, higher-information voters favored the ballot measure while those who were spun by Cal Am went the other way.

Cal Am’s anti-O campaign repeatedly described the takeover effort as a risky gamble. If O had passed, it would have required the Peninsula’s water management district to study the feasibility of a public takeover. The study wouldn’t have come cheap but it would have cost far less than Cal Am spent combating the ballot measure. Cal Am called Measure O “the risk we can’t afford.” What we can’t afford, Riley and a growing number of others believe, is Cal Am bills.

The Cal Am campaign also emphasized that negotiating a sale to the public would distract the company from developing a desalination plant – a plant that seems barely closer to reality even now, three years later. Cal Am also repeatedly mischaracterized attempts to takeover water systems elsewhere and the results of successful efforts.

A public takeover of Cal Am’s Peninsula water system would be an extremely difficult and expensive process and Cal Am can be expected to fight Public Water Now at every turn. The company has maintained through the years that the Peninsula system is barely profitable yet it has made it clear that it will fight any and all takeover efforts, which suggests the network of pumps and pipes is more profitable than the company lets on.

My own limited research  leads me to believe that in the short term, a public takeover would not result in lower water bills because a public agency would need to borrow sizable sums to complete the transaction. Dave Stoldt, manager of the water management district, once estimated that there would be no actual savings to the customers for as long as 30 years. Proponents disagree, saying savings would materialize much more quickly. Either way, I believe a takeover is worth pursuing because the savings to future customers, decades and decades of future savings, would make the effort worthwhile even if our bills didn’t immediately go down.

To me, the prospect of a takeover is an important public policy issue that should be decided by careful analysis and a considerable amount of professional cost accounting. The decision should not be based on a clever advertising campaign.

The way Cal Am conducted itself last time around was shameful but you didn’t hear a peep about it in polite Peninsula circles. As they did with the Monterey Downs ballot measures, pillars of the community knew that the side with the most money was cheating but they just looked the other way.

If Cal Am listens to anyone in public life on the Peninsula these days, those people should make it clear that the company should stick to the facts and the math and not create its own make-believe reality. The hospitality industry and other business interests have benefited in recent years from sweetheart rate arrangements with Cal Am. They should not let those short-term gains stop them from encouraging Cal Am to be the good corporate citizen it claims to be.

At the same time, Public Water Now and its supporters can and should be expected to play it straight. If buying out Cal Am is a good idea, the numbers should tell the story. If it doesn’t make financial sense, the idea probably isn’t worth pursuing no matter how much better off we would be with a water company run by an accountable local agency rather than for the benefit of distant shareholders.

Comments on this entry are closed.

  • po March 30, 2017, 7:51 pm

    Agreed.

  • Ronald T Cohen March 30, 2017, 8:36 pm

    Royal, I have no idea where you heard that Dave Stoldt, manager of the water management district, once estimated that there would be no actual savings to the customers for as long as 30 years. If that were the case, Measure O would have stopped right there (with no trigger to buy Cal AM).

    The only real cost study I’m aware of was conducted by me (which Dave did look at and did not dispute), and showed considerable savings in public ownership within the first few years. All the savings occurred because public financing was half the cost of what the CPUC requires ratepayers the pay Cal Am for infrastructure loans. We did our homework. Please correct your statement.

    • Royal Calkins March 30, 2017, 11:24 pm

      Ron– Dave told me precisely what I reported here. Share your numbers. Glad to post them. I hope he was wrong then and if you can show otherwise, please feel strongly encouraged.

  • Luana Conley March 30, 2017, 9:20 pm

    The false equivalency syndrome strikes again, insisting Public Water Now, a volunteer advocacy group and all their anonymous supporters, better “play it straight,” in the face of massive CalAm corruption, fraud, misuse of public funds, manipulation of our only recourse, the Public Utility Commission, and complete collapse of any pretense of accountability.

  • Bill Boosman March 30, 2017, 9:23 pm

    As someone that’s been the mayor of a small town that had its own public water system, I’m also skeptical of a 30 year payoff. Public systems not only get better rates, they’re also eligible for more state and federal funds ( including grants) than private systems. And, since we owned our roads, we were better able to coordinate buried infrastructure work with road work. The projects often funded entirely new pavement!

  • Ron Weitzman March 30, 2017, 9:52 pm

    Click on the following link (or type it on your browser) to see cost comparisons between private and public ownership Water Plus provided on its website in 2013:

    http://waterplusmonterey.com/cost_comparisons/COST_COMPARISONS/cost_comp_1.html

  • david fairhurst March 30, 2017, 11:08 pm

    Strange Royal how when it is an issue you disagree with then it is all about “big money” or an ignorant public or some other excuse. If it passes then it is some sort of “anomaly”. Measure Z had plenty of false information spread by it’s backers too, but it fit into the “climate change” hysteria.

    I’m no fan of Cal-Am, in fact I have contacted the PUC many times over (never a response) about what are indeed by every standard excessive rates (as are PG&E’s). The question is how do we determine the truth of the cost of a public takeover and will it be run more cost/morally effectively.

    Mr. Weitzman’s chart is very nice (I do not know how they came to those numbers) but still does not show all that may be involved, such as the purchase of Cal Am and it’s costs. When I talk to the people that work for Cal Am they seem to like it the way it is. There needs to be an open debate and the presentation of all true information, the good, the bad and the ugly (to “Eastwood” it).

    In reality what fails us is our government agencies and the supposed protector of the public, the PUC along with our Democrat run State Government whom truly does control the pricing and supply of water (and electric supply/costs too). We buy the whole pizza and the State gives us the crust.

    • Royal Calkins March 30, 2017, 11:22 pm

      David — I seldom find myself disagreeing with issues.

      • david fairhurst March 31, 2017, 11:36 am

        Thanks, we all has our own bias and beliefs (or at we should have), if we didn’t it would be Baskin Robbins one flavor ice cream and how fun would that be? I fear the “Utopian” society (as per the book by Thomas Moore)

  • Monterey Bay Conservancy March 31, 2017, 6:47 am

    We need one “Monterey Bay Regional Water Authority” for Santa Cruz, Monterey, and maybe even San Benito Counties. This can be accomplished by the SWRCB, and I tried to start to explain to them why around one year ago 4/19/2016 at minute/second 11:18 @ http://www.thebestthatmoneycantbuy.org. , but their didn’t quite get it?

    Cal Am has caused literally billions of dollars of environmental damage and resource waste and loss through their gross resource mismanagement and illegal overuse of their ground and surface water rights for decades. I have heard the PUC has absolved Cal Am of any liability for any of this?

    If the PUC hasn’t/hadn’t, Cal Am would be liable to such an extent for it’s negligence, conversion(?)/intentional illegal water rights overuse over the decades, etc. that Cal Am (and it’s German parent company?) would be paying plenty just to get a regional authority like I propose to please just take Cal Am and their accumulated liability and sordid history of water and resource waste off their hands for free?

    • Melodie Chrislock March 31, 2017, 8:30 pm

      No German parent company anymore. American Water, New Jersey owns Cal Am.

    • L. Parrish April 2, 2017, 8:26 pm

      Monterey Bay Conservancy: Hope you can be counted on to support the next effort to get rid of Cal-Am. Whoever you are? Sorry, couldn’t watch the 9 hour video you linked.

  • Jean March 31, 2017, 1:14 pm

    Though one might have reason to conclude otherwise, the CPUC does not have the authority to “absolve” a public utility of everything it does or doesn’t do. Even though its been stacked by a former seminarian, it is not a religious order.

  • Karl Pallastrini March 31, 2017, 7:14 pm

    It seems that there are alternative facts in regards to the profitability of public water vs. a private company. Are both sides “spinning” the numbers? One would think that the data would tell the story. A question I have for those in the know…would the PUC rubber stamp public water requests for surcharges and rate increases as it does for a private company like Cal Am? Perhaps the over-riding thinking of the PUC is, at least they have water, regardless of the cost.

  • Jean March 31, 2017, 8:15 pm

    The CPUC has regulatory jurisdiction over Public Utilities. “Public Utility” means a utility serving the general public.
    Governmental entities are not public utilities subject to the CPUC. Instead, they must comply with statutes, and CA Constitution Articles XIII A, B, C, and D, which were voter initiatives approved by the voters in 1978 (Prop 13), 1996 (Prop 218), and 2010 (Prop 26). These constitutional provisions require that a fee not exceed the reasonable cost of the service for which the fee is levied. Theoretically, no profit is allowed.

  • Melodie Chrislock March 31, 2017, 8:23 pm

    Anyone who really doubts our water would be less expensive should see this report.
    https://www.foodandwaterwatch.org/sites/default/files/report_state_of_public_water.pdf

    To put the cost of water in perspective, in 2015 Food & Water Watch did a study of 500 water systems across the county, ranking them by the annual cost of water to the consumer. The Monterey Peninsula ranked 9th in the top ten for the most expensive water at just under $60 a month or $716 annually.
    This study was done on the median user.

    But Cal Am has said that the annual average (actually median) cost will rise by about $20 per month or $240 annually beginning in March. Under the new rates the average residential consumer’s bill will be $956 a year. With the new rate increases tasking effect now, the Monterey Peninsula will have the most expensive water in the country! Shouldn’t be hard to beast that.

    To make matters worse, the cost for new water projects like Cal Am’s proposed desal plant or the Pure Water Monterey (recycled water) project, are NOT yet included on your water bill. And now Cal Am is asking the CPUC for another 22.7% rate increase over the next three years.

    It looks obvious that we would save money, a lot of money in taking our water back.

    • george Riley March 31, 2017, 10:30 pm

      No person nor any agency has initiated a professional study of the cost of buying Cal Am’s service and assets. Nor is there an educated estimate of future operating costs by a public agency. Nor is there an update of savings to ratepayers over the a short or long term. The estimates these days are based on data that are years old. Measure O data is now 4 years old. Since then Cal Am rates have escalated, its investments in infrastructure has increased, and operating costs have gone up. If current financial data is available, and analyzed by competent professionals, then reasonable estimates can be discussed. Until then, statements only feed speculation. Public Water Now expects to look at more current data, and draw some conclusions. And PWN will follow up. Stay tuned. Meanwhile, watch your water rates go up and see if you can find justification for them.

  • Ron Weitzman March 31, 2017, 11:58 pm

    Mr. Fairhurst, look more closely at my chart. Contrary to your statement to the contrary, it tells where the numbers come from, and it includes the cost of buying Cal Am (debt plus equity), as well as the cost of eminent domain.

  • bill leone April 1, 2017, 12:24 pm

    Making a choice between CalAm or a Publicly Owned (or controlled) district is like choosing between having the Cosa Nostra or Local Law Enforcement as your landlord.