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For much of my journalism career, one of my roles was to offer advice in the form of editorials but it was more of an exercise than a meaningful attempt to get anyone to act a certain way. I considered it a success if anyone read the whole piece and gave it any thought.

The advice I am about to give is different. For one thing, the intended audience is much smaller. It is for the people who make decisions on behalf of California American Water Co., the principal purveyor of water to the Monterey Peninsula. And it is meant to be persuasive and not just informative.

So here goes.

Cal Am, it is time to sell.

For the benefit of your company, your shareholders and the people of the Monterey Peninsula, it is time for you to sit down at the bargaining table and try to work out a fair price for your highly successful and equally controversial enterprise. Coming to terms with the community, without a protracted takeover process, will save you money. It will maximize the return to your shareholders and that, after all, is what you are all about.

So why am I saying this? And why now?

It’s partly because I went to a forum Monday night in Monterey in which the leadership of Public Water Now sketched the basics of the group’s upcoming effort to convert Cal Am from a privately owned, profit-taking business to a publicly owned, public-benefit operation. There were about 140 people there and, as far as I could tell, none of them was from Cal Am. If there had been, I suspect they’d be writing a memo to their bosses making pretty much the same argument I’m making here.

A key argument against a public takeover effort will be that it has been tried before, most recently four years ago, and it failed then. Don’t be fooled. Although Cal Am outspent the public takeover forces 20-1, the margin of victory, was 55-45, closer than anyone expected. If this thing goes to the ballot again, you can expect the numbers to be reversed.

Since the 2013 vote on what was called Measure O, the rates Cal Am charges its customers have risen dramatically, more than doubling in many cases, and they are poised to keep going up, dramatically, for as long as the company owns the water operation. A key argument against Measure O was that a public takeover wouldn’t be cost effective. Cal Am has crippled that argument by squeezing every ounce of profit out of its customers.

The last straw for many Peninsula residents was the company’s successful effort to raise rates to make up for money it didn’t make while the community was working hard to conserve water because of drought. Cal Am wasn’t alone in this extraction. Many publicly owned water systems in the state did the same thing, but they weren’t dealing with such expensive water.

Here’s more. The 140 people at the meeting Monday night weren’t a bunch of fuzzy-headed activists. There were past and present members of Peninsula city councils and the water management district board. There were lawyers and retired CEOs. This wasn’t a bunch of twenty-somethings. This was a bunch of sixty-somethings, people who know a little something about elections. Many of them stopped to make  campaign contributions on their way out.

Also in the crowd were numerous people who were active in last year’s Measure Z campaign. That was the successful measure to ban fracking in Monterey County. Exxon and Mobil made like Cal Am and piled big money into the fight to defeat the measure. By the time it was over, they had spent more than $5 million on slick and tricky advertising that twisted the measure’s intent. In the end, Measure Z passed with more than 55 percent of the vote, a result that should scare the heck out of Cal Am’s accountants.

One of the speakers Monday night was the woman who ran the Measure Z campaign and the similar campaign that accomplished the same goals in San Benito County. She knows how to run a grassroots campaign, and so do many others who were in the room.

The people who ran the Measure O campaign were there Monday night, of course. The ringleader is Public Water Now’s George Riley, who knows almost as much about water as Cal Am. After Measure O went down to defeat, Riley didn’t walk away to lick his wounds. He dug into water issues. He continued studying Cal Am and he studied the campaign it ran against Measure O. It is safe to say he learned a lot in four years.

Four years ago, the focus of Cal Am’s fight against Measure O was the company’s desalination project, its complex and expensive answer to the Peninsula’s chronic water shortage. Cal Am campaign ads hit hard on the theme that a public takeover would delay the desalination project, which, the advertising assured us, was looming just over the horizon.

George Riley

Four years later, the desalination venture has added untold millions of dollars to the future financial burden imposed on Cal Am’s customers, but groundbreaking is no closer.The project has been stalled by technical issues and conflict-of-interest concerns, perhaps even by lack of will on the part of Cal Am. At the moment its product is something it pumps for free from the Carmel River. Even though state utility rules guarantee that it will make money in the process, getting a desal plant built is a difficult and expensive task. Critical issues, such as water rights and basic pumping technology, remain unsettled.

At the same time, alternative solutions to the Peninsula’s water shortage have moved ahead, including a plan for an ambitious water recycling project that just last week received approval for the bulk of its financing plan. That is something Cal Am’s desalination planners can only dream of.

What that means is that the need for a large and expensive desalination plant is weakening. As it stands, Cal Am looks to charge its customers hundreds of millions of dollars to treat much more water than the Peninsula needs, water that likely would be used to create subdivisions for which there is no demand. No wonder political support for Cal Am is drying up.

Cal Am officials likely have noticed the uptick in letters to the editor critical of Cal Am and its ridiculous water rates. Those letters are from actual bill-paying customers, not Public Water Now activists. The issue of Cal Am rates is not just something for Public Water Now to turn into a slogan. Real people are really upset with the cost of water and don’t like it one bit that the cost here is about as high as it is anywhere.

A lot has changed in four years. When Measure O was on the ballot, the Peninsula mayor’s water advisory board played a key role in urging its defeat. The makeup of that board has changed. Most notably, former Carmel Mayor Jason Burnett is out of office and out of power. It was Burnett who coalesced the mayoral opposition to Measure O and who coordinated strategies with the Peninsula business community’s support for Cal Am. For elected officials, supporting Cal Am politically is far riskier now than was then.

As Riley pointed out Monday, the makeup of the water management district board has changed as well. That’s important because the district would become the initial operator of the water system once Cal Am was removed. Former Sand City Mayor David Pendergrass is gone from the district board, along with his unflinching support for Cal Am. New county Supervisor Mary Adams is going onto the board, bringing her brand of quiet progressivism with her.

If the ballot measure proceeds, Cal Am officials will spend millions fighting it while telling the shareholders that they are protecting the investment. Then, when the measure prevails, Cal Am will spend millions in litigation, fighting the election results initially and then watching as platoons of $500 per hour lawyers negotiate over the public purchase price of the system. In the end, a court, not Cal Am, will decide on the purchase price.

Cal Am officials on the Peninsula have insisted for years that their system here is barely if at all profitable, yet they have made it clear that they will fight to keep it. If anyone knows any Cal Am shareholders, you should send them this piece and encourage them to ask the company whether this fight really makes sense. Doesn’t it make more sense to start negotiating the price now?

It is time for the company to recognize that the tide has turned. By working every angle to squeeze maximum profit out of every aspect of the operation, they have invited a takeover by a publicly operated management structure intent on public service rather than rate of return.

I don’t mean to suggest that the takeover effort is a slam dunk if Cal Am resists. It will require tremendous energy and effort. But by every indication, there is an ample supply of energy and will and a diminishing set of reasons to keep Cal Am around.

So, Cal Am, if you’re thinking like the good corporate citizen you claim to be, you should conclude that it was nice while it lasted but it’s time to move on. And even if you’re thinking like the calculating enterprise that you really are, you should realize that sticking around means throwing lots of good money into a pot you can’t win. To steal a line from the anti-Measure O campaign, it’s a risk you can’t afford.

Comments on this entry are closed.

  • Richard Kreitman April 11, 2017, 2:25 pm

    I have an accounting question for George Riley or others knowledgeable in this. CalAm is of course going to demand full compensation for our water infrastructure which they own. In cases like this, must we pay them full replacement costs? Or is it the depreciated value on their balance sheet? And/or are we permitted to take into account the seriously deteriorated condition of the system and discount the price by what it will take to repair/replace it in the near future? That would be in the hundreds of millions.

    • Jennifer A Haydu April 11, 2017, 10:27 pm

      Good questions Richard, and I second the desire to hear the answers.

    • George April 13, 2017, 10:12 am

      Cal Am has a rate base, a paper value for CPUC purposes, of about $146 million. That’s a starting point. Eminent domain proceedings can include all the mentioned factors, offset or modified by deteriorated infrastructure, new added infrastructure, lack of water rights, liabilities, and potential lost profits, “goodwill”, and to include comparables and financial statement data. All can be included in a determination of value by a court. The final value will be a court decision, not what Cal Am thinks it is worth (always an escalated number). Or an agreed upon value sometimes at the last minute, literally on the courthouse steps. Even with many added investments, the level of rates will be so high that simply offsetting profit, taxes and depreciation can make a purchase attractive. PWN is already working to develop a picture of all this in the near future.

      • Royal Calkins April 14, 2017, 6:33 pm

        The George who made the comment above is none other than George Riley

  • John Dalessio April 11, 2017, 2:29 pm

    Yes. It’s way past the time to get rid of Cal Am, and private ownership of our water.

    • john moore May 7, 2017, 8:41 am

      Agreed about buying out Cal Am, but if the Monterey Water Management District is the agency that will manage the new water district, we are doomed. It was that agency’s job to assure that we had water, but after decades we are in a critical condition. The Water Management District has zero experience in managing a water district, a better solution is to provide in the Initiative that it has a pre-existing contract with Marina Water District setting forth a summary of the contract conditions that it has agreed to in order to manage the government owned Cal Am business. Marina Coast is a successful water district with rates about half that of Cal Am. The Monterey Water Management District is the co-villain here, along with Cal Am and it has not changed: it sewage-Ag waste recycling project provides that the putrid material removed from the sewage and toxic Ag waste will be discharged into the Monterey Bay National Sanctuary. Supporters claim to be Environmentalists!

  • Jason Reed April 11, 2017, 2:42 pm

    Well done Mr. Calkins!

  • Trish April 11, 2017, 2:45 pm

    Bravo! I’ve never understood for-profit utilities at all – bad for all of us in the long run since things like electricity and gas have become necessities for life in America – but especially water. We HAVE to have it to live. I think the rates are higher here than in Arizona. That said, growing up in the desert, I understand the importance of conservation and personally conserve water every day. We live in a semi-arid region and really NO ONE should have a lawn – what a waste of water! If I could, I’d be using grey water for the veggie garden, but as a renter I can’t. Thanks for the article.

  • Lou Panetta April 11, 2017, 2:58 pm

    I’ve often disagreed with you, Royal. But on this, we are in lock step. I urge everyone to reject at the ballot box any candidate not supporting public water.

  • Helga Fellay April 11, 2017, 3:29 pm

    Excellent piece, Royal. Only two very minor additions: Re: “The ringleader is Public Water Now’s George Riley, who knows almost as much about water as Cal Am.” No way. George Riley knows so much more about water than Cal Am will ever know. Cal Am is an expert on profits, not water – that’s one of its core problems. And two: Re: “Those letters are from actual bill-paying customers, not Public Water Now activists.” Public Water Now activists ARE actual bill-paying customers, and more and more actual bill-paying customers are becoming Public Water Now activists because their actual bills are going through the roof to pay for all of Cal Am’s mistakes. Corporations are known for paying and bussing people in to act like activists. That is not what we do and it’s not what we are. We are a grassroots organization of actual people who look at their actual outrageously high water bills and say enough already.

  • Stephen Schweitzer April 11, 2017, 4:26 pm

    The only thing that Cal Am water owns is its name. Everything else utilized here was bought and paid for by the rate payers. Not to mention the tax relief that they received and we made up the difference. Remember Justice Scalia said that corporations are people, but they are not taxed as people. By the way, has anyone bothered to consult our Navy about seawater desal?

    • Dan Turner April 11, 2017, 8:39 pm

      Yes, CalAm paid for all the assets that we will have to pay for when we buy them out with money they got from us but, by the time they used the money, it belonged to them, not to us any longer. So, we’re going to have to pay for those assets again, I’m afraid.

  • Jim Darling April 11, 2017, 4:35 pm

    Royal, you mentioned people were giving donation at the Monday mite meeting. Do you have an address where we can send donations? Thanks

  • Nancy Runyon April 11, 2017, 5:52 pm

    THANK YOU! I used to live in Palo Alto, where all utilities are City owned—cheap and never a problem. And our water was delicious. Here I have to have a whole house filter.

    • Myrleen Fisher April 11, 2017, 6:10 pm

      Nancy, I too lived in Palo Alto for many years. What terrific utilities we had. Our costs were lower for water, electricity, gas, sewer and garbage than any other community on the SF peninsula. And they were all on a single bill! The total was less than just my water bill here.
      That’s why when Measure O began I jumped in to help collect signatures, then walked neighborhoods, and I’m still involved as we look at the possibility of another measure. It’s rather fun. We need lots more volunteers. Contact me if you’d like to help—831-659-2862.

  • Jean April 11, 2017, 6:32 pm


    If Cal-Am is following standard accounting procedure, depreciation expense would be included as part of its billing rate. When collected, the depreciation expense should be set aside as “Accumulated Depreciation”. It’s an asset that along with the depreciated asset should (note “should”) reflect full replacement value.
    A prospective purchaser would pay for the depreciated asset because the existing owner would no doubt keep the cash on hand.

  • Marc Del Piero April 11, 2017, 6:34 pm

    The time is NOW. When I was the attorney for the Pajaro Sunny Mesa Community Services District in North Monterey County in 2004, we proposed a publicly owned, regional de-salination plant in partnership with Poseidon Resources Corporation, the largest private sector developer of desalination plants in the western hemisphere. Poseidon has since completed the largest de-sal plant in California in partnership with San Diego County and its’ local public water agencies.
    Cal Am and it’s apologists did everything that they could to make sure that the then weak-kneed local elected officials of Monterey County were made fearful of exercising their authority to take over the source of water for the Monterey Peninsula. They opposed our public/private partnership. The project did not move forward because no city councils or mayors had the backbone to stand up to CalAm and take care of their constituents. But, Cal Am has failed to buid ANY water project in over 20 years.
    In 2013, during our pro-Measure O campaign that was supported by those of us who expected CalAm’s currently punitive rate increases, the mayors, led by Carmel Mayor Jason Burnett, once again “stuck their heads in the sand” and withdrew from affirmatively protecting their constituents from Cal Am’s oppressive and heartless rate increases.
    Now, due to their weakness and lack of political will, the residents of the Monterey Peninsula are being victimized by Cal Am again. Again, Cal Am has proven that it has no concern about our senior citizens on fixed incomes, or our young families with children, or our residents who are employees of our visitor seving industries who have to drive for hours because they cannot afford to live on the Monterey Peninsula. It is time to stop listening to CalAm’s paid PR professionals and it is time to stop being victimized by Cal Am’s lawyers and their cronies at the California Public Utilities Commission. They are not the friends of the real residents of the Monterey Peninsula, they are not doing anything for our residents except “picking their pockets”. AND PAY NO ATTENTION TO THE CAL AM “FRIENDS” WHO SAY THAT WE CANNOT AFFORD TO BUY THE SYSTEM, BECAUSE THEY NEVER BOTHERED TO ASK US IF WE COULD AFFORD THEIR WITHERING, PUNITIVE INCREASES ON OUR WATER BILLS.
    The time is NOW to take over Cal Am by exercising the power of eminent domain, and converting the water system on the Monterey Peninsula into a publicly owned system governed by our public officials. As a lifetime resident of Monterey County, I am tired of being abused and “held-up” by a New Jersey company that is now charging us nearly the highest water rates in all of the United States.

  • Karl Pallastrini April 11, 2017, 7:01 pm

    Wow! Great article and considered responses. Time to engage in grass roots politics to get rid of Cal American. Wouldn’t a responsible corporate enterprise tell rate-payers that are conserving water via the Governors request to address the draught…that if you do that, you will pay for it. No…that didn’t happen. Cal Am waited until the rainfall season was under way and assessed infrastructure costs along with lost revenues for water that wasn’t used, and interestingly…they don’t own anyway. Cutting back on the pumping of water from the Carmel River has been a PUC directive for some time now. O.K. We did that. Now we have to pay for it. This is corporate hi-jacking at the highest levels. Plan on Cal Am setting acquisition costs at levels that will benefit their share holders, while making it as difficult as possible to complete the acquisition.

  • Monterey Bay Conservancy April 11, 2017, 7:09 pm

    How many tens or hundreds of millions of dollars of environmental damage and illegal water rights overuse has CAL AM already been relieved of liability for by the PUC over the last few decades? THey should be giving you the business or even paying you to take it over? Of the 140 people/prior supporters in attendance, how much money was contributed by them? It’s a joke. How much is pure and sustainable water for you and your children worth to you cheapskates? I donated $1000 to your Measure O campaign in 2013 though I live in Aptos? What did you attendees donate? You couldn’t even raise $100K? That’s your bigbest question? Talk’s cheap. Elections aren’t.

    We need one Monterey Bay Regional Water Authority to address our regional water challenges, as I explain at minute/second 11:18 @ http://www.thebestthatmoneycantbuy.org and @ http://www.ourinconvenienttruth.com over 10 years ago… . Here’s a big hint for you all on how. In the state of California, Big Ag uses 80% of our water commons, yet only comprises 2% of the economy. That’s essentially the fundamental problem here with water sustainability here in the Monterey Bay. Too much ag, too little sustanable bang, and all the bucks for the Big Agsters, who really run our water here…

    In addition to reallocating the Castroville Reclamation water to urban from ag use w/ the aid and assistance of our new Congressman, the balance of the solution, in addition to one properly sized regional desal plant, can be accomplished with opm as is explained at http://www.thebestthatmoneycantbuy.com, imho …

  • Melodie Chrislock April 11, 2017, 7:38 pm

    Great piece Royal, thank you so much for calling as it truly is!

  • bill leone April 11, 2017, 8:30 pm

    Yet Another Great Article to the Partisan’s credit, which should have appeared in the Weekly more than four years ago.

    Nevertheless, I want to remind Partisan readers, that one of the Band of Mayors sticking his legislative
    head in the sand was Seaside Mayor Rubio, who, by the way, endorsed another snake-oil project called Monstrosity Downs. He, incidentally, is Still (miraculously!) in office.

    A personal note on George Riley: a more honest, community-minded, intelligent, thoroughly informed gentleman I have rarely met in my lifetime. When George merely suggested I run for election, as a progressive delegate to the Monterey County Democratic Central Committee, I did not ask “what for?” or “why?”, I just gathered signatures, put my name on the ballot, & started dragging my carcass to monthly meetings…..& so did seven other progressive candidates. As a result, the MCDCC is more progressive now than it Ever has been. Moreover, the MCDCC, in my opinion, is slowly but surely changing local politics for the betterment of our quality of life on the Peninsula. I invite everyone who is reading this to join us in Seaside at the C4C (Center For Change), 1238 Fremont Blvd (866-679-3367). You’re Welcome to “The Room Where It Happens.”

  • David Fugitt April 11, 2017, 8:40 pm

    Royal says Cal Am gets its water free from the Carmel river. Really? I guess they don’t pay their employees, they must get free power from PG&E, free chemicals to treat the water, free gas to run the vehicles, need I go on?

    • Dan Turner April 11, 2017, 9:15 pm

      Yes, you need to go on but I’m not going to tell you where you need to go.
      Of course CalAm has expenses. That’s not the point. The point is that w/the PUC’s cost+10% system, CalAm has an incentive to spend as much money as possible because they’ve figured out that 10% of a big number is more than 10% of a smaller number.
      Also, a public water agency, in addition to having no incentive to run up expenses, doesn’t tack on a 10% profit.
      You really ned to make more intelligent comments.

    • Michael Baer April 11, 2017, 9:27 pm

      Sure Cal Am has overhead expenses. Yet THEY GET EVERY GALLON OF WATER FROM THE RIVER ABSOLUTELY FREE! That includes the majority of that water which they have been stealing from the public trust for over 20 years. They are allocated 3,300 acre feet per year from the River and in some years took in excess of 10,000 afy.

    • Royal Calkins April 11, 2017, 9:39 pm

      David: If Cal Am got free labor, free power, free chemicals or free gas, I would have said it got free labor, free power, free chemicals, free gas. It gets free water from the river, which is why I said it gets free water from the river.

  • Dan Turner April 11, 2017, 9:07 pm

    I hope that CalAm will be reasonable about all this and sits down with us and pleasantly negotiate their sale with us. Unfortunately, I don’t think that’s likely. Please consider the following analogy.
    You have a money machine. All that you have to do is plug it in, turn it on and money comes out. If you want more money, you simply adjust it a little bit and more money comes out. The money comes from your neighbors’ bank accounts. One day they come to you and tell you that your money machine is driving them to the poor house, so they’d like to buy it from you. “FAT CHANCE!!!”, you tell them.
    We are a cash cow for CalAm. A money machine. Therefore, I strongly suspect they will fight like hell to prevent being bought out.
    This is not meant to be discouraging or disheartening. If we win the election, I think we’ll be on the lucky side if it takes only 3-5 years to actually give CalAm the old heave-ho. There have been instances where it took over 10 years. The important thing to remember is that, in the long run, public water is always less expensive than private water.
    At my age, I may not be here for the long run but that’s OK, too. Sometimes you plant a tree whose shade you’ll never get to enjoy. Sometimes we do things for posterity and, also, because its just the right thing to do. The miscreants who run CalAm will never understand that sort of motivation and determination.

  • bill leone April 11, 2017, 9:23 pm

    Keep in mind: Moses never lived to see the Promised Land.

    Also, someone is Name Freaking: “Fugitt!”

    • Royal Calkins April 12, 2017, 11:36 am

      That’s his real name.

  • Jeanne Turner April 11, 2017, 10:30 pm

    Thanks for the great write up on last night’s meeting, Royal. On August 27, 2013, 87% of voters in Golden State’s Ojai service area voted to support Casitas’ purchase of the Ojai water system, and to form the Ojai Community Facilities District to assess properties to pay for bond funding to purchase the system. 87%! We seem to have a much higher percentage of voters who are morons or people who are on the take here in our water district.

  • Jean April 12, 2017, 7:00 am

    Ojai has long been recognized as an area of great positive energy. Great civic culture, too.
    Golden State’s water main broke about two years ago on Ojai Avenue, directly in front of the local theater. Filled the theater with mud. Theater is still closed, despite litigation.

  • Karin Locke April 12, 2017, 8:34 am

    Wish I could have attended but had a prior commitment…so sorry Measure O failed last session, great article and comments. As a senior on a fixed income I am always looking at rate increases…on our water bill for last month, we used less water but our bill went up and now our fees are greater than the cost of the water!

  • Jeffrey Ford April 12, 2017, 1:14 pm

    Well written commentary, Royal, Bravo! Concerning Richard Kreitman’s question about purchasing Cal Am’s assets: Albeit this is a public utility, but why should this purchase of real estate/on-going business use any different principles than those used for a typical purchase of a residential or commercial property? The cost approach to placing value on improvements clearly factors depreciation into the formula. The sales approach does as well with the improvement’s Condition rating reflecting its level of depreciation. To pay the price of a newly installed infrastructure system and buildings would not make sense. I, for one of many, am so tired of being gauged via utility bills.

  • john moore April 12, 2017, 6:30 pm

    I have always favored buying out Cal-Am, but I favor the buy out by the County with the requirement that management of the purchased business would be by contract,with a private company, like Poseidan, with proven records of producing and selling water at a reasonable cost.There would be competitive bidding. The Monterey Water Management District performs at an F- level year after year. Its’ new recycling program is unproven and speculative. As M. Piero mentioned Poseiden built and manages the Ojai desal system. It sells water at about $2200 per acre-ft. There are other qualified companies to provide competative bidding.

  • bill leone April 12, 2017, 10:17 pm

    A lesson in reading comprehension for all the Free-Marketeers who interpreted Marc’s comment to suit their own purposes:

    “The time is NOW to take over Cal Am by exercising the power of eminent domain, and converting the water system on the Monterey Peninsula into a publicly owned system governed by our public officials. As a lifetime resident of Monterey County, I am tired of being abused and “held-up” by a New Jersey company that is now charging us nearly the highest water rates in all of the United States.”

    Fort Lee, New Jersey: the favorite retirement community of former Brooklyn Mafia Dons.

  • Michael Wellborn April 13, 2017, 9:56 am

    As an “outsider” (grew up in Carmel Valley, now in Fountain Valley), I would strongly caution thoughts of any arrangements with the foreign-owned Poseidon company. Their business practices appear similar to Cal-Am’s “anything for a buck” history. Desal plants with 50 year contracts that mandate payment whether the water is needed or not (the Carlsbad plant water is now being “stored” in a reservoir for re-treating again later). I suggest keeping all aspects public and transparent. And “buh bye” to Cal-Am!

  • George April 13, 2017, 10:09 am

    Richard Kreitman and Jennifer A Haydu ~ Cal Am has a rate base, a paper value for CPUC purposes, of about $146 million. That’s a starting point. Eminent domain proceedings can include all of the mentioned factors, offset or modified by deteriorated infrastructure, new added infrastructure, lack of water rights, liabilities, and potential lost profits, “goodwill”, and to include comparables and financial statement data. All can be included in a determination of value by a court. The final value will be a court decision, not necessarily what Cal Am thinks it is worth (always an escalated number). Or an agreed upon value sometimes at the last minute, literally on the courthouse steps. Even with many added investments, the level of rates will be so high that simply offsetting profit, taxes and depreciation can make a purchase attractive. PWN is already working to develop a picture of all this in the near future.

  • bill hood April 13, 2017, 3:16 pm

    Hi Royal – you have the cachet’ that others don’t, including myself, so when you write an article like you just did, you get a major response — and that’s is great and what I am so glad to see. About 3 weeks ago I submitted a commentary laying out my perspective on the hurdles that PWN and all other activists would have to overcome to be successful – and it was ignored! That speaks volumes for the right way vs. the wrong way to engage an audience. Anyway, the hurdles are still there, but your kind of editorializing is way above mine and so I join all the others in thanking you for the spirit, true information and energy that you bring to the table. Hardly anyone else rises to that level.

    • Royal Calkins April 14, 2017, 6:35 pm

      I don’t think I saw the piece you’re talking about, Bill. Could you send it again?

  • john moore April 13, 2017, 5:41 pm

    As a start, I would like an analysis by our county government about the process, an estimate of the cost, and the means of financing the proposed buy-out. Also, an estimate of the buy-out effect on future rates. In my view, this information is a pre-condition to another initiative about buying Cal Am.

  • Karl Pallastrini April 13, 2017, 7:58 pm

    Hello Bill, the reason that people respond to Royal at significant level is because he has spent his career as a reporter, editor, newsroom wonk etc. etc. What comes through is objectivity. Royal reports the facts. There is seldom any emotional attachment…just the facts mam. Yes, he is often on the “other” side of the issues, but that is the watchdog gene that news reporters are born with. If I say it, or you say it…we are looking at opinion. With Royal comes a whole lot of research, apologies if something is mis-represented, and an invitation to get involved while getting off of our collective butts.

  • bill leone April 14, 2017, 5:34 pm

    For those of you who are not in favor of poisoning our water supply, here’s an article that makes a connection between CalAm’s criminal behavior & Fracking, by way of its indirect membership in ALEC
    (through the National Association of Water Companies):


  • Monterey Bay Conservancy April 16, 2017, 6:15 am

    Although I live in Aptos, I am very interested in our efforts to flow into Cal Am. The reason I say “our” is that I believe we need one Monterey Bay wide public regional water authority and entity to regionally address our water challenges. I began trying, unsuccessfully, to explain this to the SWRCB lat April 19, 2016 at minute/second 11:18 @ http://www.thebestthatmoneycantbuy.org .

    Very unique in the state of California, we here in the Monterey Bay are hydrologically isolated from the rest of the state with no imported/non local water (unless you believe as many used to (?) that our local aquifers here are recharged from the Sierra Nevada?). However, many of our important aquifers here cross jurisdictional lines of the agencies/entities that “manage” them for many decades. Result? https://www.facebook.com/MontereyBayConservancy/photos/a.215880731767365.54128.177055962316509/983979478290816/?type=3&theater … worst mismanagement/critcal overdreaft in the state if not the country.

    A desal plant, and we don’t need more than one properly sized regional effort, and recycling produces new water. Public acquisition of Cal Am in and of itself produces no new water for urban uses, which is needed. In California, ag uses over 80% of the water yet is only 2% (?) of California’s economy. Here it is different, but it is certainly not sustainable (please see: http://www.lawandorderliberal.com ) and that is only because ag essentially controls and uses the vast majority of our local water and they export it in their product. The problem is that they also critically overdraft and permanently ruin and are chronically and incessantly mining out, permanently wasting, expropriating, and decimating our ground water commons for decades, as well. An acre of irrigated land, value of $50k-$100k, uses around 3 acre feet per year. Buying or leasing this land and rededicating the use of this water or a portion of it to urban use is a very prudent and financially and environmentally sound investment which produces new water and potentially plenty of it (please see http://www.thebestthatmoneycantbuy.com for one example which also produces a true 9000 “Monterey Bay National Estuarine Monument” which runs through Elkhorn Slough through the Watsonville Wetlands to Manresa Beach), conserves and recharges 14,885 gallons per minute (27,00a/f/yr) in perpetuity, and provides 10% of this or 2700 a/f/yr of pumped water for urban use in SqCWD and Santa Cruz.

    Another possibility for this approach is presented by the Castroville Reclamation Project water. The participating land owners of thousands of acres in Blanco Tract are entitled to this water. If this land or a portion of it were leased, both ground water pumping could be stopped there and the reclamation water attributable to this property used by Cal Am for your needs there. Maybe try calling Rob Goodwin at Cooper Land Company? http://www.cooperlandco.com/ . I think they may have a few acres out there of the best farm land in the World.

    • Monterey Bay Conservancy April 16, 2017, 6:19 am

      …whoops, sorry. Wrong link. Here is the right one … “Here it is different, but it is certainly not sustainable (please see: http://www.lawandorderliberal.org )”

      • Jane Haines April 27, 2017, 2:19 am

        Who are you and why don’t you sign your own name? Jane Haines

        • Royal Calkins April 27, 2017, 9:56 am

          His name is Douglas Dietch, who has been active in Santa Cruz County water politics for many years

  • bill hood April 16, 2017, 10:32 am

    With respect to getting rid of Cal-Am, a chasm seems to exist between those you who believe the Water District is the obvious public agency to take over, assuming that the next Measure O succeeds. Wearing blue shorts in the other corner are those who believe the District would only represent going from bad to almost as bad or worse. There are probably at least two options (although I am sure there are more) that are being considered – a single governmental entity (e.g., City of Monterey) or a combination of local governmental entities (e.g., a JPA).

    There are some good facts suspporting the opposing positions, but there are also some not-so-good ones. I would like to see a clear and concise position paper as to why the District is the only agency that makes sense, backed up by facts, and vice-versa with respect to the other options. Only then can the general public have a grasp of what is at stake and confirmable facts to back up the various positions, and then be educated to make a good decision at the ballot box.

    For starters, I think the Distirct, with a less-than-favorable history, and with the political limitations imposed by the Water Code Annex that created the district, has a very large PR hurdle to convince those who believe it has failed time and time again. On the other hand, it is the only agency out there with a water-related focus, with a trained staff, as strong general manager and the potential of a board that just might swing around from past positions.

    With respecdt to using another governmental entity, in this case, the City of Monterey, on the positive side the council seems to be in support of taking on that responsibility of being the public water provider. But can they really do it? They don’t have the staff, although they could hire ex.-Cal-Am staff; they have the distractions of running a city, which muddies its primary focus; and there has been no information that I know of that has analyzed the costs and strategies for handling those costs, such that ratepayers are not affected negatively.

    With respect to creating a JPA – I think that the biggest positive is that two or more cities (or other agencies as well) would collaborate, make use of a larger group of staffers, and theou hav sharing of costs.
    The biggest negative is that all you have to do is look at the history of Monterey County JPA’s to see if they are both proven to be efficient and cost-effective with public funds and with a list of strong results. Look at the firestorms that surround the mayor’s water agency, FORA and others. It could be nothing more than same-old same-old.

    Anyway I’d be interested in seeing the arguments and how they stand up to a detailed analysis.

    • Monterey Bay Conservancy April 19, 2017, 5:03 am
      • bill hood April 19, 2017, 5:53 pm

        I understand the Gov. Code sections relating to the formation of JPAs. What DeepWater has done is only hint at a structure – they will build, own, operate and sell water from their desal facility to a “JPA”, which presumably would have the capacity and infrastructure to deliver the water to Peninsula customers. Sounds good, but the reality is not so optimistic. What agencies would get together to form a JPA? What would their financial, staffing, knowledge, etc. give credence to the new JPA’s ability to perform? To what extent would the JPA be composed of municipalities that haven’t demonstrated their ability to plan for the future, be open and accessible to their constituents and the strength of commitment to do what is right when it comes to protecting constituents from unfairly high and disabilitating rate increases?
        Deep Water needs to put the flesh on the bones. In order to even analyze what they are proposing, anyone would need a lot more detail on the structure and participation of how the process would work, how it would paid for, what the cost of water to the tap would likely cost, and what would be immediate, if any, benefits to stranded ratepayers. There “model” is saying that the US will initiate a medical plan for all citizens by creating an agency to do it.

        I am not impressed by their proposal.

        • Monterey Bay Conservancy April 20, 2017, 7:03 am

          That’s why there is a question mark behind my comment “DeepWater JPA model?”, bill?

          We need an outside and most powerful and competent “authority” to help us here in the Monterey Bay do the job that we have never and will never be able to accomplish ourselves because of the insurmountable self interest of the transnational BIG AG Community and pc demo “sanctuary” politicians and their entrenched for life supporting other sworn “public servants” who, for their self interested political objectives in politically controlling the Monterey Bay (and all of California?) and fostering and increasing illegal immigration from south of our borders in all manner possible for very obvious reasons? (another ?, bill?) … http://www.lawandorder liberal.com ?

  • john moore May 7, 2017, 9:21 am

    In my recommendation that Marina Coast Water District contract to manage the new water company, I have in mind that MCWD has slant well rights that are free of the legal impediments hanging over Cal Ams slant well location. An insurance provision re the MCWD slant well sites could be part of the agreement.