Residents of Felton have been paying close attention to a local TV advertisement targeting voters in nearby Monterey. “In 2005, we voted for a public takeover of our water system,” says Felton music teacher Beth Hollenbeck, on screen. Hollenbeck pulls a water bill out of her mailbox: “If I knew then what I know now, I wouldn’t have voted for it.”
The ad was paid for by California American Water (also a supporter of KAZU), the corporation that once owned Felton’s waterworks, and which could lose ownership of Monterey’s system too if voters pass Measure O on the June 3rd ballot. In the commercial, Hollenbeck calls Measure O “a risk we can’t afford.” Off camera, she says the jury’s still out on Felton’s newly public system. “Maybe I feel in the long run that Cal Am might be a little more accountable to us,” she explains, “but I don’t know that we are worse off, no, I don’t.
American policy debates often hinge on one simple question: public or private? Across the US, cash hungry local governments are increasingly looking to privatize public services to help maintain aging infrastructure. But like people in Felton, some rate payers on the Monterey Peninsula have bridled at ongoing rate increases and alleged mismanagement of their water system under Cal Am.
Advocates in Monterey say a public takeover could reduce spending on water in the long run. But Hollenbeck says activists in Felton overstated the cost savings that have come with joining the public San Lorenzo Valley (SLV) Water District. “When I did the commercial,” she says, “what I really wanted to say was ‘guess what?’ It costs money to run a water company, whether you’re private or public.’”
Barbara Sprenger, an organizer with Felton FLOW, the group that led the local campaign for public water, says Cal Am’s message on Felton misleading. “They have been saying that we’re dealing with huge rate increases here, without mentioning that we were dealing with huge, much larger, rate increases regularly from Cal Am,” she says.
When she first got involved in 2002, Sprenger was motivated mainly by a desire for more public input on water. She says that much really has changed since the SLV Water District took over. “Everybody who governs it, we see them in the supermarket, we can call them up on the phone. Water’s just too important to have so little control over.”
One of those people is Rick Rogers, Director of Operations for the Water District. In the hills of Felton, Rogers unlocks a gate and walks down a narrow set of stairs to the Fall creek fish ladder, a deep pool where a series of concrete steps help migrating salmon swim upstream. This is the source of Felton’s water.
“When we took over, this fish ladder and intake was neglected,” Rogers explains. “The maintenance was almost non-existent. It was just patched–sandbags, go plug the hole. We have $200,000 into just saving what was here.”
Even after six years of steady repairs, Rogers says much of Felton’s system is no better—it’s littered with defunct equipment, leaky tanks, and pump houses full of exposed wiring.
Though San Lorenzo Valley inherited these problems from Cal Am, Rogers acknowledges that Cal Am inherited many of them from the previous owner.
According to Heather Cooley, a water researcher with the Pacific Institute, old water systems around the country have similar maintenance problems. “We have not been investing in these systems to repair them, to replace them.”
But Rogers says the Water District had no opportunity to see what shape the system was in before they bought it. Their appraisal valued it at $7.6-million; at one point, Cal Am said it was worth $46-million. “We had a tour, one tour set up,” Rogers says. It was given by You couldn’t tell from the tour what was working and what wasn’t.”
The reason for that is simple: Cal Am’s system was never for sale. “It’s not a willing buyer willing seller situation where you open your doors and allow someone to come in and let their due diligence team decide what to do,” says Joe Conner, who represented Cal Am in negotiations with the water district.”
As a result, the only way for Felton to buy it was through eminent domain, and any due diligence had to be done by an independent party hired through the courts. “This is an adversarial proceeding. If they’d wanted a more detailed inspection, they could have hired another engineering firm, and they could have asked the court,” Conner says. “It would have cost more money to do that.”
With both sides wary of the costs of a trial, they settled out of court. In the end, Felton spent $13.4-million, about 20% more than what residents had voted to spend by taking out a municipal bond.
“Personally I think we paid too much for it,” says John Fasolas, another member of Felton FLOW. “But they knew how much we had, so they were able to work it out to take what we had.”
Six years after Cal Am left town, it’s impossible to be certain whether Felton rate payers are actually saving money. Including payments on Felton's 30 year bond, Fasolas’ water bills come out to about $14 more each month than he paid before the takeover. There’s no way to know how much rates would have gone up if Cal Am had stayed on, but Fasolas says he’s gotten something far more important: “water independence.”
“For me, it’s a really great feeling knowing that we’re in control, that our environment, and our environmental concerns, are how our district operates. And the monies we spend stay right here in our valley.”