The Monterey Peninsula Water Management District held a public hearing Tuesday evening on the feasibility of taking control of the region's main water system.
They had to bring in extra chairs in order to accommodate the more than 200 people who attended the hearing. Water Management District General Manager Dave Stoldt introduced John Mastracchio of Raftelis. The consulting firm studied the feasibility of the district taking control of California American Water (Cal Am), the current water supplier to much of the Monterey Peninsula area. Measure J, passed by voters last year, directed the district to conduct the study and then, if feasible, buy Cal Am.
With a powerpoint presentation on a large screen behind him, Mastracchio explained how his firm evaluated public ownership of the water system versus ownership under Cal Am.
The conclusion, the buyout is feasible and would save water customers money. Raftelis estimated the value of Cal Am at just over $500 million.
Almost 40 audience members weighed in with public comment for nearly an hour. About half were in favor of the take-over and the other half had concerns or were outright opposed, like David Chardavoyne of Monterey.
“I asked this board to find out how many class A utility company takeovers in California have resulted in lower rates for customers. In my experience, there are none,” said Chardavoyne.
Phil Wellman, who’s with Public Water Now, argues prices are already high. According to a 2017 Food & Water Watch survey, Cal Am customers pay some of the highest water rates in the country.
“The numbers that have been discussed here tonight can certainly be debated and they should be debated. But one thing that is... that can't be debated is the skyrocketing rates that the people in this community have had to pay over the last 20 years,” said Wellman.
Cal Am took control of the local system over 50 years ago. Cal Am Vice President Kevin Tilden says the Water Management District is good at what they do.
“But they have not run a water system before,” said Tilden.
Speaking before the hearing in the hotel lobby, Tilden argues that Cal Am is worth at least twice what the feasibility study concluded and he says the report is incomplete.
“We are surprised it did not include other aspects of feasibility, legal, technical, operational, managerial. It really doesn't address any of those,” Tilden said.
Tilden added he is confident the District will likely lose in court.
The organization that has been pushing for a public takeover of the water system is Public Water Now. George Riley is one of the founding members. He argues that the monopoly that Cal Am has over the local water supply is a problem.
“There is no competition in a monopoly. That's where I draw the line. And if it's a monopoly, there's gonna be an enormously strong public oversight,” said Riley during an interview recorded before the hearing.
And he says the California Public Utilities Commission doesn’t provide that oversight.
“I just felt like it was too much private and not enough public,” Riley said.
The Water Management District’s Board of Directors will meet two more times this year. They will then take a final vote early next year on whether to move forward.
Cal Am is one of KAZU’s many business supporters.