Archive | February, 2013

‘Nowaterdeal': Desal Plant Opponents Will Reach Out to Thousands of Orange County Voters

‘Nowaterdeal': Desal Plant Opponents Will Reach Out to Thousands of Orange County Voters

By John Earl
Surf City Voice

A growing number of county ratepayers, inspired by the late Gus Ayer, and opposed to a plan by Poseidon Resources Inc. to build an ocean desalination plant in Huntington Beach, have a message for the Municipal Water District of Orange County (MWDOC) and its 28 member agencies:

No more secret negotiations or deals with Poseidon and don’t make us pay an additional $5 billion in local water bills—$8,500 per ratepayer—over the next 30 years for water that we don’t need.

Thirty-years is the time period in which the water agencies that contract with Poseidon would be required to pay for Poseidon’s desalinated water, whether it is needed or not, according to the water purchase agreement (WPA) made public by MWDOC in January.

The buyers “will agree to take (on a ‘take if delivered’ basis) [56,000] acre-feet per year of Product Water (the ‘Committed Amount’),” the WPA states. And if the buyers don’t take that amount of water, they will, “nonetheless pay Seller a per-acre foot charge to be set forth in the Contract…”

The WPA is not final, but it is the culmination of a decade-long relationship between MWDOC, its water agencies, and Poseidon.

The opposition group, heralding online as www.nowaterdeal.com, plans to spend tens-of- thousands of dollars to inform other ratepayers in high propensity voting areas of the county about Poseidon’s proposed “take or pay” contract, asking them to urge their local elected officials not to sign it.

Nowaterdeal is a coalition of members of Residents for Responsible Desal and other local ratepayers, including members of the Surfrider Foundation, League of Conservation Voters, and Orange County Coastkeepers, who at least until now had been fighting an uphill battle against Poseidon’s well financed lobbying efforts and a marketing campaign (largely unquestioned in the county’s major daily newspaper) that depicts its desalination plant as a future fallback point in case of prolonged drought or a natural disaster that would disrupt the flow of water to the public.

Poseidon would risk private investor flight without the guaranteed income, but take or pay would be risky for ratepayers if, as happened in drought drenched Australia, if the desalination plant were to sit idle due to lack of need. Currently, the Metropolitan Water District of Southern California (MWD), which sells water to MWDOC, has more surplus water stored up now (enough for 2.5 years) than ever before—testament to the ability to create backup reliability water without Poseidon.

Ocean desalination’s high maintenance and construction costs—and much higher energy costs—make it too risky, nowaterdeal says. Stuck with higher water rates and an idle desalination plant, ratepayers would fall into a rate trap. “As rates go up, people use less water” and “lower demand results in even higher rates, with fixed costs of the entire system spread over fewer units of water.”

Pimping2

Gus Ayer: MWDOC is pimping for Poseidon and should be eliminated. Photo: John Earl

The high cost-prediction is from information provided by Poseidon in the WPA and factors in conveyance and maintenance costs. With an inflation rate of 3.5 percent factored in, that means an estimated cost of $1,795 per acre foot for the desalinated water, compared to $285 per acre foot for local groundwater and $835 per acre foot for imported water, nowaterdeal says.

Acknowledging the higher cost of desalination, Poseidon VP Scott Maloni recently told the OC Register that Orange County residents have to ask, “What is the value of that reliability to them?”

But the underlying push for desalination plants along the California coast by the desalination industry and other development related business interests is not about drought relief alone, as MWDOC/MWD director Brett Barbre pointed out at a recent MWDOC committee meeting.

Barbre supports the Poseidon project and a smaller, less controversial, desalination project envisioned (but far from certain) for Dana Point in south Orange County. He also thinks that ratepayers throughout the county should have to pay for both projects on the basis that they would benefit everyone, even in water districts that say they don’t want or need the water.

“I believe that desal is not only for reliability. It’s also for growth,” he said. “And there are folks on the environmental side who don’t want any growth and they think if you don’t build water projects you can conserve your way to provide enough water for everybody. And that’s not ever going to happen.”

Although most of Poseidon’s opponents have always been concerned about the environmental effects of ocean desalination, the main focus of their current campaign is economic, while advocating for the development of proven and much cheaper water sources, including the Orange County Water District’s (OCWD) groundwater replenishment system, capturing rainwater, and conservation.

To start, the group will focus on about 50,000 voters in 14 north county cities, including Anaheim, Brea, Buena Park, La Palma, Orange, Newport Beach, Santa Ana, Seal Beach, Tustin and Westminster.

Twenty Orange County water agencies had signed non-binding letters of intent or memorandums of understanding with Poseidon to purchase, cumulatively, over 80,000 acre feet of water each year. Since those non-binding agreements expired in June, 2011, not a single agency has yet to renew.

Correction 02/05/2013: Eighteen agencies have signed Letters of Intent that have no expiration date, according to Karl Seckel, MWDOC’s acting General Manager. Those agencies, with the exception of Fullerton, are slated to participate in “working group discussions” regarding Poseidon during the 2012 fiscal year. Four other agencies are participating in working group discussions but have not signed LOIs. Participation in working group discussions is contingent upon signing a confidentiality agreement with Poseidon, but not all agencies that signed an LOI signed that agreement. The MOUs, which one presumes carried more weight, have all expired.

As Poseidon works to form an agreement with MWDOC and its member agencies, it requires all parties involved in project discussions to pledge absolute secrecy at Poseidon’s whim.

That lack of transparency and the overall elitist/exclusionary attitude at MWDOC and other OC water agencies, including their secret and arguably illegal meetings with Poseidon–all observed by a growing number of citizen spectators at water board meetings, as well as the company’s financial support of an ethically challenged hit piece in the recent Huntington Beach City Council campaign, have inspired Poseidon’s opponents, not only to challenge its political hegemony with a renewed vigor but to question the nature of Orange County water management as whole.

A temporary setback occurred for nowaterdeal when its chief strategist, former Fountain Valley mayor Gus Ayer, a master at crafting successful political campaigns in Orange County, died last week.

Earlier in the month, at a recent joint meeting of MWDOC and OCWD, Ayer praised the latter for its groundwater replenishment program and overall good management, but accused MWDOC of “mission creep” and “pimping for Poseidon.”

He also questioned whether MWDOC should exist.

“It’s time for OCWD to take a very close look at taking over these [MWDOC’s redundant] functions and eliminating MWDOC,” he said. Ayer expanded on that theme in a column written just before his death and published in the Surf City Voice.

Ayer’s untimely death saddened his colleagues but his upbeat attitude continues to motivate them.

“Gus’s last words to me were ‘Give them hell’”, recalled former Huntington Beach mayor Debbie Cook, who, during the past two years, has actively campaigned for greater transparency in water management.

“That was his way of saying that, if we don’t participate in democracy, we deserve the inevitable results. Nobody can replace our friend’s skill set, but he sparked a fire that emboldens us to carry on.”

 

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Posted in Energy, Environment, Headlines, MWD, MWDOC, Poseidon, Water, Water Boarding3 Comments

Can the Municipal Water District of Orange County Find A Reason to Exist?

Can the Municipal Water District of Orange County Find A Reason to Exist?

Editor’s note: Gus Ayer, the former mayor of Fountain Valley, was probably Orange County’s top progressive political strategist and activist. He passed away on Feb. 13, 2013. At that time he was about to unveil a major grassroots campaign to inform the county’s water ratepayers and their elected public officials that the nearly $1 billion ocean desalination plant proposed for construction in Huntington Beach was unnecessary and would cost about $5 billion extra over the next 30 years. That campaign, which he played a major role in organizing, is still underway. He submitted this column to the Surf City Voice a few days ago.

Analysis and Commentary
By Gus Ayer
Special to the Surf City Voice

Sometimes it’s fascinating to watch a public agency as it flounders around trying to find a reason to exist.

Lately, the Municipal Water District of Orange County (MWDOC) is flailing like a beached whale.

After a Brooke Edwards Stagg OC Register article exposed the secretive nature of negotiations with Poseidon Resources for “Take or Pay” contracts on January 22, MWDOC scrambled into damage control mode.

  • Their General Manager was terminated after a hastily-called special Executive Session on February 1st, and is now relegated to a back room until his contract expires a few months from now.  Meanwhile an interim General Manager takes over his duties.
  • A press release linked to the term sheet of the Poseidon’s proposed “Take-or-Pay” contracts and a report on the costs of new pipeline projects was released and posted on Poseidon’s website. Sadly, it lacks the details that would allow any accurate analysis of the long term costs of the proposed plant.
  • MWDOC  is coming under increased scrutiny as a grassroots coalition begins a major public outreach program  to advise ratepayers how much they will pay for expensive desalinated water they don’t need.
  • IRWD Director Peer Swan publicly chastised them at a recent meeting for ignoring all of the efforts that had been made on a regional level to provide for water reliability, warning that they were recklessly advocating a project that would become a “stranded asset”
  • Simmering disputes between different regions of the county threaten to erupt again, which would lead for another round of talks about cities seceding from MWDOC or just eliminating this agency and their bureaucracy.

Just What is MWDOC?

The hierarchy of Water districts can be confusing.

We pay our water bills to local water agencies, including many individual cities, independent agencies like the Irvine Ranch Water District, and even one privately owned water company, Golden State Water.

One regional agency manages our groundwater supplies (Orange County Water District).

Another super regional agency manages imported water for most of Southern California, the Metropolitan Water District, commonly known as “MET”.

Then we have MWDOC, which was established in 1951 to administer purchases of imported water from Met on behalf of smaller Orange County cities and unincorporated areas.  MWDOC’s original role role was just as a middleman between MET and 16 small cities with a population of around 80,000.  Three cities (Anaheim, Santa Ana, and Fullerton) were big enough to buy water directly from MWD.

In the boom days after World War II, MET was seeking customers to buy the water from the Colorado River Aqueduct. Orange County developers were looking for more water to meet the demands for swathes of development that would replace agriculture and ranching.

What Does MWDOC Do?

MWDOC has seven elected directors. They appoint four directors to the MET board. They share a headquarters building with the Orange County Water District in Fountain Valley.

MWDOC holds seven redundant meetings a month, each of which guarantees a $221.62 daily payment to each of its seven directors, who typically  attend all committee meetings and also receive benefits and health insurance.   Directors also travel, with a budget over $30,000 a year to attend local, state and national conferences (not including their meeting payments).  If you are one of the directors appointed to MET, you also get paid to attend MET meetings.

In a recent year one director, Director and MET rep Brett Barbre was paid $51,859 for attending 242 meetings and also cost rate-payers $17,435 for benefits, including pension and health insurance.  This wasn’t his day job. He also is a lobbyist for clients like trash-hauler Athens Services.

In an OC  Register Watchdog  http://taxdollars.ocregister.com/2010/03/05/when-brainstorming-costs-nearly-500000/52647/  article, he is described as a “political operative,”  and campaign finance records show that Barbre was paid $20,000 plus expenses for consulting on Troy Edgar’s 2012 campaign for State Assembly.

MWDOC’s Mission

In addition to doing the accounting for MET purchases and sending four people to attend meetings of MET’s 51 person board, MWDOC has struggled to expand its mission to include:

  1. Administering Water Efficiency grants for Orange County cities trying to do the bare minimum of effort under statewide mandates.
  2. A few education programs
  3. Sponsoring breakfasts, dinners and seminars where vendors, consultants and lobbyists can hobnob with elected officials, all subsidized with ratepayer funds and agency staff time.

MWDOC and Desalination

MWDOC directors seem determined to play in the world desalination: turning sea water into drinking water, although MWDOC has no construction management experience and no experience in operating water systems. We might attribute this ambition to their sense of impotence with the bigger players, boredom, or the need to justify their existence. Beware of arrogance combined with incompetence—it often leads to disastrous outcomes.

It’s unclear that MWDOC has any legal authority to undertake any efforts in this area.

Historically, the cities and water agencies that belong to MWDOC have chafed at their budgets and MWDOC’s financial management.  The underlying tensions became so high several years ago that South County agencies looked at seceding from MWDOC to form their own agency. In a settlement agreement, MWDOC committed to a new compact that made several changes,

1.)    MWDOC agreed to change the way it billed for its services to lower costs for South County agencies.

2.)    MWDOC agreed to a specific list of services that they would undertake and differentiated between Core and Choice services

3.)    MWDOC agreed to listen to South County agencies regarding appointments to the MET Board.

4.)    MWDOC agreed to reduce their bloated reserve funds.

Under this agreement it’s very clear that spending on desalination projects is listed under the Choice category, where cities have a right to participate. Although Director Brett Barbre speaks about changing what’s in each category, the actual agreement signed by the cities has no mechanism to do this. Barbre favors placing ocean desalination in the Core category, but any attempt by MWDOC to redefine Desalination projects as core projects would likely lead to renewed secession attempts or lawsuits.

Calls for Abolishing MWDOC

How many water agencies do we need, each with their own expenses for directors and their benefits, lobbyists, consultants and public relations staffs? MWDOC directors recently discussed a project to renovate the exhibits in the hallway that they share with OCWD, with a budget of $1.3 million dollars plus staff time.

The Orange County Grand Jury recommended consolidating water agencies to reduce costs and provide services more efficiently. Others have recommended that MWDOC reduce its role back to the simple accounting functions it was originally designed to achieve, with its other functions transferred to other agencies with a strong record of success, like the Orange County Water District and the Irvine Ranch Water District.

We think that’s a great idea. MWDOC has outlived its usefulness and their continued mission creep wastes the ratepayers’ dollars and creates mischief. MWDOC’s functions can easily be absorbed into other agencies and it’s time to start a process to sunset this relic of a bygone era.

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Posted in Environment, Headlines, MWD, MWDOC, Water Boarding3 Comments

Commentary: Mesa Water Drops Fiduciary Duties as Ratepayers Pick Up the Tab

Commentary: Mesa Water Drops Fiduciary Duties as Ratepayers Pick Up the Tab

By Debbie Cook
Special to the Surf City Voice

(Editor’s note: This story has been republished below to correct a typo that could not be removed from the http link)

Over the past several months I have been trying to get to the truth behind Mesa Water District’s obsession with Poseidon Inc.’s proposal to build an ocean desalination plant in Huntington Beach.

Since 2009, the water agency has gone from a typical local water provider to become the State’s biggest booster of ocean desalination, spending tens of thousands of dollars in cash, resources, and staff time for a project that makes zero business sense.

So I spent the last week perusing Mesa’s board agendas.  I now have a better understanding of the cause of the agency’s new found love affair.

First and foremost, you need look no further than Mesa’s general manager, Paul Shoenberger.

Prior to his employment at Mesa, Shoenberger worked for Los Angeles County’s biggest desalination cheerleader, West Basin Water District. In 2009, he concurrently served on Mesa’s board of directors before applying and “winning” his influential position as Mesa’s general manager.

But Shoenberger has some explaining to do about that victory.

The position was advertised in March of 2009 with a filing deadline of May 8, 2009. But Shoenberger didn’t resign his seat until July 13, 2009.

He may have thought he was escaping the perils of Government Code Section 1090 by leaving Mesa’s board meetings prior to any closed session discussions about the position, but 1090 precludes the entire board from negotiating a contract in which one of its members has a financial interest.  Fortunately for Shoenberger, he needn’t worry too much—conflicts of interest are rarely prosecuted in Orange County.

During Mesa’s change of guard, the agency forgot his fiduciary duty to the public and signed a letter of intent with Poseidon to buy water its ratepayers would never need (Mesa proudly proclaims its self-sustaining independence from imported water sources), heralding a bond of cooperation to pursue approval of a huge but unneeded desalination plant that will add $5 billion in local water bills, an average of $8,500 per Orange County ratepayer, over the next 30 years.

Under the agenda item vaguely listed as “other,” and without a vote, the Mesa board gave Shoenberger the go ahead to start a secretive organization that would lobby on behalf of the desalination industry and developers. The board turned a blind eye and Shoenberger spent staff time and money as he saw fit to create CalDesal. Mesa board member Shawn Dewane became its first President.

CalDesal began with lofty goals, but its membership has remained static at about 70 in number — each paying $5,000 in annual dues — for two of its three years. That membership is divided about evenly between officials from public agencies, such as Mesa Water, and a mixture of corporate CEOs and consultants looking to make a killing in the client-rich environment that CalDesal was designed to provide for them.

CalDesal’s modus operandi is to lobby for desalination projects and regulatory “streamlining” — code word for rolling back fundamental environmental protection and permitting rules that stand in the way of desalination and unbridled development in general.

As CalDesal President and Mesa director, Dewane is reimbursed for travel expenses to the Sacramento based “non-profit” and receives a stipend for attending its meetings–courtesy of Mesa’s ratepayers.

Shoenberger argues that the agency’s support of CalDesal is no different than its support of many other non-profits…like the Orange County Business Council, another non-profit the agency joined shortly after Shoenberger became GM. Membership dues, staff time, stipend pay…it all adds up to an agency that has money and time to waste.

From my examination of public records, Shoenberger spends too much of the ratepayers’ time and dime promoting desalination and not enough time looking out for the interests of the agency that pays him over $230,000 per year.

Much of Shoenberger’s time is spent serving on the boards of outside organizations, as chair of the ACWA (Association of California Water Agencies) desalination sub-committee, as a member of the New Water Supply Coalition (another desalination lobby group), and as a board member of the Affordable Desalination Collaboration (a laughable oxymoron as desalinated water is many times more expensive than any other water source).  District resources support all of his outside desalination activities including his many speaking engagements and conferences within and outside the state.

Shoenberger and his board have also seen fit to reward consultants and contractors of Poseidon with Mesa contracts.  At a recent committee meeting, board president Jim Fisler and director Dewane recommended that Mesa hire Richard Brady and Associates, the same outfit that completed modeling work for Poseidon.

Mesa also uses Poseidon pollster Adam Probolsky who conducted a “push” poll to demonstrate public support of ocean desalination (of course, the ratepayers who were polled were not told the cost of the proposed water or project).  Probolsky works closely with Roger Faubel, a PR consultant who has worked for Poseidon for the past decade and who himself is on the Board of Directors of Santa Margarita Water District.  Faubel also does work for Mesa.  And last summer Mesa hired Phil Lauri who was the manager of West Basin’s Ocean Desalination program.

In earlier times, the media or enforcement agencies might have taken note of the many flagrant violations of public trust at Mesa, but not today.

Today, Mesa operates with impunity, even when it meets in anonymity–which it often does.

Since Paul Shoenberger became Mesa Water’s general manager, its board members have conducted at least 16 illegal closed-door sessions to discuss Poseidon.

Shawn Dewane refuses to comply with lawful public records act requests regarding CalDesal.

Adding insult to injury, the inquiring public is treated to rude remarks from the board, both in their presence and when they are unable to hear or respond.

The truth about Mesa’s obsession with the Poseidon project is obfuscated by its lack of transparency.

But what can we do about it?

Since the public can no longer look to the mainstream media, or to the District Attorney, or to the State Attorney General, it is up to each of us to participate in the democratic process, to attend Mesa Water meetings, to question, to expose wrong doing, and to propose constructive solutions.

As Mahatma Gandhi said, “Truth never damages a cause that is just.”

Let the truth about Mesa Water be told.

Debbie Cook is a former mayor of Huntington Beach and an advocate for greater transparency in public water management.

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Posted in Environment, Headlines, Poseidon, Water Boarding1 Comment


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