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Poseidon Desalination Poll Threatens Candidates and Misleads Voters

Poseidon Desalination Poll Threatens Candidates and Misleads Voters

By John Earl
Surf City Voice

It’s election time, so in September Poseidon Resources, Inc., released another push poll claiming widespread public support for its hoped for $1 billion ocean desalination plant that would be built next to the AES power plant in southeast Huntington Beach.

The poll, commissioned by Poseidon and conducted by Probolsky Research, is based on telephone interviews with 325 “likely voters, whatever that means, residing within the boundaries of the Orange County Water District (OCWD), which is leaning heavily toward buying all of Poseidon’s water or financing the project, which would transfer all of the risks to OCWD’s ratepayers.

The OCWD, which manages the Santa Ana River groundwater basin, provides about 65 percent of the drinking water for 19 municipal water agencies in central and northern Orange County.

Until recently, the Municipal Water District of Orange County (MWDOC), which retails imported water to 28 water agencies throughout the county, was the front agency for pushing the Poseidon project.

But only one of MWDOC’s members has signed an intent to buy any of Poseidon’s water. In theory, MWDOC could force its other members to participate under its “core” program, but that kind of bullying resulted in a revolt by its south county members once before, so force is an unlikely option.

The OCWD, on the other hand, can simply pass the costs of Poseidon’s desalinated water onto the producers, who pump its groundwater for a fee.

The poll concludes that, driven by a heightened concern about drought, voters support elected leaders who seek long-term water supply solutions that are “drought proof, such as desalination from the proposed Huntington Beach facility.” Continue Reading

Posted in Headlines, MWDOC, OCWD, Poseidon, Water Boarding1 Comment

Steve Sheldon Watch: OCWD director shills for Poseidon, again

Steve Sheldon Watch: OCWD director shills for Poseidon, again

Stephen Sheldon, the Orange County Water District’s elected representative from Irvine, continues to use his government position to benefit Poseidon Resources, Inc., the corporation that wants to build an ocean desalination plant in Huntington Beach.

By doing this, he may be risking the consequences of violating conflict of interest laws.

The OCWD manages the county’s groundwater basin and provides drinking water for 2.4 million residents by selling it to 19 municipalities and special water districts in the county.

The OCWD staff and board of directors are currently leaning heavily toward making ocean desalination part of its “water portfolio” through a business relationship with Poseidon.

Sheldon, a candidate for reelection in November, spoke in favor of Poseidon’s proposed project at a joint planning committee meeting of OCWD and the Municipal Water District of Orange County (MWDOC), held on July 23.

The Poseidon plant would cost about $1 billion and produce 50,000 acre feet of desalinated water a year.

In a plan conceived by OCWD and Poseidon, that desalinated water would replace the same amount of untreated imported water that the district currently buys from the Metropolitan Water District of Southern California (through its retailer MWDOC) for $593 per acre foot. That water is pumped into the groundwater basin.

Poseidon’s desalinated water would cost over three times as much, about $2,000 per acre foot, according to OCWD’s chief engineer, John Kennedy.

Until at least last December, according to Sheldon’s most recent Statement of Economic Interests (SEI), he worked as a consultant for Faubel Public Affairs, a partner of Communications Lab which lists Poseidon as a current client on its website.

Public officials who use their position to influence a government decision that affects them financially have an illegal conflict of interest under California’s Political Reform Act (CPRA) and California Govt. Code 1090.

But during the joint meeting, Sheldon tried to argue that Poseidon’s project would add to the county’s groundwater supply. In fact, as other water officials from OCWD and MWDOC pointed out repeatedly at the meeting, Poseidon’s water would not increase the county’s water supply—above or below ground—by a single drop.

“We’re just really replacing the amount of imported water we need to bring into the region,” OCWD’s Executive Engineer, John Kennedy, explained to Sheldon.

The Surf City Voice previously reported that during a May 21 OCWD board meeting Sheldon advocated for Poseidon and voted to send out Requests for Proposals to several consulting firms to analyze financing options for its desalination project, including direct OCWD funding and ownership.

Sheldon said “No comment” after that meeting when I asked him why he participated in the Poseidon vote. Then he chased after me as I left, only to demand that I tell him if I had electronically recorded his answer.

During a subsequent board meeting, however, Sheldon accused me of misrepresenting the facts about his relationship to Poseidon.

There was no conflict of interest, he said, because public officials are relieved of any potential charges related to a source of income that was discontinued a year or more in the past.

That’s true, but Sheldon’s SEI indicates that relief from potential conflict of interest charges won’t come until December, 2014, at the earliest. That’s because his SEI doesn’t indicate a termination date for his business relationship with Faubel; nor has Sheldon submitted an amendment to it since it was filed last April.

Theoretically, Sheldon could argue that Faubel Public Affairs and Communications Lab are separate businesses, despite public comments by CEO Roger Faubel and Lab founder Brian Lochrie confirming their close business partnership.

Lochrie, a former Faubel employee, started Communications Lab a year ago last April after leaving Faubel’s office with most of his staff and marketing clients, including Poseidon, according to a story at the time in the OC Register.

Lochire took his new entourage to another office in the same building, just down the hall.

Since Sheldon has not clarified his relationship to Poseidon (he did not accept an offer to meet or speak with this reporter at greater length), and any clarifying legal action against him is unlikely before election day, the voters must decide if the wall separating Faubel and Communications Lab is invisible and if Sheldon is being honest about being free of conflict.

But Sheldon’s election opponent, Newport Beach City Councilperson Leslie Daigle, may not be so shy about Sheldon’s Poseidon connection as well as his numerous other ethical and legal dilemmas.

Apparently, her campaign has been using a Facebook account called Steve Sheldon Watch to post links to documents detailing Sheldon’s numerous personal trials and tribulations, including hundreds of thousands of dollars of state and federal tax liens, contract violation lawsuits, and a divorce claim by his wife that he is stealing from his child’s $1 million “off-shore” trust account.

Two of the Facebook posts relate directly to Sheldon’s job as an OCWD director.

One of those posts questions Sheldon’s relationship to Poseidon based on in his 2012 SEI filing—in which he states he directly consulted for Poseidon, asking, “Is that legal since OCWD is studying if they want to buy Poseidon’s desalinated water?”

The other OCWD related post, “nothing but the best for Sheldon,” links to his OCWD expense reports and questions his $1,048 stay at the Ritz Carlton hotel in Los Angeles.

Daigle told the Daily Pilot that she was running against Sheldon because of the OCWD board’s involvement in frivolous lawsuits and its attempt to build a power plant.

Sheldon was one of three OCWD directors, including Denis Bilodeau and Roger Yoh, who as members of the district’s Water Issues Committee (WIC), met secretly with several members of the Anaheim Chamber of Commerce in October, 2013, to smooth the way for building the power plant on 20 acres of OCWD property in the so-called Ball Road Basin in the city of Anaheim.

Many Anaheim residents are opposed to the proposed power plant and want to use the lands for parks and recreation purposes.

The WIC meeting arguably violated California’s open meetings law, known as the Brown Act, so the Anaheim Chamber of Commerce protested. To prevent a lawsuit, the OCWD Board of Directors voted to promise to “cease and desist from prior challenged conduct.”

But the agenda for one of many secretly held OCWD Executive Committee meetings exposed by the Voice through a public records inquiry, reveals that the directors may have broken their legally binding promise.

The Executive Committee agenda for June 10, 2014, contains a discussion item about how to gain leverage for rezoning the Ball Road Basin—if a proposed deal with Competitive Powers Ventures to develop the power plant fell through—by supporting grant requests by Anaheim for developing pocket-parks.

“I believe we could leverage cooperation on these types of soft issues in return for the City helping us kill SB 26 and helping us rezone Ball Road Basin to commercial usage if the CPV deal falls through”, OCWD General Manager Mike Marcus wrote.

The OCWD seems to have backed off its efforts to build a power plant in Anaheim for now, but this month its board of directors voted to study building one in Fountain Valley instead as part of its Long Term Facilities Plan.

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Posted in Headlines, MWDOC, OCWD, Poseidon, Water Boarding6 Comments

‘Absolutely Infuriating’ OCWD Director Says About Secret Meetings

‘Absolutely Infuriating’ OCWD Director Says About Secret Meetings

By John Earl
Surf City Voice
Note: The characterization of the Executive Committee meetings as “secret” is the writer’s term and his term only. The wording of the opening paragraph was not meant to imply otherwise

An Orange County Water District director, infuriated over being misled by OCWD staff and other directors about secretly held and possibly illegal executive committee meetings, plans to speak out at the District’s next board meeting, July 16, the Surf City Voice has learned.

“Since I have been copied with agendas for recent executive committee meetings,” Director Jan Flory told the Voice in a phone interview, “I am very disturbed that they are not copied to the rest of the board before its meeting. The scope of issues it talks about far exceeds what I have been told the Executive Committee deals with.”

The previously secret agendas and other documents were shown to Flory by the Voice, which obtained them through multiple requests under the California Public Records Act.

Flory is one of three appointed OCWD directors on the ten-member governing board. She represents the city of Fullerton and started her term last January. The other seven board members were elected by districts.

Flory said she will ask Fullerton’s city attorney to look into the legality of the Executive Committee’s meetings. Continue Reading

Posted in Headlines, OCWD, Poseidon, Water Boarding6 Comments

Who Runs the Orange County Water District? You or Poseidon Inc.?

Who Runs the Orange County Water District? You or Poseidon Inc.?

Commentary
By John Earl
Surf City Voice

Dear Friends:

“A journalist is a good citizen of his or her community.”

That’s what I learned from the editor of the Eugene Register Guard, while taking a college journalism class at the University of Oregon, more years ago than I would care to remember.

But what he said is still true today. And that’s why I am asking you, in this editorial, to please show up and speak out at the Orange County Water District board meeting, Wednesday, June 4, about a proposal on the agenda to spend $50,000 or more on a study that will financially benefit Poseidon Resources Inc., a shady corporation that wants to build a $1 billion ocean desalination plant in Huntington Beach and make us pay for it, whether we need the water it would produce or not.

Here’s why I think it’s important:

As explained in the recent Surf City Voice story, at the May 21 board meeting of the OCWD, Director Stephen Sheldon voted on a contract proposal that will benefit Poseidon, even though documentation he has filed with the District and the County shows that he works for a consulting company that has Poseidon for a client.

The fundamental question regarding the contract vote that is continued on Wednesday night’s OCWD agenda is, who does the board represent and work for, Poseidon or WE the people? Continue Reading

Posted in Headlines, OCWD, Poseidon, Water Boarding2 Comments

OC Water Official Says ‘No Comment’ on Poseidon Vote

OC Water Official Says ‘No Comment’ on Poseidon Vote

By John Earl
Surf City Voice

“No comment!”

That’s all that Director Stephen Sheldon will say about his participation in a recent Orange County Water District discussion that was largely about the financial future of his former employer, Poseidon Resources, Inc.

Specifically, at OCWD’s May 21 board of directors meeting, Sheldon discussed and voted on a proposal to hire consultants to study various cost scenarios, including direct involvement by OCWD, related to an estimated $1 billion ocean desalination plant that Poseidon proposes to build in Huntington Beach.

The OCWD manages the county’s groundwater and provides 75 percent of the water used by ratepayers in its central and northern parts. With its Ground Water Replenishment (sewage recycling) program, the OCWD (with the Orange County Sanitation District) produces enough fresh, clean, drought-proof drinking water for 600,000 people, and there are plans to expand that program in the near future.

Under California’s Political Reform Act, elected officials are prohibited from voting on any project before them in which they have a financial interest or that would affect their economic interests or that financially impacts a company they worked for in the past year.

Working for Faubel

Working for Faubel

The ACT also requires elected officials to disclose financial sources and interests that by its definition cause a conflict of interest.

Those disclosures are contained in a yearly Statement of Economic Interests (700 form) that is on file for each board member at the office of the clerk for the Orange County Board of Supervisors.

OCWD meetings are also subject to California Government Code 1090, which is stricter than the ACT.

Recognizing indirect and direct influences that public officials have on decision making, Govt. Code 1090 prohibits any financial conflict of interest by those officials over contracts, even if the official isn’t voting; those officials, it says, “shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members.”

Under 1090, the board is prohibited from voting on any contract which financially enriches any of its members, even if such a member recuses himself from the matter.

Sheldon’s 2013 Statement of Economic Interests reports working for Poseidon, earning between $10,000 and $100,000 yearly. In 2014 he no longer lists Poseidon as a source of income, but does list Faubel Public Affairs, owned by political consultant Roger Faubel (a former director for the Santa Margarita Water District), as a source of $10,000 – $100,000 of income yearly.

On the FPA website, Poseidon Resources is shown on a list of former and current clients. But on April 1, 2013, according to an article in the OC Register, long-time Faubel business associate Brian Lochrie and his wife, Arianna Barrios, took over most of Faubel’s marketing clients and hired most of his staff under a new business name, Communications LAB, which now lists Poseidon as a client on its webpage.

Faubel and partner

Faubel and partner

But the break-off from Faubel was little more than a rearrangement of chairs, as both Faubel and Lochrie made clear to OC Register reporter Sarah de Crescenzo:

Faubel…said the two firms will have a strategic partnership.
Added Lochrie: ‘We’ll continue to work together closely. (Roger’s) been a wonderful mentor for the last 12 years, and I look forward to continuing to work with him.’

Consistent with that goal, Faubel’s website lists Communications LAB as its “partner agency”, and the “two” companies are located in the same building in suites 200 and 250 respectively.

Sheldon, carefully waiting for his post-Poseidon one-year voting restriction to end, recused himself at the April 2 (2014) OCWD meeting when the board approved the RFP for the Poseidon financial analysis.

But at the May 21 board meeting, Poseidon CEO Scott Maloni whispered that Sheldon could vote on the matter because his legal restrictions had expired a month ago. What Maloni didn’t say is that by working for Faubel, who Maloni spoke with closely throughout the meeting, Sheldon was again on the hook for potential conflict of interest charges.

The Discussion

Director Philip Anthony started the discussion on the proposed Poseidon study by calling it premature to spend the $150,000 that staff recommended to hire two of the five consulting firms that submitted proposals.

“The Poseidon project is hung up by a couple of big things happening at the state level,” he said. “The sad truth is that the Poseidon project…is not clearly defined at this point. It’s subject to huge change based on what these state agencies do. So I suggest we save our money, your money, for the time being.”

Director Kathryn Barr agreed with Anthony, who, after hearing (pro-study) supporting comments made by directors Green, Denis Bilodeau, Vincent Sarmiento, and Roger Yoh, made a motion to defer consideration of hiring the consultants until the Poseidon project was better defined.

Pensive Sheldon

Pensive Sheldon

Then Director Jan Flory boldly suggested that the board wait up to two years to see how Poseidon’s nearly identical Carlsbad desalination plant works and in the hope that new and better technology would emerge that will allow Poseidon to bring forth a more environmentally sound project.

At least three of the eight directors present wanted to table the financial analysis until Poseidon finished its obligation–due ten years ago–to properly study sub-surface ocean intakes. Poseidon claimed before the Coastal Commission last November that sub-surface intake is infeasible for is chosen Huntington Beach location due to the local ocean topography, but the Commission called Poseidon’s submitted studies inadequate.

The only feasible option, according to Poseidon, is to co-locate its desalination plant with the AES power plant, located in southeast Huntington Beach, and use its “once-through-cooling” (OTC) intake pipes to gather the needed 127 million gallons of water that it would convert into 50 million gallons of drinking water daily.

Flory, Anthony, and Barr also wanted to wait for an expected decision by the State Water Board on the future use of OTC, if any, for ocean desalination plants. The board banned once-through-cooling for power-plant use because of its deadly mass effect on marine life.

Also to be resolved before the Commission is an appeal by Poseidon’s opponents of an enabling Coastal Development Plan approved by the city of Huntington Beach in 2006.

Doing all of that would take at least another six months.

Frustrated by the concerns of three of his colleagues, Sheldon said it was unfortunate that they had been “listening to misinformation by some of the opponents of this [Poseidon desalination] project,” potentially causing a delay over environmental issues that had already been asked and answered long ago.

“I think we have an obligation to our ratepayers,” Sheldon said, “[and] to our representatives, that we continue to study, that we spend an amount of money that is necessary to move forward.”

Poseidon’s desalination project is “important”, he added, and “is going to be a great benefit in the years to come.”

Sheldon then called Maloni to the speaker’s podium.

Maloni explained the “urgency”, from Poseidon’s point of view, for the OCWD to act now.

“One of the questions raised at the Coastal Commission meeting [in November] was, who’s the customer? Where’s the water going to go? How do we know the water [production] needs to be a 50 million gallons per day plan?”

Scott Maloni

Scott Maloni, Poseidon Resources, Inc.

Maloni’s list of questions are important because at this time only one water agency in Orange County (Faubel’s former water district, ironically) is indicating a real interest in obligating (per Poseidon’s terms) its ratepayers to buy Poseidon’s desalinated water–which will cost three to four times the normal rate –even if that water isn’t needed.

“That question needs to be answered when we go back to the Coastal Commission,” Maloni told the board, “and it can’t be answered if you don’t take your first step in due diligence to evaluate the financial impacts of the project.”

But Maloni must also be concerned about the public relations momentum that Poseidon has lost in recent years as public skepticism about the need for its Huntington Beach project, if not ocean desalination itself, grows stronger.

That makes Sheldon’s role as the OCWD plant for the partnership of Faubel Public Affairs and Communications LAB vital to the future financial well being of their client, Poseidon Resources, Inc.

But Sheldon is loath to acknowledge his mole-role in public, as shown when he glared, silently, at Director Anthony when he pointedly asked Sheldon, “So, I guess you’re okay to talk about Poseidon now? … You’re free?”

Green answered for Sheldon, injecting his silence with a simple, “Yeah,” as if, “Well, yeah, of course he is!”

After some more discussion (including a hilarious soliloquy by Green about needing to complete the Poseidon desalination project so she wouldn’t have to use Porta-Potties), the board, under pressure from Director Denis Bilodeau, voted 7-1 (Green voted no, Dewayne and Sidhu were absent) to continue the item until June 4.

After the meeting, I approached Sheldon, Samsung tablet in one hand and pen in the other, and asked him what the difference was between past meetings, when he had recused himself from Poseidon related agenda items, and that night (May 21).

Alarmed by the question, he pushed himself back in his chair, and said, firmly, “No comment.” Again, I asked, and again the answer was, “No comment.”

As I started to walk away, Sheldon panicked and demanded to know if I had recorded our “conversation.”

“It’s a public meeting,” I answered, as I continued to walk out of the board room, ignoring him as he called after me. Green, who overheard our exchange, gasped, presumably in Sheldon’s favor.

After following me outside the board room, Sheldon approached and asked, again, “Did you record our private conversation?”

I tried to explain to him that it wasn’t a private conversation, but I did not tell him if I had recorded it or not. But he persisted.

“I don’t have to answer your question,” I told him, adding my own “No comment” when he pressed yet again.

“Alright,” Sheldon warned, “You’re going to hear from our lawyer.”

On Monday, May 26, I sent the following email to Roger Faubel, ccd to Director Sheldon:

Given Faubel Public Relations’ (sic) past contractual relationship with Poseidon and your firm’s (self professed) partnership relationship with Communications LAB, as well as your continued interest in the Poseidon project, as demonstrated by your presence and frequent close conversation with Poseidon’s VIP (sic), Scott Maloni, at the meeting, as well as Director Sheldon’s response of “No Comment” when I asked about his vote, is there any reason why the public should not assume that the director did not illegally participate in the discussion and subsequent vote on the Poseidon related RFP?

So far, I have not received an answer.

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Posted in Headlines, OCWD, Poseidon, Water Boarding5 Comments

Poseidon’s Water Boy: Mayor/Assembly-Candidate Matt Harper Quietly Pushes Desal Scam Past Ratepayers

Poseidon’s Water Boy: Mayor/Assembly-Candidate Matt Harper Quietly Pushes Desal Scam Past Ratepayers

Commentary by Debbie Cook
Special to the Surf City Voice

Ocean desalination in Huntington Beach makes sense…if you don’t really think about it. But thinking about it requires understanding all the consequences of Poseidon Resources’ proposed project.

Take for example the unnamed city staffer who probably thought he was brokering a good deal for residents when he negotiated 3000 acre feet/year of Poseidon’s water for 5 percent below the Metropolitan Water District of Southern California imported rate–a savings of $150,000. The problem is that if Orange County Water District (OCWD) approves partnering with Poseidon, the Replenishment Rate (RA) for all of the water we pump from the aquifer will rise by at least $103/acre foot according to their estimates. Huntington Beach pumps on average 20,000 acre feet per year. That means that rate payers will pay an additional $2 million per year for water to save $150,000.

Thinking about it seems to be the last thing that Poseidon and the water agencies want us to do. OCWD recently reneged on their promise to convene a citizen’s committee. Their Board of Directors along with the redundant Municipal Water District of Orange County (MWDOC) meets in almost anonymity, their agendas often obscuring the real nature of discussions, thus thwarting public participation. They certainly don’t want people really thinking about it.

HB City Councilmember Matt Harper. Photo: Arturo Tolenttino, SCV

HB mayor Matt Harper. Photo: Arturo Tolenttino, SCV

Huntington Beach’s Mayor Matt Harper similarly impedes anyone, including other elected officials, from thinking through ocean desalination. Within a two week period recently, Harper placed items on the agenda of the obscure West Orange County Water Board (WOCWB) and the City’s Intergovernmental Relations Committee aimed at hastening agreements that were not understood by members or staff.

At the WOCWB, he invited Poseidon’s pipeline consultant (former Huntington Beach City employee Howard Johnson) to present a pipeline lease arrangement sought by Poseidon. Information was not available prior to the meeting. The item was placed on the meeting agenda as an information item rather than an action item. California’s open meeting laws preclude action on information items, but this did not stop Harper. He attempted to garner the votes to move forward on the hiring of consultants and the writing of pipeline lease agreements. Even staff was caught off guard and not prepared to give their own presentation or answer questions. Fortunately the representatives of Westminster, Seal Beach, and Garden Grove were uncomfortable with acting so hastily and the motion failed.

Undaunted by this setback, Harper moved on to the city’s Intergovernmental Relations Committee. He invited a representative from MWDOC to present an item that their board has been pursuing for several years, to re-categorize desalinated water as a “core” service rather than a “choice” service. Few residents are familiar with this issue and even fewer are likely to have given it much thought. If MWDOC is able to move desalination from a choice service to a core service, then Huntington Beach and other North Orange County cities will be forced to subsidize south Orange County water agencies and their plans to build a desalination project to serve south Orange County. That makes about as much sense as Orange County subsidizing San Diego County’s desalination project.

The problem with those of us who have spent time thinking about the devil in Poseidon’s details, is that it turns you into a cynic seeking a semblance of rationality in the situation.

I can come up with only one rational reason for such blatant disregard for the public’s interest and the facts–money. Money turns many self proclaimed fiscal conservatives into corporate welfare campaigners.

A glance at Matt Harper’s recent campaign donors tells the story:

Poseidon Resources, $2,540; Simon Wong Engineering, $249; Geosyntec Consultants, $250; Arcadis, $250; AKM Consulting Engineers, $250; Psomas, $540; Parsons, $250; Nossaman, $189—a total of $4,518 from donors directly or indirectly involved in promoting the ocean desalination business.

Poseidon and their brethren have spent millions to keep you and your elected officials from making sense of their uneconomic and imprudent project. In effect, there will be no thinking allowed on their watch.

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

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Posted in Environment, Headlines, Poseidon, Water2 Comments

Mesa Water District: ‘Plz Don’t Circulate this Story!’ And Director Fisler Gets Even

Mesa Water District: ‘Plz Don’t Circulate this Story!’ And Director Fisler Gets Even

 

By John Earl
Surf City Voice

Editor’s note: See related story, here.

Getting thirty-minutes of interview time in January 2012 with the Mesa Water District’s general manager, Paul Shoenberger, wasn’t easy.

Spontaneous interviews with Mesa Water staff or members of the board of directors are discouraged whenever possible by Communications Manager, Stacy Taylor. Potentially tough or touchy media questions must be submitted to her in advance so that she can provide public answers that fit Mesa Water’s “unified voice” template.

At Taylor’s insistence, general interview questions were submitted in advance, but with my stipulation that there was no guarantee that I would limit myself to the exact wording of those questions during the interview or would not ask follow up questions.

The interview took place in Mesa Water’s executive committee room and was strictly limited to 30 minutes in the presence of both Shoenberger and Taylor and was recorded by both parties.

The main topic of the interview was CalDesal, the secretive non-profit organization that Mesa Water started—with ratepayers’ money—several years ago—and still helps finance with free labor and services even though CalDesal supposedly went its own private way—to promote ocean desalination projects and the desalination industry.

Contrary to California’s open meetings law, the general public is not allowed at CalDesal meetings nor is it generally given meeting agendas and minutes. Financial documents, the “990” forms that non-profits are required to disclose, are also denied repeatedly to this reporter by CalDesal’s president, Shawn Dewane, who is also a Mesa Water board member.

James Fisler

A cheap shot of Mesa Water’s Director James Fisler at a CalDesal mixer. Photo: provided by Mesa Water District

At the time, I didn’t know that the entire process was being directed by a public relations consulting firm, Laer Pearce Associates, that charged Mesa’s ratepayers between $265 – $350 per hour and that hundreds, if not thousands, of dollars would be paid to LPA to prepare Shoenberger for the interview, on top of what was paid to Mesa’s communications manager, Stacy Taylor, who gets close to $200,000 a year including benefits.

Emails acquired under the Public Records Act later would reveal how cynically manipulative Shoenberger, Taylor and LPA had been and that Mesa Water officials are motivated more by vanity than a desire to objectively inform the ratepayers.

Before the interview, their goal was to limit and control the questions as much as possible. After publication, the main goal was to contain the interview and to marginalize this reporter, while violating copyright law (republishing the story without permission), even though LPA president Laer Pearce and Taylor both agreed that the edited interview was fair and accurate.

An email from Taylor to Mesa Water directors and staff, and to LPA, for example, stated, in full:

  • Greetings: The attached story ran on the Surf City Voice blog on May 28, 2012. I purposely did not share the link to the post & removed all Surf City Voice links from the story. If you wish to share this, please do so using the attached instead of going to the website. I have also pasted the story below. So far, I found that Aquafornia (blog) has posted this story & it will probably be posted by OC Voice soon (I will let you know). Also, there is only one reply to this story as follows below the story. All in all, I think this turned out as good as can be expected from this type of media opportunity.

In another, earlier, email, Taylor wrote, “Plz (sic) don’t circulate the story link I sent you since doing so will add to its ‘popularity’ on the web (each click on the link will increase the story’s web ranking). Instead, I will capture the content for sharing. Please feel free to contact me any time re. this.”

Curiously, Ron Wildermuth, Director of Public Information and Conservation at West Basin Water District where Shoenberger had served for years as assistant general manager, was also included in the emails. “Good job,” he wrote to Shoenberger, “This is about as hostile and biased an interviewer I have seen in a while. You stuck to your points well.”

But Pearce praised the interview story.

“John Earl admits he is not objective, but insists he writes objectively,” he said. “On is (sic) story, I have to agree. He let his biases show, but told the CalDesal and Mesa Water stories fairly. Of course it helped that Paul tied everything to Mission and was not swayed off the core messages of the district.”

Although Pearce misunderstood my theory on journalistic objectivity (namely, that any reporter who claims to be without bias is either deluded or a liar, and that acknowledgement of that bias first and foremost to self helps facilitate honest, in-depth reporting), the objectivity he shows in his review of my story is also praiseworthy, despite the excessive cost to Mesa Water’s ratepayers.

Mesa Water Director (and current board president) James Fisler, was both complimentary and critical:

  • Very good job Paul! No dodging, just telling it like it is and sticking to Mesa’s message and priority of providing water. Good questions by Earl and good answers by you. Shows Mesa Water is on top of it’s (sic) mission. Earl’s only attempted “gotcha” of people at mixers is a poor attempt. Business and chambers have mixers all the time. They are very important parts of getting business done and learning new things by networking. Again, great job.

Fisler was referring to my photos of him and other directors at a CalDesal mixer-meeting attended by about 100 water officials, consultants and representatives of the desalination industry, but nobody from the general public.

In another email later that day, Fisler added:

  • “…If it was supposed to be a hit piece or something it failed miserably. I need to get a picture of Earl eating a donut at WACO.”

Fisler was expressing a grudge against this reporter that he still holds to this day. Writing under the pen name “nogrowther” on the Orange Juice blog, he lashed out at me over a year ago for publishing the detailed objections of Irvine Ranch Water district director, Peer Swan, to the Poseidon ocean desalination project proposed for Huntington Beach.

Fisler bitterly complained that I didn’t say the pledge of allegiance at water Municipal Water District of Orange County (MWDOC) meetings, that I was unkempt in appearance and that I liked to eat the donuts that are left out at MWDOC meetings for water buffaloes like him.

Eventually, Fisler’s “gotcha” wish came true, about a year later at the recent (May) joint-meeting of MWDOC and the Metropolitan Water District of Southern California (MET) held at the MWDOC board room in Fountain Valley.

I was sitting in one of the plebeian seats at the back of the room, directly opposite of the speaker’s podium, next to Debbie Cook, watching a presentation on MWDOC’s $120,000 video screen by MET’s general manager, Jeffrey Kightlinger about the Sacramento Delta. We need to spend billions of dollars fixing the Delta levies and to build a big double-barreled tunnel to import more water to southern California, he said.

Kightlinger was predicting the disastrous consequences to California’s economy of a Delta broken to pieces by a 100-year earthquake – coming any day now. Suffering from acute sleep deprivation, I desperately walked over to the refreshment table to help myself to a glazed twister.

“Anything to stay awake,” I thought. “Must…help…save…the…Delta.”

Out of the 100 or so water buffaloes present, only Fisler seemed unable to pay attention to the important message and had become obsessed, as I lifted the doughnut, with watching me like a hawk from one of the big black MWDOC directors’ seats behind the dais.

Smelling blood, the upcoming Delta catastrophe apparently gone from his mind, Fisler approached me.

Standing over me just a few feet away, dour faced, he shyly snapped a couple of photos of me holding my doughnut on a plate and kindly offering it up to him. He still didn’t laugh or even smile.Then he walked back to his seat where, perhaps, his attention returned to more important matters.

One other interesting tidbit found in the exchange of emails is a missive from Poseidon’s VP, Scott Maloni, an important member of Mesa Water’s inner circle of close friends. Always angry over my critical reporting of the dreamed of but still elusive Huntington Beach ocean desalination plant over the years, he refuses to answer my media questions and long ago banned other Poseidon CEOs from doing so. In his email to Shoenberger, he wrote:

“Paul – As I’ve told Kevin Hunt [former general manager at MWDOC], John Earl is not a journalist; you don’t owe him ‘transparency.’ Nothing good will ever come out of engaging him and he’ll never be someone you can trust or befriend. Best to ignore him or have your staff handle him.”

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Huntington Beach Mayor Proposes Coastal Commission Reject of Poseidon Desalination Permit

Huntington Beach Mayor Proposes Coastal Commission Reject of Poseidon Desalination Permit

Mayor Connie Boardman’s proposed letter to the California Coastal Commission, below, will be before the Huntington Beach City Council on Monday, May 6, 2013. Public comments will be heard at the start of the city council meeting. Her proposed letter is based on findings made previously by Coastal Commission (here). A debate on the pros proposed Poseidon desalination plant can be read (here) and (here).

May 6, 2013

California Coastal Commission
45 Fremont Street, Suite 2000

San Francisco, CA 94105

Dear Commissioners:

In 2010, the Huntington Beach City Council approved the Coastal Development Permit No. 10-014, conditionally approving the “Poseidon Seawater Desalination Project”(Poseidon CDP).

The city’s approval of the Poseidon CDP was appealed by several organizations, aswell as Commissioners Wan and Mirkarimi.

I have been authorized by the Huntington Beach City Council to communicate to you that the current Huntington Beach City Council does not support the project as it is currently presented.

We are requesting that the California Coastal Commission deny the Coastal Development Permit for the Poseidon desalination project in Huntington Beach when this issue comes before the Commission.

Sincerely,
Connie Boardman
Mayor
City of Huntington Beach

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A REBUTTAL TO  POSEIDON RESOURCES’  ‘FACT vs. FICTION’ FLYER

A REBUTTAL TO POSEIDON RESOURCES’ ‘FACT vs. FICTION’ FLYER

Editor’s Note: Opponents of an ocean desalination plant (Nowaterdeal) proposed for Huntington Beach, California, recently launched a major campaign to block the project (here). Poseidon Resources created a response to some of those claims and is circulating it publicly. The Voice republished it here. NoWaterDeal issued the counter rebuttal to Poseidon recently. On Monday, May 6, the Huntington Beach City Council will consider a proposal (here) by Mayor Connie Boardman to recommended to the California Coastal Coastal Commission to deny the Coastal Development Permit for the project when it considers the project this summer.

By NoWaterDeal.com

Recently Poseidon Resources, through their media produced an open letter titled: “Don’t be misled by anti-desalination campaign mailer. Get the facts here.”

This letter makes a futile attempt to dispute the facts surrounding the Poseidon Huntington Beach Seawater Desalination Facility as presented in the No Water Deal With Poseidon mailer and website, which can be seen at www.nowaterdeal.com. Below we directly address the statements in their letter with the real facts regarding the project.

Statement: “Desalinated seawater will replace the need to import water; thus eliminating the imported water costs; however, in their calculation, opponents failed to deduct the avoided cost of imported water. This is an uninformed mistake.”

Fact: Jeff Kightlinger the Executive Director of The Metropolitan Water District (MET), the main water provider for Southern California has stated that the MET will not import less water from the delta or the Colorado River due to the existence of the Poseidon Huntington Beach Desalination Plant (personal communication on 3/18/2013). As another example, Poseidon signed a contract with MET in 2009 that included a section stating that the contract would be terminated if MET is required…to reduce defer, or exchange entitlement to or reduce usage of Colorado River water, State Water Project water, or other supplies…as a result of expected or actual Production of the Desalinated Seawater by the Project(Section 13, pg. 21 of the Draft CSDP Agreement 70025). It is quite clear that any water Poseidon produces will not replace imported water, and Poseidon knows that.

Statement: “If the cost of imported water continues to escalate as it has over the past twenty years, then over the life of the desalination project, Orange County water ratepayers will see a net savings, not a net increase in their water bill.”

Poseidon, god of the sea.

Poseidon, god of the sea.

Fact: Such claims have been made for at least 12 years and have not come to pass and probably never will. In presentations by Poseidon in 2003, they estimated that the cost of imported water would equal or exceed that of desalinated water in the 2013-14 timeframe. Here it is 2013 and that has not come to pass. On the contrary the proposed price per acre foot for desalinated water for the Huntington Beach project is about $1,700 compared to $400 for our abundant Orange County groundwater, $700 for imported water and $800 for local recycled water. So even over time desalinated water has remained far more expensive than all other supplies and is likely to remain so. Poseidon’s present prediction for the imported = desalinated water cost equation is for 2024-25 timeframe. It is interesting that this water cost equation is always predicted 10 to 12 years out. You be the judge of who’s being factual.

Statement: “Enforceable agreements between Poseidon and the City of Huntington Beach guarantees that Huntington Beach residents will pay less for water then they would without the desalination project.”

Fact: Huntington Beach signed an “Owner’s Participation Agreement” (“OPA”) with Poseidon Resources that includes the discounted purchase of some desalinated water. However, the discount will only apply to the first 3 Million-gallons-per-day (Mg/d) of 10 Mg/d total and to an emergency supply for 10 Mg/d for 7 days. (NOTE: What constitutes an “emergency” remains unstipulated.). So Huntington Beach will pay full price for 70% of the water received from the project

Statement: “A recent negative campaign mailer circulated by opponents erroneously claims the project will add $5 billion dollars to local water bills over the next 30 years.”

Fact: Unlike Poseidon’s often fuzzy math , the No Water Deal With Poseidon mailer states the precise arithmetic it used to come up with the “$5 billion” figure. All the numbers were derived from Poseidon’s own term sheet for the purchase of water produced by its HB project plant. You be the judge of who’s being factual.

By the way, the No Water Deal With Poseidon mailer is not “anti-desalination”. It does, however, provide the facts regarding irresponsible desalination projects like Poseidon Resources has proposed for Huntington Beach.

No Water Deal With Poseidon

www.nowaterdeal.com

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Rebuttal to Poseidon Critics from Poseidon Resources, Inc: Huntington Beach Desalination Project

Rebuttal to Poseidon Critics from Poseidon Resources, Inc: Huntington Beach Desalination Project

Editor’s Note: Opponents of an ocean desalination plant (Nowaterdeal) proposed for Huntington Beach, California, recently launched a major campaign to block the project (here). Poseidon Resources created a response to some of those claims and is circulating it publicly. The Voice republishes it below. NoWaterDeal’s counter rebuttal can be read here. On Monday, May 6, the Huntington Beach City Council will consider a proposal (here) by Mayor Connie Boardman to recommended to the California Coastal Coastal Commission to deny the Coastal Development Permit for the project when it considers the project this summer.

Huntington Beach Desalination Project

Fact vs. Fiction

Opponents of seawater desalination are distributing a campaign mailer with misleading and factually incorrect claims about the Huntington Beach Desalination Project and the cost of desalinated water. This fact sheet corrects these erroneous claims.

Claim: “$5 billion dollars will be added to local water bills … These bills could total $8,500 for the average retail water customers over the next 30 years.”

Fact: This claim is factually incorrect. The cost of water from the desalination project is not additive, as the claim assumes. Drinking water produced by the desalination project will replace an equivalent amount of imported water into Orange County and thus eliminate the related imported water costs to the consumer. The claim above fails to take this fact into account. If the avoided imported water costs were taken into account, the $5 billion claim would be reduced by billions, potentially even more than $5 billion, in which case buying the desalinated water would result in savings to the ratepayers of Orange County. If the historical rate of imported water escalation is assumed for the next 30 years, purchasing the desalinated water would indeed result in significant savings1. Additionally, the $5 billion cost claim factors in an arbitrary escalation of desalination water at 3.5% annually and fails to account for available local water supply development financial incentives that will reduce the cost of desalinated water by up to $250 per acre foot or $14 million a year2.

1 6.4% = MWD’s Full Service, Treated Tier 1 Rate’s historical average annual rate of increase during 37 year period from 1978

– 2014.

2 $14 million = $250 per acre foot financial incentive x 56,000 acre feet per year produced by the desalination plant.

3 City of Huntington Beach Entitlement and Plan Amendment 10-001, approved September 2010

4 20 year period from 1993-2012 for CPI-U series identification numbers CUURA421SA0 & CUUSA421SA0 (All Items, Los Angeles-Riverside-Orange County, CA)

5 Average Retail Electric Utility Prices, Industrial, as published by the CA Energy Commission

This claim is also factually incorrect as it pertains to ratepayers living in the City of Huntington Beach. As a condition to the permits3 issued by the City of Huntington Beach to Poseidon’s desalination project, the City, at its option, can receive up to 3,360 acre feet per year of desalinated water at the lower of a 5% discounted price off the rate the City pays the Municipal Water District of Orange County for imported water and the cost of the desalinated water. This means that when the desalination project comes online Huntington Beach residents will be paying less for imported water than they would without the project. This requirement will save the City’s ratepayers tens of millions of dollars over the 30 year term of the project.

Ultimately, the cost impact of integrating desalinated water will differ from city to city based on each city’s water supply mix and rate structure as well as the future escalation of imported water rates. However, the Huntington Beach Desalination Project will provide Orange County with a substantial supply of locally-controlled, drought-proof water. These are attractive characteristics that imported water simply cannot offer, given the current and future water demands, environmental concerns, pumping restrictions and threats on the State Water Project and Colorado River Basin.

Claim: The mailer applies an arbitrary inflation figure of 3.5% per year to the cost of desalinated water.

Fact: Poseidon expects the cost of desalinated water to escalate at 2.5% per year. Approximately half of the cost of desalinated water will cover capital costs and escalate at a fixed 2.5% per year. The remaining balance of the cost covers the operating and electricity costs of the Project. The portion of the desalinated water price that covers operating costs will escalate with the Consumer Price Index (CPI-U) for Orange County, which has averaged 2.4% per year over the last 20 years4. The portion that covers electricity costs will escalate with the applicable SoCal Edison industrial tariff rate, which has averaged 2.2% for the 20 year span from 1991-20105.

Claim: “No public subsidies for private profit”

Fact: Poseidon did not request and is not receiving “public subsidies” as part of the successful financing of its Carlsbad Desalination Project, and the company is not seeking public subsidies for its Huntington Beach Desalination Project. Public water agencies in Orange County that buy desalinated water are eligible for an up-to-$250 per acre foot financial incentive from MWD under its Seawater Desalination Program (SDP). This same financial incentive under MWD’s Local Resource Program (LRP) has been used to financially support the OCWD’s Groundwater Replenishment System (GWR). The LRP is designed to foster the development of local water supplies that initially cost more than imported water supplies, and as such they reduce, not increase, water costs for Orange County consumers. Poseidon is neither a public agency nor an MWD member and is not eligible for the funds. MWD funding is subject to strict accounting and auditing measures, and the incentive funds are only available to the purchasers of water to offset predetermined costs.

Claim: “It’s just too risky … In Australia four of six desalination plants built since 2006 sit idle in stand-by mode.”

Scott Malonie

Scott Malonie, Poseidon Resources Inc., Vice President: Photo SCV

Fact: This reference to Australian and its desalination plants is misleading and not analogous to the Huntington Beach project. The regions in Australia where these plants are built experience up to four times the annual precipitation as Southern California and therefore do not need to import water like Orange County. As such, not all the Australian plants were built to operate on a base load capacity. Desalinated water is intended to meet a small portion of Orange County’s supply needs as part of its overall strategy to improve reliability through diversification of water sources. The Huntington Beach project’s maximum 56,000 acre feet per year capacity will be approximately 8% of Orange County’s total demand, so it’s only one component of supply designed to offset the need to import an equivalent amount of water that is subject to regulatory and environmental restrictions, making it less reliable. The Huntington Beach plant and its water reliability agreements will be structured such that the public agency customers will always need and use what the facility produces.

Furthermore, Poseidon alone bears the risk of permitting, development, financing, constructing and operating the Huntington Beach Desalination Project. The innovative public-private partnership structure that Poseidon proposes shields Orange County ratepayers from the risk of a failed financing, over-budget construction, or failure to produce water at the amounts specified in the agreements during operations. In fact, the public agencies purchasing the water would not pay for any water until the Project has been constructed and water has been received by the agencies meeting contractual specifications for quantity, quality, reliability and price.

Claim: Poseidon’s beach-front water factory will suck sea life into their intake pipes with the water, kill and puree millions of organisms, then pump out a briny stew and create a dead zone off Huntington Beach.”

Fact: The Huntington Beach Desalination Project will be located east of Pacific Coast Highway, over a quarter mile from the Pacific Ocean on industrial land behind the AES power plant. The desalination project has a certified Subsequent Environmental Impact Report and approved Coastal Development Permit from the City of Huntington Beach, an approved lease with the California State Lands Commission for use of the seawater intake and discharge facilities and a discharge permit from the Santa Ana Regional Water Quality Control Board. In issuing these permits and approvals each local and state regulatory agency determined that the project can be built and operated with no significant impacts to marine life or water quality.

In issuing its approval the Santa Ana Regional Board found that for the desalination project will impinge approximately 0.78 lbs per day of fish, a fraction (less than 25%) of the daily diet of one brown pelican”6 and the discharge from the desalination plant will meet all federal and state receiving water quality standards.

6 Santa Ana Regional Water Quality Control Board Order No. RB-2012-0007, NPDES No. CA8000403; page F-33

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