Tag Archive | "MWD"

Commentary: Public Officials Have an Obligation to Leave No Doubt


By Merle Moshiri
Special to the Surf City Voice

Last week I sent a complaint to the California Fair Political Practices Commission asking it to investigate what I believe are serious violations of the California Fair Political Practices Act, including failure to report income and conflict of interest voting, by John V. Foley, Chairman of the Metropolitan Water District of Southern California (MWD).

Foley is not an elected representative of the people. He was appointed to the MWD by our own Municipal Water District of Orange County (MWDOC). He was then elected by MWD members to be chairperson of that body.

The details of Foley’s apparent misconduct have been provided in reports by the Surf City Voice and the Voice of OC. According to those reports, Foley failed to disclose over $600,000 in past income, most of it to his wife, from government and private sources. Also, according to those reports, he arguably cast illegal votes (as an MWD director) on matters related to that income.

Those details have been ignored by the OC Register and the Los Angeles Times even though they have been contacted repeatedly by myself and other concerned citizens. That is why I feel compelled to take action as a public citizen: our public officials and our largest self-proclaimed watchdog institutions have failed us, so concerned citizens must act to take back control of their government.

I filed my complaint last week, but doing so was partly the result of a frustrating process that started 10 years ago.

At that time, many of us in living in southeast Huntington Beach became concerned with plans to build a private ocean desalination plant in our area.  Initially, it appeared to be yet another piece of ugly industry being added to our community that already played host to the AES power generator, with its huge smoke stacks, the OC Sanitation District’s sewage treatment plant, the City Trucking depot, and the ASCON toxic waste dump—38 acres of hazardous waste material dumped close to our homes and schools—that still needs remediation.

Did yet another industry need to be built on our share of the coast?

Upon closer scrutiny, we discovered that the company planning and pitching the desalination plant, Poseidon Resources, Inc., had never built a fully functioning ocean desalination plant before.

But Poseidon pitched its project as a purely private one. The public would pay nothing; it would reap the benefits, but without taking the risks.  Four miles of our streets would be trenched for pipelines, but apparently we were supposed to accept that as one of the hazards of living that came with having a home in our area.

As our research progressed, we learned that there wasn’t any real need in Huntington Beach for desalinated water. We also learned that the “no cost to the public” promise was a pipe dream because ocean desalination was the most expensive alternative source of water. By contrast, water recycling (the Ground Water Replenishment System in Fountain Valley), conservation and retention were all much less expensive water sources.

The more we learned about the Poseidon project, the more skeptical we became.

Why would our public officials be so quick to jump on such a super expensive, energy exhausting, environmentally damaging and out-dated form of technology when there were other readily available and more viable means of meeting our water needs?

When we delved into Poseidon’s dealings with our local city and water officials we were struck by the lack of accountability and transparency that we found while those officials were proposing to spend hundreds of millions of rate payer dollars with apparently little regard for how they would be spent.

Positions on water boards may be seen by some as plumb pickings with nice stipends, health insurance, expense accounts and other benefits along the way. But with election or appointment to these offices comes the responsibility to be ethical and follow the law.

I regularly attend many MWDOC meetings.  About a year ago it was announced that John Foley was going to share some office space at the agency’s headquarters in Fountain Valley.  I knew that he was the chairman of the Metropolitan Water District.  I noticed in a MWDOC expense report that Foley’s wife had been paid by MWDOC for consulting services. I asked about the legality of her contract and what the protocol was for selecting her out of all the other possible consultants.  The answers were not readily available.

Now it appears that Mr. Foley violated the law by not reporting his wife’s income (and some of his own) on his 700 forms and that he created an illegal conflicts of interest by voting on desalination issues that his wife was paid to work on and for contracts for companies that she worked for.

When asked by a local reporter about not reporting his wife’s consulting income, Foley said he didn’t know he was supposed to do that.  But Foley, who has been on the MWD since 1989 and undergoes ethics training by MWD every two years, should have known what his reporting obligations were.

So I ask, is his failure to comply with the law from ignorance or arrogance?  Either one does not go far in protecting the public.

Public trust goes hand in hand with transparency and truth.  Those endowed with the public trust have an obligation to give their constituents no cause for doubt.

 

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Posted in Headlines, MWD, MWDOC, Poseidon, Water BoardingComments (0)

Complaint Filed Over Water Board Chairman’s Alleged Conflicts and Failure to Report Income


By John Earl
Surf City Voice

A Huntington Beach activist has filed a complaint with the Fair Political Practices Commission against the chairman of the Metropolitan Water District of Southern California (MWD), John V. Foley, for alleged violations of the Political Reform Act.

Since 1989 the Municipal Water District of Orange County (MWDOC) has paid Foley as one of two appointed (non-elected) public officials who represent it on the MWD board. In turn, in Jan. 2011 MWD elected him as its chairperson for the second time.

As chairman, Foley runs MWD board meetings and appoints all members of all committees. He also attends some MWDOC meetings for discussion but not for voting.

The complaint, submitted by Merle Moshiri, president of Residents for Responsible Desal, alleges a spate of violations by Foley, including multiple failures to report income—totaling at least $640,000—that he received through his wife’s consulting business and another $15,000 earned from his own consulting business.

His wife, Mary Jane Foley, consults for government water agencies and companies to help them navigate through environmental regulations and obtain permits for water management projects, like ocean desalination.

Under California law, spousal income is considered a 50/50 split unless property is legally separated by a prenuptial agreement.

The complaint also alleges Foley cast four votes since 2005 that were illegal because they indirectly related to his wife’s consulting contracts with MWD, MWDOC and other water agencies.

State law requires public officials to disclose all reportable income on financial disclosure (700) forms that are open for public viewing. Those officials must recuse themselves from votes that could result in financial benefit for them or their spouses.

Fines of up to a $5,000 can be levied for each violation.

In an op-ed column published by the Surf City Voice, Moshiri says that her complaint follows a “frustrating process that started 10 years ago” with a city proposal to allow a large ocean desalination plant to be built in southeast Huntington Beach. That process has been marked by a “lack of accountability and transparency,” she wrote.

Merle Moshiri

Merle Moshiri: Photo by John Earl

But Moshiri’s complaint also follows recent disclosures in the Surf City Voice and the Voice of OC (not a related publication) about Foley’s apparent failures to comply with various state conflict of interest laws.

The Surf City Voice first reported that Foley failed to report well over $200,000 of income from his wife’s consulting work (for public agencies only) and subsequently reported that Foley also failed to report $15,000 from his own consulting work.

Last September, Foley told the Surf City Voice that he didn’t know he had to report his wife’s income, stating that that “I never felt it was required. You know, I don’t have no problem with it.”

A month later, however, Foley updated his 700 forms back to 2004 by including his wife’s income. But he did not include his own consulting income in the updates.

On two subsequent occasions in January the Surf City Voice asked Foley by email what specifically had led him to believe that he didn’t have to report his wife’s income. Foley did not respond. During a phone interview on Feb. 7 he said that he still didn’t think he had to report his wife’s income because he had no access to it. He had updated his disclosure forms only for appearance’s sake, he said.

If Foley and his wife had signed a valid prenuptial agreement stipulating the separation of their property, there would have been no conflict of interest or requirement to report the income. He had never mentioned such an agreement before, and when asked the next day if such an agreement existed, he said no.

Then on Feb. 27 the Voice of OC reported that from 2007 to 2010 Foley had voted to approve three contracts—over $9 million worth—with engineering firms that had paid his wife over $20,000 for consulting.

The Voice of OC report also estimated that – including income from his wife’s consulting work for private firms – Foley had failed to report at least $640,000 of income prior to revising his 700 forms.

In that report, Foley reversed course and asserted that he and his wife did have a prenuptial agreement to keep their income separate.

But the Voice of OC noted that Foley had revised his 700 forms as if he had a share his wife’s income, indicated by filling in the part of the form that asks to “Identify … your pro rata share of the gross income to the entity (trust).”

In the same Voice of OC report Foley claimed that his prenuptial agreement also freed him to vote on the contracts.

The next day Foley made a public statement while chairing the MWD’s Executive Committee in Los Angeles, far from the view of the MWDOC ratepayers he represents. He and his wife have an agreement, he said again, which led them to believe that her income wasn’t reportable.

“It was further our understanding,” he added, “that Mary Jane would never work for any agency that had any connection with Metropolitan (MWD). I now realize that it would have been better for me to have abstained from votes pertaining to contracts between Metropolitan and firms that Mary Jane may have consulted with and I plan to do so in the future.”

Foley did not make a statement to the MWDOC board despite an invitation by Chairman Jeffrey Thomas to do so.

And, so far, Foley hasn’t responded to requests by the Voice of OC and the Surf City Voice to see the prenuptial agreement; but, if the FPPC investigates, he will be asked to show proof of it.

But even though a public official’s suspected actions turn out to be legal they aren’t necessarily ethical—a consideration that is big in the MWD’s ethics manual, which Foley and all the other MWD directors presumably have read.

MWDOC doesn’t have an ethics manual, but Chairman Thomas has invited the FPPC and legal experts to put on a workshop titled Ethics & Conflict of Interest Disclosure today (Monday, March 19) from 1:30 – 4:00 p.m. Invited public officials, not just from MWDOC, will learn how to fill out 700 forms.

Thomas explained his reasons for the workshop at a joint meeting of MWD and MWDOC directors that included Foley.

“Given a lot of us having questions on ethics and filing 700 forms and all the nonsense that goes into having to try to remember what you did and what you should report, what is reportable and non reportable, I thought what we would do is have a little mini seminar here.”

Thomas, who has since revoked his “nonsense” remark, invited members of the public to attend as well. The workshop will be held in MWDOC’s meeting room from 1:30 p.m. to 4:00 p.m.

At another meeting held last week, MWDOC Director Brett Barbre proposed that 700 forms for all MWDOC’s directors, its appointed MWD directors, and its employees, be vetted by the board to weed out any potential conflicts of interest. “I just think it’s smart for us to be proactive and as transparent as possible,” he said.

The idea will be discussed at April’s general board meeting and voted on at a subsequent meeting, the committee agreed.

Public citizens like Moshiri wish that MWDOC and the MWD would have been more proactive long ago, but they will probably appreciate even small steps in the right direction.

As Moshiri notes in her commentary, “Those endowed with the public trust have an obligation to give their constituents no cause for doubt.”

 

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Posted in Headlines, MWD, MWDOC, Water, Water BoardingComments (2)

Water Boarding: MET Chairman John V. Foley’s $15,000 ‘Oversight’ Disclosed


John Earl
Surf City Voice

Lately, southern California’s top water official, John V. Foley, has been explaining his apparent violations of a state law that requires public officials to disclose their economic interests.

Foley is chairman of the Metropolitan Water District of Southern California (MWD).

The Surf City Voice recently reported that Foley, who was appointed to the MWD by the Municipal Water District of Orange County (MWDOC), failed to report an estimated $248,000 of income that his wife, Mary Jane Foley, earned as a consultant for various water agencies in Los Angeles, Orange and San Diego counties, going back to 2004. That disclosure came from public records obtained by the Voice.

Now, more public records obtained since then reveal that Foley also failed to report over $15,000 of his own income as a private consultant for the Moulton Niguel Water District (Moulton) in south Orange County going back to late 2008.

His failure to report that income was “an oversight,” Foley told the Voice.

The newly obtained documents include the invoices that Foley filed at Moulton when he worked as a private consultant for that agency under a contract (also obtained by the Voice) that is still open.  But he did not report that income on the original financial disclosure (700) forms he filed with the MWD nor in amended versions that followed, records show. Read the full story

Posted in Headlines, MWD, MWDOC, Poseidon, Water, Water BoardingComments (1)

Water Chairman Still Believes He Didn’t Have to Report Wife’s Income


By John Earl
Surf City Voice

The chairman of the Metropolitan Water District of Southern California (MWD), John V. Foley, says that a recent Surf City Voice story, that exposed the omission of his wife’s income from years of financial disclosure statements he filed with the water agency, did him an “injustice by just making your own interpretation, which, quite frankly, is totally different than what mine is.”

The story pointed out that Foley had not reported an estimated $248,000 of income that his wife, Mary Jane Foley, was paid by various southern California water agencies for consulting work going back to 2004.

State law requires government officials to publicly disclose their relevant economic interests, including spousal income, within 30 days of assuming office and annually thereafter.  Fines of up to $5,000 can be levied by the Fair Political Practices Commission for violations.

Foley has served on the MWD as the appointed representative of the Municipal Water District of Orange County since 1989. He was chosen by the MWD to be its chairman for a second time in 2011.

In September Foley told the Voice that he was unaware that he had to report his wife’s income. But in October, after advice from MWD legal counsel, he amended is Statements of Economic Interest, which are filed on “700” forms, to include that income.

“The advice was: rather than get in a big battle over this why don’t you go ahead and report it,” Foley said in a phone interview Tuesday. “I decided for the sake of solving this, and not having it look like it has been hidden—put it in there.”

Mary Jane Foley and husband John V. Foley, MWD Chairman

Foley says that all of his wife’s consulting income goes into a separate trust fund for her children, that he has no access to it and that there is no “co-mingling” of her income with his. He and his wife have separate bank accounts, he adds, and file separate tax returns – all of which he believes exempt him from the state reporting law.

“To be extra safe, I went ahead and reported,” despite his exemption, he said. “I really to this moment think that I don’t have to report it,” he insisted.

But Foley’s interpretation of the law, however sincere, is conclusively incorrect.

Public officials must report spousal income unless they have a pre or post nuptial agreement, according to Tara Stock, a spokesperson for the Fair Political Practices Commission.

Stock would not comment on Foley’s case, but told the Voice by e-mail that “The general rule is that in order for a spouse’s income to possibly be exempt from reporting, there must be a valid prenuptial or postnuptial agreement and a separate property agreement.”

When asked if he had a prenuptial or postnuptial agreement with his wife Foley responded, “Separate tax returns, separate accounts. Yes.” But when asked again, specifically, if he had any nuptial agreements with his wife, Foley said he did not.

Even if Foley had signed a nuptial agreement with his wife, however, he would not have been required to file it with the FPPC or MWD. In fact, according to Stock, the Commission would only seek verification of such an agreement if an official complaint had been filed with her agency.

Foley said that his wife is winding down her consulting work. “In the last two years she’s done very little work and probably will close her business because she does not really want to spend that much time on that stuff anymore. She kind of hates the regulatory field.”

 

Posted in Environment, Headlines, MWD, MWDOC, Water, Water BoardingComments (2)

Desalination: Focus on affordable solutions


By Debbie Cook
Special to the Surf City Voice

Debbie Cook is the former mayor of Huntington Beach. As a member of the Huntington Beach City Council, she opposed the Poseidon desalination project proposed for the city. She served on the state’s Desalination Task Force and has written extensively on the relationship between water and energy as well as peak oil. Her articles have appeared in a wide array of publications and she is well known for her expertise on energy related issues. This is the last of three parts.

Worldwide, humans have quickly and wastefully consumed water from the cheapest sources by over-pumping aquifers and over-allocating rivers. We’ve turned to technology to eke out more but technology is not without its costs. Every remaining incremental gallon of water will come at a higher and higher price. Are we nearing a breaking point?

Prior to the 2008 run-up in oil prices, gasoline, like water, was widely believed to be inelastic–that consumption of such an essential commodity would grow despite the price. But as gasoline prices headed toward $4/gallon, discretionary spending shrank and the economy shrank.

The rising costs of essentials like food, shelter, energy, and water have a disproportionate impact on low-income households. Low-income assistance programs for water vary significantly from one jurisdiction or utility to the next. For example, in California, San Jose Water provides a 15 percent discount on the total bill while Valencia Water provides a 50 percent discount off the monthly service charge. Such programs shift the costs onto remaining consumers and businesses many of whom are also facing economic distress. Are these programs sustainable in the face of continuous water rate increases and growing economic challenges?

“A solution isn’t a solution if it isn’t affordable.”

Those were the cautionary words of Cuban energy expert Mario Avila who visited California in September of 2010. Cuba has lived through a number of energy crises. The one with which I was familiar was the oil shock that resulted from the collapse of the Soviet Union. But Mario explained that it was the lesser known electricity crisis following the 2005 hurricane season that exposed the vulnerability of their water system. Two power plants were destroyed by two storms plunging the island into relentless daily blackouts. Without electricity, water didn’t move, it could not be treated, and it could not be discharged. Castro declared an “energy revolution” and within a six-month window, thousands of “social workers” were deployed to inventory and replace every incandescent light bulb on the island and promote zero-interest loans for efficient appliances. Rather than replace the two large power plants, the nation built smaller, distributed power plants improving the resiliency of their system and restoring power and water.

Resilience should be the goal of water planners but most options that improve resilience–water harvesting, conservation, demand management– receive a tepid reception. One major reason is because water providers are paid to sell water, not conserve it. And there isn’t an ongoing assurance for funding conservation or efficiency. When budgets get tight, the conservation budget is the first to be eliminated as was done last year by Metropolitan Water District of Southern California (MWD). Ironically, while eliminating the conservation fund, MWD was approving subsidies for desalination and raising water rates because their conservation message had resulted in lower water consumption. Conservation and low tech options for reducing water demand will never compete against capital projects in the current regulatory framework.

Level the playing field
It isn’t surprising that an industry that can’t even quantify water in a consistent unit of measure (acre-feet, gallons, cubic meters, units, cubic foot), would apply different criteria to different water options. The result is a misleading comparison between options.

Here’s an example. Say a proponent tells you that the new desalination project will produce water at $1000/acre-foot. You’re told that your city is buying water from MWD for $750/acre-foot. The natural reaction will be to compare $750 to $1000. But MWDʼs actual production costs are closer to $200 of that $750 figure. That means $550 is covering their fixed costs. So even if you reduce your imported water by 10 percent, the remaining costs (including your city’s 90 percent remainder) will have to be leveled across all water purchasers. Communities that are not the recipients of the desalinated water will nevertheless be footing the bill through subsidies and cost sharing.

Similarly there has not been a fair method for comparing conservation measures to traditional water sources. For example, the cost effectiveness of rainwater tanks has traditionally been calculated by comparing the cost of installation against the savings on household bills. But this ignores the broader cost savings to the community in deferred water infrastructure, storm water infrastructure and environmental externalities like greenhouse gas emissions. When those are accounted for, rainwater harvesting is superior to desalination.

A model already exists for a regulatory framework that would address such conflicting motivations. In 1982 California became the first state to adopt an electric revenue decoupling mechanism. This gave utilities the incentive to promote conservation and efficiency because their ability to recoup their fixed costs was decoupled from the volume of their sales. In addition to decoupled rates, California has a “loading order” of energy preferences that place priority on the least expensive and most environmentally protective resources. When meeting California’s energy needs, conservation and efficiency are considered before additional generation is added.

A sustainable conservation budget would give priority to cost effective programs like water capture, drip irrigation, water recycling, low-flow devices, and water management programs that reduce demand, costs, and bring true resilience to the water sector.

Left to compete on an uneven field, conservation will remain the bastard step-child to desalination. In 2006, many communities in Australia were offering substantial rebates on water tanks. By 2007, demand was so high that prisoners were put to work building tanks. Buoyed by studies that demonstrated other options would be more cost effective than desalination, twenty-three government leaders pledged $250 million toward their goal of reaching 500,000 households. Then in 2008, with the collapsing economy and in the midst of the desalination boom, the Bligh government dismissed wide scale rollout of water tanks. Some officials sensed a threat of competition to their capital projects, going so far as to suggest the licensing of water tanks so as to enable levying taxes on rainwater collected.

Remove the rose-colored glasses
Technology has its place. But it is not magic and shouldn’t be seen as the solution to all our problems. That which is technologically feasible is not necessarily economically feasible. Desalination cannot be “greened” by utilizing solar or wind energy for its energy requirements. Not only is the scale of such a proposal enormous, it ignores the fact that all renewable energy resources are backstopped by fossil fuels. Moreover, the price of such a proposal would significantly increase the cost of desalination, exacerbating the economic problems of water pricing and availability.

Perhaps the most important lesson I have learned over the past eight years of observing the desalination/water industry is that we create our own problems. And we are stuck in a perpetual feedback loop applying fixes to yesterday’s solutions. That’s the perfect recipe for rear-ending our future. The remedy is to increase our awareness of unintended consequences and the dynamic relationships between water, the environment, and human settlements. It is a systems thinking approach that starts with a willingness to open our minds and apply critical thinking.

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Posted in Energy, Environment, Headlines, PoseidonComments (0)

Poseidon Desal Deal? Govt. May Rescue Junk Bond Project


By John Earl
Surf City Voice

Due to soaring cost estimates and lack of private financing for a proposed 50-million-gallon per day Carlsbad desalination project, a government water agency may negotiate a takeover deal with the project’s developer, Poseidon Resources, Inc.

Poseidon Resources is a budding multi-national water baron that also has an identical desalination plant in the dock for Huntington Beach, next to and functionally linked with the AES power plant, on Pacific Coast Highway and Newland Avenue.

What happens in Carlsbad will indicate what could be in store for the Huntington Beach project and residents of our city as well.

The $650 million Carlsbad project would have supplied 56,000 acre feet of drinking water per year to nine of 24 San Diego County water districts under the umbrella of the San Diego County Water Authority (CWA).

But the cost of water derived from the desalination plant will be much higher than previously stated and it would take $630 million in combined public subsidy funds paid in yearly installments over 25-30 years to make the “private” project financially viable, according to a memo written by Oceanside city manager, Peter A. Weiss.

Oceanside is one of the nine water districts, known collectively as The Desal Partners, which had signed water purchasing agreements with Poseidon.

Due to Poseidon’s financing troubles and needed word changes, however, those agreements had to be revised before the project could proceed. But only one member, the city of Carlsbad, has signed a revised contract so far.

“In the past few months it has become apparent that Poseidon’s cost of water is going to be greater than originally proposed,” the memo states. “To make the project viable, Poseidon needs subsidies from the San Diego County Water Authority and Metropolitan Water District (MWD)”, the memo continues.

The CWD is a member of the MWD, which supplies water to 26 southern California water agencies. Read the full story

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