June 16, 2011

AN OPEN LETTER TO PAUL MILLER, PUBLISHER, CARMEL PINE CONE

Dear Paul,

The Kelly Nix article and your editorial referring to Bob Brower and the Monterey Peninsula Water Management District, as well as the letter by Brower, in the 10 June 2011 Pine Cone are so rife with disputable content that I cannot tailor my reaction to them to fit into your letter box. So this will be an open letter to you and to other involved and interested parties.

The article first. This article was a vehicle provided by the Pine Cone for Brower to defend himself against a suggestion by me in a 5 June Herald letter that Brower's simultaneous ties to the water management district and the county hospitality association represented a conflict of interest.  In his attempted defense, Brower incorrectly interpreted my use of the word "promote" to mean "approve" when I identified a possible reason motivating Brower to refuse to schedule a public workshop on the Water Plus proposal that the District purchase Cal Am:  "Curry favor with Cal Am so that it will promote special rate treatment favoring the hospitality industry?"

Brower and the Pine Cone should know that Cal Am must request and defend rate changes before the CPUC will consider them. They should also know that Cal Am belatedly added the request for the rate change in question to the utility's pending request to the CPUC for a substantial overall rate increase. Brower, as a member of the executive committee of the Monterey County Hospitality Association, certainly has the motivation to see that its special-interest addendum wins approval from the CPUC, and Cal Am certainly has shown that it will do everything that it can to thwart any movement toward its purchase by a public agency. That includes putting pressure on Brower, directly or otherwise, to do whatever he can to keep Cal Am happy. Yes, a conflict of interest exists here and no, it was not "a foolish statement to make," as Brower is reported to have claimed.

In the article, Brower contended that his allegiance is to the 10,000 constituents in his division, not at all to the hospitality association. That is hard to believe. The hospitality association was one of his major supporters in his 2007 election to the District board. The association is currently seeking special rate treatment that, as a member of the association's executive committee, Brower must support. That special treatment will be at the expense of other ratepayers, many of whom are among Brower's 10,000 constituents--of whom, incidentally, only 2,431 voted for him, a 3% margin over his opponent.

The article also said that Brower has refused to schedule the public workshop because he has not received a Cal Am appraisal from me. At the same time, without any appraisal of his own, he is reported in the article as saying that Cal Am is worth $400 million. That is preposterous, and if Brower or the Pine Cone had read the Water Plus proposal to the District they would know that. Our local Cal Am has less than 40,000 connections. So how can it be worth $400 million when its parent company, American Water, recently sold its combined Arizona and New Mexico operations with 174,000 connections for $470 million, as reported in the proposal? Where does Brower get his $400 million figure? Pulling a number out of thin air like that provides no support for an argument and just demonstrates the dire need for the workshop.

Water Plus proposed to Brower, as chairman of the District's board, that he schedule the workshop months ago (23 March). In response to that request, he demanded information about Water Plus. We provided it, but he refused to schedule the workshop. Instead, he requested additional information, which Water Plus provided, again to no avail. Then he requested to see the proposal that we had prepared to present at the workshop. We provided that, once again to no avail. Then he sent us 13 questions, which we answered within hours, again to no avail. Finally, he requested our appraisal. This is all on record in an e-mail stream. By this time, we had gotten the drift. No matter what information we provided him, he was determined not to schedule the workshop.

The appraisal, completed in 2005, is valuable and proprietary information. To get a similar appraisal today would cost in the neighborhood of $30,000. Scheduling the workshop is a small and more than fair step for the District to take in return for our sharing the appraisal. Using the income and comparison methods, the appraisal reaches the conclusion that Cal Am's worth in 2005 was about $100 million. Our own application of the replacement-value method based on 2009 data provided by the CPUC confirms that estimate. This information is all presented in the Water Plus proposal to the District. Also in that proposal is the name of the firm that did the appraisal. Brower, the District, or the Pine Cone can contact this firm or seek information about its expertise and reliability prior to seeing the appraisal if they have any doubt about its existence or value.

Kelly Nix appears to have a habit of reporting only partial information amounting to half-truths which, truth being an absolute quality, are not really truthful at all. Reporting on his first interview with me a number of months ago (Pine Cone, 4 February), Nix omitted two critical items of information that I had given him: that Water Plus had an appraisal confirming its own estimate of Cal Am's worth ($102.5 million) and that our proposal included an offer to the District that Water Plus would help pay for an independent consultant, selected by the LAFCo executive officer, to critique the proposal.   This information, along with the entire proposal, can be found on the Water Plus Web site: www.waterplusmonterey.com

Now, the letter, briefly.  In the letter, Btower concentrated on the water-supply problem with no new ideas and no prospect of adequately meeting the challenge of 95-10, the state order to cut back severely on the use of water drawn from the Carmel River basin. He ignored the Regional Desalination Project designed intentionally to be centered outside the District's service area because of the District's historical inability to resolve the supply problem, and he failed completely to address the cost problem, which looms now as the virtual water buffalo in the room. The letter appears to be simply a preview, courtesy of the Pine Cone, of Brower's platform for the November election. 

Finally, the editorial. Paul, I respect your obvious talent and experience in the media world and especially the extremely hard work that you put into the Pine Cone, clearly a labor of love. Your editorials are always interesting, but in this 10 June editorial you make some serious accusations with insufficient foundation in fact. You harshly criticize some of the other local print media as being forces irresponsibly pitted against a new water supply, but you provide no information to support your criticism.

On the other hand, your criticism of the mayors and the cities does not go far enough. You say that they cannot directly affect the local water-supply problem, but they can; they can form public municipal water districts or a single public joint-powers agency to replace Cal Am. Public districts have many more options to address water-supply problems than private ones do.

You likewise trash the water management district with the notable exception of Brower and a few other board members who appear only to share your support of Cal Am but who have done nothing to promote desalination on a scale large enough to address the entirety of the Peninsula's water-supply problem, to say nothing of their abject failure to address the cost problem that threatens the local economy even more seriously than would an additional multi-dollar increase in the price of gasoline. The board members whom you fail to exclude from your opprobrium are in fact the very ones who, in their support of public ownership of our water-distribution system, favor steps to provide the Monterey Peninsula with an adequate supply of water. 

Paul, I know that you are busier than perhaps even you would like to be and that you have many other fish to fry outside the local water caldron, but, if only for that reason, please show respect for the work that private citizens (note the word "private") undertake when they delve deeply into projects while the media, yours included, have insufficient time or resources to do so.

Sincerely,

Ron Weitzman
President, Water Plus

P. S. A number of people who are extremely concerned about the current precarious state of the Regional Desalination Project have been saying publicly that Water Plus is one of the forces acting against it. That can hardly be further from the truth. Anybody who reads The Herald will know that I personally am one of the strongest champions of the project.  At a meeting of the Board of Supervisors months ago (11 January), I warned of the project's current problems and suggested a way to avert them:  Instead of the Marina wells, obtain the salt water to be treated in Marina from the deep sea canyon off Moss Landing.  Although Water Plus has taken no position on the issue, all of our members support any adequate and cost-effective solution to our water-supply problem, including desalination. With respect to the Regional Desalination Project, public ownership would mean only that a public agency would take the place of Cal Am at the desalination table. The Water Plus movement in that direction is not fast enough to have any effect, positive or negative, on the implementation of the project.

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