Monterey Peninsula water district approves final EIR for potential system buyout

MONTEREY, Calif. (KION) The Monterey Peninsula is one step closer to seeing a potential buyout of California American Water's local systems.

On Thursday, the water management district board voted to certify an important environmental impact report needed to move forward with the process. It is the latest step in a year's long battle between activists and the water company.

It all started with the passage of Measure J by voters in November 2018, which required the district to conduct a feasibility study on a public buyout of Cal Am's water systems. Residents were paying some of the highest water rates in the country.

That study came out one year later and showed a public takeover "appears to be economically feasible" with the system's estimated total value around $513 million, which Cal Am says is grossly low.

The water district wasn't just considering the final EIR, but also a proposed operations plan for how the district would take over and run peninsula water.

Instead of adopting the proposed operations plans, the board decided to "receive" them instead after concerns over some of the issues brought up in a letter by Cal Am.

"I would suspect that Cal Am is not going to be a willing seller. So we have to go ahead and position ourselves to be able to justify whether we're financially capable and operationally capable of going over and taking over the system. And also certifying the EIR since it is a very significant project," said Dave Potter, the mayor of Carmel and a board member with the Monterey Peninsula Water Management District.

Approving the EIR, was not unanimous however.

Concerns over separate proposed operations plans became an issue, which Cal Am argues in a letter sent to the board directly conflicts with the EIR's repeated claim that there will not be any changes to the way things operate in the water system.

One of the several things Cal Am brings up: the new operations plan apparently specifies a new level of hydraulic performance, which the company claims would require infrastructure improvements throughout the system.

One board director shared his concerns during the meeting on Thursday.

"Clearly, there are issues with the statements made in the operations plan that are inconsistent with the intent of the EIR. So in the absence of cleaning up the EIR to make it a consistent document, for me, that's what needs to be done here," said Gary D. Hoffmann, the MPWMD Division 5 Board Director.

The board, however, also took the step of simply "receiving" the operations plans instead of voting to adopt them as scheduled, sidestepping what Cal Am argues would have been a violation of the California Environmental Quality Act if both the EIR and the operations plans were adopted as they were.

But any and all irregularities will certainly be challenged by Cal Am, in court if it comes to that.

"If we're going to court, we're going to court. But I would rather and go ahead and move forward tonight than sit around and debate the past and intent," said Potter.

The district general manager claims Cal Am has not allowed them to view the company's assets to make more informed operations plans. KION has not been able to reach Cal Am for direct comment.

If things move along as planned, and the district's application gets approved by the county, the water district would make an offer to Cal Am months from now. If Cal Am reject the offer, the board could proceed under eminent domain to negotiate a buyout of the water system.

Cal Am is likely to go to court before selling anything.

PREVIOUS ARTICLE: The Monterey Peninsula Water Management District voted to approve the certification of the final Environmental Impact Report for the potential acquisition of the Monterey Water System currently owned and operated by California American Water.

The board of directors is currently discussing whether to receive, not adopt, proposed operations plan for the acquisition of MWS.

KION's Josh Kristianto will have more on what Cal Am has to say about this process tonight at 10 and 11 p.m.