Monterey County Board wants desalination plant's financial records
Leslie Griffy
The Californian
04/26/2011
For the second time in a little more than a month, the Monterey County Board of Supervisors admonished its water agency for failing to present a financial plan for a controversial $300 million desalination project.
A report examining the project's financing options — including the cost of borrowing money and an outlaying of where money has already been spent — was promised at a March meeting.
"We have a responsibility to make sure that the costs incurred on the regional water project are reasonable and prudent," said Supervisor Jane Parker. "It's hard for us to know if they are reasonable and prudent if we don't know what the costs are."
The plan the Monterey County Water Resources Agency brought to the board was not enough for Parker and Supervisor Lou Calcagno.
Agency General Manager Curtis Weeks told the board that receipts for expenses already incurred were delivered to their offices the night before Tuesday's meeting and added that his office has put other pieces of the project on hold until the financial report is ready.
"We need to develop a finance plan and bring it to you," Weeks said, promising it would be ready by the end of May.
Under the existing plan, about two-thirds of the funding would come from bonds and other public sources. The rest would be financed by California American Water Co., which would operate the plant.
The remaining question, Weeks said, is how much financing will increase the cost of the project.
In March, Supervisors trimmed a requested line of credit for the project from $8 million to $286,000, saying they wanted to see a plan to fund construction.
Opponents said the water agency's report was not enough.
"I don't believe this status report comes close to giving you and the public an update on the status of this project," Prunedale resident Ed Mitchell told the board.
Resident Julie Engle went after the agency for failing to provide a detailed list of already incurred expenses, saying that what she saw — including taxpayer funded business lunches, $280 an-hour employees and high legal costs — alarmed her.
Weeks was quick to explain the project's early high legal costs came as lawyers worked to get approval from a state agency. Since that approval, a number of suits have been filed against the project.
The high personnel costs, Weeks said, likely combined salary, benefits and overhead.
But, Calcagno warned, not providing that information up front could cause the already controversial project problems.
"It's difficult for someone in a political position to defend themselves if the transparency isn't there," he said. "We can't play hide it under the rug and we'll let you know about it when we come out the other end. If we are going to sell this project, from the board's point of view, we've got to have transparency."
The desalination plant is a project between California American Water, the county water agency and the Marina Coast Water District.
Its goal is stop drawing water from the Carmel River for Peninsula communities, as required by a state injunction designed to protect the endangered steelhead trout.
Opponents say that plan is too big, too expensive and isn't guaranteed to work.
