Eye On Modesto

Thoughts and observations about Modesto and Stanislaus County

Archive for the tag “corrupt business practices”

25 Nov 2012
2 Comments

“What’s on America’s Mind” Wed 11/21 7:00PM

Français : Radio Contact 104.9 FM

Français : Radio Contact 104.9 FM (Photo credit: Wikipedia)

Topics include a feel of an Oakdale Irrigation District meeting and its participants, An update regarding Salida’s potential annexation by Modesto, Memorial Medical Centers attempt to keep the Nurses Union out and how it reduces The quality of healthcare , an election update and more so listen in live or to our archives at the same link.

Wednesday 11/21/12 at 7:00PM

http://www.blogtalkradio.com/centralvalleyhornet/2012/11/22/whats-on-americas-mind-with-emerson-drake

104.9 FM K-GIG Modesto our Flag Ship station

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15 Nov 2012

MID’s Layers of Deception – the Public Information Requests

Modesto Marathon 7983

By Emerson Drake

After Tuesday’s meeting I think some clarity needs to be added to the way MID spends our money.  The most used way is through the Purchase Order system. They put contracts out to bid and choose the lowest responsible bidder, at least in theory.  A lot of attention has been focused on purchase order #54981 which was effective from 7/19/2010 thru 12/31/2012, with a “not to exceed” cost of $450,000.  Yet this purchase order authorizations continued to come through signed by Allen Short and initialed by “J.W.” for payment. A minimum of $90,000 has been paid on this expired  Purchase Order numbe,r all containing the same generic billing reasons. No contracts for subcontractors have been made available and MID’s Joy Warren has yet to explain how this contract was part of the competitive bidding process.  These typically included:

Client Meeting/Planning Fees…..$5,000

Consulting…………………………$7,500

Communication services…………$3,500

Outreach/Transparency………….$5,000

According to MID, Martino Graphics uses four subcontractors to fulfill their contract. This Contract  Purchase Order is issued to provide professional services to Refocus and Enhance Public Education and Information Services per Board Resolution # 2010-35.  The following link is to the Board Resolution #2010-35  Slegal12110816440

The following is a response to several question in regard to Martino Graphics PO#54981.  It includes the pages of invoices, copies of authorizations, and checks (well at least the ones they sent us). It’s a lot of work/pages  so don’t hit print unless you mean it.

Slegal12101913110

 MID has consistently ignored  requests to release the total amount of money spent (including details) using PO#54981.

One of the reasons I question if all of the requested information is being supplied is that they have been charging consumers a falling water charge for over 20 years according to Van Groningen.  So I thought I would cut them a break and only ask for 10 to 15 years worth.  All they were willing to send were 5 years.  Here is the copy of the PIR. son_Drake_dated_October_26__2012_re_Falling_Water_Charge

Last week much of the conversation was about the “Serpa” rule.  Here is the link Slegal12110515150

It was gratifying to see Mike Serpa vindicated by the present MID Board and obviously showed the prejudice he was subject to by Van Groningen, O’Laughlin and Short.  I will take this moment to point out how the Bee’s Opinion Editor Judy Sly never spoke out against the treatment former City Councilman/MID Director Serpa endured. If fact, Ms. Sly helped the three amigo’s cause by heaping abuse on Mike in her Editorial Column as often as she could work it in.

Lets look at Carol Whiteside and her California Strategies  Company for a minute,  She received over $15,000 in payments $6,000 of it almost two months AFTER she terminated the contract.  This money was funneled through Martino Graphics WITHOUT a contract.  At least no contract with Martino Graphics (MG). Ms. Whiteside supposedly has a contract with MG but we aren’t privy to it. There also is no contract with MG since Short, Van Groningen, and Wild took it upon themselves to spend this money BEHIND the rest of the Boards back.

I believe Short, Van Groningen and Wild should be held personally liable for this money and should pay it back to the MID  ratepayers.

In my opinion it’s time not for an audit. but an investigation of how MID’s been spending our money.  It appears services for lobbyists have been procured by upper management  with the help of two Board Directors and I’m not sure they did it legally.

I also don’t believe MID should  financially support Allen Short’s new position with The San Joaquin Tributaries Authority.

You can hear more about MID and the City Council by checking out any of the “What’s on America’s Mind” broadcasts. Just click on the link and it will take you directly to the show archives for a listen.

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04 Nov 2012
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Some Suggestions to the MID the Bee Finally Got Around to Liking

Two hangman's nooses and gallows behind the co...

By Emerson Drake

I’ve been going to MID meetings for more than six years, writing about them for just short of five and been talking on the radio about them for four years in February.  During that time I’ve consistently made some suggestions hoping they would be implemented. But honestly, they haven’t gained any traction until recently.  Others have joined me in making these requests from time to time, and I’m not trying to claim the ideas were all mine.  During Mike Serpa’s time on the MID Board we had someone who cared, but one person on the Board couldn’t  get anything on the agenda (unless your name was Tom Van Groningen or Allen Short) let alone manage to create real change in the way things were done, no matter how hard they tried.

Even with the addition of Directors Larry Byrd and Nick Blom it took ten months to get to the point of generating and possibly passing some out of the box ideas (for MID) that other public entities have been utilizing for years. MID does place their agendas on-line but they remove them before the next meeting, never to be seen again without a Public Information Request and most of those are drawn out to the legally  mandated limit of 10 working days at best even when the information is readily available. They also seldom place supporting material on-line linked to the agendas like other public agencies do.  See the City of Modesto’s website as an example of doing things the correct way.

The Board’s policy is to destroy the electronic records of the meetings 100 days after the meeting. I’ve never understood this policy especially since they wait until AFTER the records are destroyed to approve the minutes. The October 21, 2012 agenda shows them approving the minutes from 6/23/12, a delay of 120 days.

We’ve asked the Board repeatedly to preserve the records and place them on-line along with streaming the video live. They’ve consistently refused to seriously consider any of these suggestions.

As recently as last week I once again repeated the request for separate email addresses for the Board members that the General Manager wouldn’t be privy to. Why should he or his replacement be monitoring a Board member’s communications?

The MID’s Purchase Orders process needs to be better defined. Here is the part of the resolution staff has been willing to share. Director Van Groningen brought the above to me for one of our private meetings and I don’t know if he shared it with the rest of the Board or not.  A complete copy will be handed out  to the Board on Tuesday at the scheduled meeting.   This is what he/staff  provided, a partial of Resolution 2010-35.

3.Contract Purchase Order 54981 issued July 2010 states that it is effective through December 31, 2011.

This PO is for services to “Refocus and Enhance Public Education and Information Services per Board Resolution 2010-35.”  These services included a variety of consulting activities through subcontractors retained by Martino Graphic Design with MID’s approval.

This Project was undertaken at the direction of the Board in accordance with the referenced resolution, stating as follows:

The Board of Directors of the Modesto Irrigation District does hereby authorize and direct the General Manager to continue implementing legislative and regulatory activities to further the goals and interest of the District in State and Federal jurisdictions, including…7.  Implementing a program to improve the image and credibility of the District with is ratepayers.

As an example Staff currently believes after reading the above  Board Resolution 2010-35

  • Based on the foregoing resolution, the General Manager clearly would have had the authority to make expenditures under this PO, and to extend the time and not-to-exceed value of the PO;

In other words they (Short’s staff)  support the idea the GM can not only indefinitely extend a purchase order time limit but that the not-to-exceed value is meaningless and the GM is given Carte Blanche or an open checkbook, if you will.

 I don’t believe that’s what the true meaning of the resolution is and  I haven’t been able to read the entire resolution due to their foot-dragging response to Public Information Requests. But that is the portion the quote as applicable.  These aren’t the General Manager’s private monies, they are ratepayer supplied funds. We deserve a staff who believes in responsible controls, a staff who won’t create verbage to support the GM’s desires and lacking that,  the Board needs to provide unquestionable guidance and  a promise of a dire consequence when its instructions are flaunted. An area in the past where they’ve fallen woefully short.

GM  Short’s staff may be trying to create an “out” but in my opinion it’s  an inappropriate use of money  that cannot be overlooked or swept under the rug.  How many other occurrences of this type of malfeasance in office have taken place?

The phrase “Not to exceed” on purchase orders means what it says. It doesn’t mean spend however much you want.

We want to thank Directors Byrd, Blom, and Warda for pushing these ideas to the forefront.  Now lets bring them home.

In Sunday’s Bee, Judy Sly finally gets around to agreeing with many of the items we’ve been suggesting for years.  Thanks for getting on the “Band Wagon” Modesto Bee, now help us follow through with the rest of the many, much-needed changes.

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31 Oct 2012
1 Comment

Next Agenda Holds Promise of Transparency at MID

Lady Justice revisited

Lady Justice revisited (Photo credit: Scott*)

By Emerson Drake

The items on next weeks agenda range from allowing Board members greater access to both staff and records to possibly placing Board meeting recordings on-line for the public, who can’t make the meetings to view.  To those who are familiar with the MID, these are amazing possibilities.

When Mike Serpa was elected, we had a member who asked the difficult questions and received very few answers.  He was stonewalled by the MID’s own  attorney Tim O’Laughlin and Allen Short made life as difficult as possible. General Manager Allen Short made decisions regarding what material the Board members were allowed to access and prevented any questions from being asked to staff without his permission.  You might ask why they implemented these draconian measures and did they affect the rest of the Board members. The reality is the most of the Board had been acting like bobble head dolls in the rear window of a car (nodding yes) and took Short’s word regarding most MID policies.

But Director Mike Serpa has never been one to just roll over and  agree without substantiation. So when he started to ask questions he was demonized by Short and Van Groningen.  Soon there after Bee Editor Judy Sly jumped on the band wagon and wrote several times about this issue. When Mike Serpa ran for reelection Ms.Sly trotted out this old bugaboo again and helped to defeat him.

So after the “Serpa rule” was passed, if elected Board members had questions regarding policies, all  GM Short had to do was say it was going to require too much staff time and to override him it took a majority of the Board members to request it. I don’t remember a single time Short was over ridden by the Board when this  “too time-consuming” ruling was made in Mike Serpa’s direction.  I have requested a copy of Board Resolution 2000654 but if the MID track record holds true I doubt I will see it (if I see it you see it)  before the Board meeting next Tuesday.

Next is the dotted line between Board Secretary and Allen Short and the Board members.  Short has two secretaries of his own sitting  outside his office but somehow he’s managed to commander the Board’s secretary.  Personally I think it’s kind of funny/sad that no Board members have a MID email account.  All “Board emails go to a central account where the Secretary prints them out and gives them to Short who decides how to handle them.  Even when addressed to specific Board members the emails aren’t given directly to them. They receive them after the fact so to speak.

So why does the Board’s Secretary report to Short? Can you say control?

No wonder Board members, at least three of them, want to discuss this.  In years past,  two of the now retired Board members bragged they didn’t own a computer some of this could have been a help but instead of going through Short with their emails even his buddy Van Groningen employs his private email instead of utilizing one at MID.

MID records dvds of all of their meetings but has a policy requiring destroyed them after 100 days. The policy defines these recording as: for the use of the Board Secretary to provide accuracy in the creation of the meeting’s minutes. They are adamant the recordings are not public records.  I know because I tried, through Public Information Request to gain access to the recording when the 100 days expired and they were going to destroy/ dispose of the dvd. The response I received from MID’s attorney was: ( if we gave them to you they would be public records and then we couldn’t give them to you) talk about convoluted logic.

Would anyone be surprised to discover the MID Board approves the minutes AFTER the recording is destroyed?

We (myself and several members of the public) have been asking for the Board to save their recording physically and on-line for at least 6 years to no avail. We’ve also been requesting them to keep agendas and supporting documents available on-line but haven’t been able to find sufficient support on the Board until now.  The Stanislaus County Board of Supervisors keeps agendas and supporting documents available from 1993 and Board videos are available from 2006.  Don’t you think  the MID Board should start IMMEDIATELY?

During my last meeting with Director Van Groningen, he mentioned he would request an audit if fellow Board members deemed it necessary.  When he brought it up to the Board he phrased it to suggest only a few thousand dollars might be found at great expense.  I reject both premises. The misuse of both the  NON Purchase order process and the Purchase Order System is a great concern.

Purchase Order #54981 was used to spend $127,000 AFTER it expired and in an egregious abuse of the NON-Purchase Order process to attempt to funnel $24,000  ($6,000 in pending checks written but not sent) to Martino Graphics. Somehow Allen Short and Tom Van Groningen along with Glen Wild got together and decided to spend ratepayer money on their own agenda without discussing it with the rest of the Board. There are still $9,000 spent but not accounted for.

Using a second party (Martino Graphics) to disguise money being given to a lobbyist working behind the scenes utilizing local politicos to convince local officials  on the water sale issue is wrong, and if it is shown, anyone who participated should be held accountable.  We can’t even access contracts to lobbyists because they use Martino Graphics to hide their involvement.

I would like to be able to fill you in on the letters from Escalon and Oakdale but MID as usual is dragging their heels on  even simple Public Record Requests.  They prefer to supply Judy Sly at the Bee with confidential memos and  letters since she’ll publish MID propaganda rather than someone in the public domain who will hold their feet to the fire.

It is time for the MID Board to accept the need for accountability. Directors Byrd, Blom, and Warda are pushing  forward so lets support their efforts. 

Gentlemen I thank you as do ALL of the MID ratepayers.

 

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31 Oct 2012

“What’s on America’s Mind” Thursday at 7:00PM

Radio RED 104.9 FM

Radio RED 104.9 FM (Photo credit: Mahdi Ayat.)

Yes, for the next two weeks due to scheduling conflicts I’ll be doing the show on Thursday night instead of Wednesday.

Thursday night’s topics will include the MID and background on the agenda items Garth can’t provide, a Salida update,  Modesto city council issues, Problems at MJC, an update on the cat killer, and a glimpse at national issues that concern all of us.

So tune in on Thursday night for the next two weeks and discuss the issues that concern you.

Our call in number is 347-215-9414

Our Flag Ship Station 104.9 FM Modesto

This link, as always, is for the live AND archived show: http://www.blogtalkradio.com/centralvalleyhornet/2012/11/02/whats-on-americas-mind

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30 Oct 2012
1 Comment

Who’s Being Disingenuous at Modesto Irrigation District Meetings?

Modesto Marathon 7983

Modesto Marathon 7983 (Photo credit: RussellReno)

By Emerson Drake

Today’s MID meeting was an eye opener. Despite having discussed Martino Graphics invoices twice in the last two weeks with me,  Director VanGroningen still couldn’t get the information from his staff that I requested  over a month ago.

Director Van Groningen and General Manager Allen Short have been using MID’s Non-Purchase Order process to circumvent the system.  These two men took it upon themselves to spend  $24,000 that has been documented to this point and possibly more.  The problem is, all the staff has accounted for is $15,000 of the $24,000.  They’ve been using Martino Graphics to funnel money to Carol Whiteside of California Strategies.  Ms. Whiteside has acknowledged to myself and Van Groningen in an email, that she’s received $9,000 so far with another $6,000 pending from September.  The problem, as I see it, is in a letter to the Board (Oct. 7,2012) in which she admits it became obvious in July she couldn’t proceed  with the agreed upon tasks so she resigned her contract effective August 1, 2012.  The invoices were sent in September from Martino Graphics.

Even if it’s decided she should be paid the $6,000 that has been held up, staff  to this point, has been unable or unwilling to explain why the remaining $9,000 was paid.  It didn’t go to Ms. Whiteside, so why did Allen Short authorize the payments?  According to Van Groningen, Ms. Whiteside has reviewed hundreds of documents but quite honestly I find that dubious. But then again anything to justify the expenditure.

What I find amazing is Van Groningen and Short are using this money (at least $15,000 of it)  to convince the remaining Board members to approve the Board/ General Manager/Staff relationship policy that Board members have refused to rubberstamp since they were sworn into office.  The dynamic duo of Short and Van Groningen tried to get outgoing members Cecil Hensley and John Kidd to approve it,  but Director-elect Larry Byrd made a request from the floor and asked the Board to postpone the vote until January.

Public Information Requests Reveal there is NO Contract between Ms. Whiteside and the MID

So what tasks did Ms. Whiteside agree to perform and how do you resign a contract you don’t have?  And what happened to the still unaccounted for $9,000 dollars?  There are many questions but few answers.

Now lets discuss Contract Purchase Order 54981. My copy of the Purchase order confirms it was valid from 19-JUL-10 thru 31-DEC-11  (If you’re wondering, that’s the way they write their dates.) Not to exceed $450,000 dollars plus costs and expenses.  But GM Short continued to use this Purchase Order thru this year to the tune of $127,000 dollars mostly in the amounts of $19,000 and $21,000 monthly.  They basically used the same generic billing month after month in the amounts of :

Client Meeting / Planning Fees…$5,000

Consulting ……………………………$7,500

Communication Services ………..$3,500

Outreach Transparency…………..$5,000

I requested the contracts for any subcontractors like Mike Lynch and Carol Whiteside, and once again I was told they weren’t available because they didn’t have contracts with MID but had them with Martino Graphics. 

I find the use of Martino Graphics as a shield to prevent the public from knowing where the money is going to be unconscionable. After all, if Mike Lynch is being used as a lobbyist the public has a right to know where their money is being spent.

If this is allowed to continue, how many more contracts, if any,  will we find to be “shields”?  Will we hear “oops my bad”, and then pretend everything is hunky dory? I believe one is one too many. Their problem is that PO#54981 was running out of money so they just switched to the Non-Purchase Order process. No one man, NOT even GM Short or Board President Van Groningen should be allowed to circumvent the system for their own benefit.  I’m not suggesting directly for personal enrichment, but for lubricating the wheels of their personal agendas within MID.

I’ll tell you just how ridiculous this gets. Today at the Budget Workshop we discussed Project Number 3XX965. It’s described as being PRJ- Miscellaneous Operating Expense Exp. for $10,000 for misc. administrative & general. So they can spend it on whatever they want and say “it’s in the budget” as they always do. Because that’s exactly what they said to explain away the use of an expired Purchase Order and the Non-Purchase Order process used with Martino Graphics.

You tell me if we need some additional spending constraints on the General Manager and the Board President.

Questions abound but answers, real answers,  are short in supply.  No pun intended.

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29 Oct 2012

MID’s Tim O’Laughlin Withholds Information on Public Information Request

By Emerson Drake

Apparently MID’s attorney feels he can get paid for doing half a job, okay maybe a third of his job.  In my opinion he’s bilking his employer by not completing his assignment properly.  He’s apparently churning for a second pay-day for doing the same work.

I made a Public Records Request at a recent Board meeting for the amounts of the falling water charges that are on our bills in the last 10 to 15 years.

Here is the request and the response.

October 26, 2012

To:

WesternPalms@aol.com (via Email Only)

Emerson Drake

Re: California Public Records Act Request

Dear Mr. Drake:

On October 16, 2012, Modesto Irrigation District received your Public Records Act

Request which was made verbally during the Board meeting, requesting the following

information:

“With regard to the falling water charge that’s on the bill, I would like to request

information regarding the amounts that we’ve been charged for the last 10 or 15 years and the

legality of it.”

In accordance with Government Code section 6253, MID will comply with your request

to the extent that the writings you have requested are not privileged or otherwise exempt from

production under the California Public Records Act, or other applicable law.

Response:

Below are the falling water charges for the last five years:

Falling Water  Charge

2008                                     2009                                2010                        2011

$5,681,470                   $7,063,695             $8,165,250          $10,158,720  

2012

$7,587,965

Should you have any questions regarding this matter, please do not hesitate to

contact this office at (209) 526-7388.

Sincerely,

Tim O’Laughlin

Interim General Counsel

The following link is the pdf response  from Tim O’Laughlin.

son_Drake_dated_October_26__2012_re_Falling_Water_Charge

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23 Oct 2012

Fireworks at the MID

By Emerson Drake

Maybe, just maybe, Tom Van Groningen’s reign of terror at the MID is coming to an end.  We watched for four years as Director Van Groningen and his cohorts in crime, bullied, out numbered, and out maneuvered former MID Director Mike Serpa at every turn.  They  even created a variety of rules which kept Director Serpa from getting access to information he needed to form sound decisions.  These have since become known as the Serpa rules.

Today Director Van Groningen was caught in his own trap.  He and Allen Short had gotten together to place an item on the agenda to discuss Proposition 26.  Directors Byrd and Blom questioned this item being placed on the agenda and when Van Groningen was challenged for his unilateral actions he replied he had followed the rules. Tim O’laughlin insinuated Van Groningen was correct. But Director Nick Blom had a copy of the Board rules which he read. These rules delineated Van Groningen had violated Board policy.

Tom, I feel like you’re handcuffing us…You’re the reason this Board can’t come together

When Director Van Groningen accepted responsibility. Director Byrd said it wasn’t good enough.  He pointed out Van Groningen had repeatedly broken policy guidelines and his continuing to accept the responsibility wasn’t getting anything done differently, especially in light of the almost 20 years Van Groningen has served on the MID Board.  He should have known better. After  a few minutes of discussion during which Tom Van Groningen was asked directly if he was the one who leaked the Board’s lawyer’s confidential memo to Judy Sly,  Van Groningen said no and suggested Ms. Sly be asked since she was in the back of the room.  Ms. Sly was asked and she replied “no comment.”

The memo is about the falling water charge on MID electric bills.  The timing is interesting since the memo was leaked immediately after the water sale to San Francisco went down to defeat. Ms. Sly has been using this confidential board memo as a basis of several articles in the Bee.  Remember Ms. Sly and the Bee came out in favor of the sale even BEFORE they had read the contract. Now she’s apparently using the memo in an attempt to further her crusade in favor of the sale.

So the issue came down to a vote.  The result was a  3-0 in favor of removing the item from the agenda. In all three votes which were eventually taken today, Directors Byrd, Blom, and Warda voted yes and Van Groningen and Wild  remained silent.

The second vote was regarding the time alloted to the public to speak.  In years past it had been a five-minute period but during the water sale, in order to quiet dissension,  the Board had voted to limit public comments to three minutes. Today that was reversed,  3-0,  with the caveat that if the line of speakers was too lengthy the time could be temporarily reduced by the Board President.

Then came the discussion regarding the make-up of the Water Advisory Committee.  At the last MID meeting Directors Glen Wild and Ton Van Groningen had proposed having 14 people on the committee.  This week Director’s Blom and Byrd, with the support of Paul Warda, proposed a much smaller committee. One member from the City of Modesto nominated by the City Council, one member nominated by the Farm Bureau, and one each from each of the Board’s Directors whom would reside in the Directors district. After a short conversation regarding a member from the Chamber of Commerce it was settled.  Again the vote was 3-0 in favor of the smaller 7 person committee.

So all in all, it is possible there is a light at the end of the MID tunnel, and, for the first time in a long time, it might not be an on-coming train.

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23 Oct 2012
1 Comment

Salida MAC Committee Meets Tuesday at 7:00 PM at Salida Library

Salida MAC Newsletter – October 2012

NOTE: So much content and information was shared at our September 2012 Salida MAC meeting that I decided to compile it on a blog because there’s no way all of this info could fit into our printed newsletter. ~ Editor, Katherine Borges

 
Supervisor District 3 Report and Salida Annexation Update – Stanislaus County Supervisor Terry Withrow reported that as of September 25, they were about 15 days into the 60 days for the contracted term of the Goodwin Consulting Fiscal Feasibility Study and then the city and county will decide if they can come to a cost-sharing agreement. He reiterated that he supports Salida’s citizens and “will not push anything that isn’t what Salida wants”. Supervisor Withrow then gave a brief history of the Salida Community Plan.
 
 
There is a petition available 

on-line to protest the attempted annexation of Salida by Modesto you will want to read and possibly sign.

 
Here is the link for the petition: 

=

Remember knowledge is power so read up and understand what Modesto politicians are trying to do and then let your voice be heard.
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22 Oct 2012

Why All the Rush Over Falling Water?

Don Pedro Daybreak - Day 39

Don Pedro Daybreak – Day 39 (Photo credit: Velo Steve)

By John Duarte

MID leaders have taken up an urgent review of a falling water credit that water users receive for the value of the hydroelectric power generated at Don Pedro.  This sudden “crisis” follows a series of fast moving actions on the part of MID following the failed (board vote 5-0) water sale proposal previously championed by Board President Tom Van Groningen.  Many participants in the water sale dialogue/debate requested that the district form advisory groups to review district issues more in depth, over longer terms and with better access to district experts than the board meetings allowed. 

 

The current advisory committee proposed by the board, selecting representatives from local groups to form a committee of committees, is more likely to be an effort to weight the group against ag in order to extract a particular outcome, rather than to improve the dialogue surrounding complex and important issues.   In addition to a selected membership with no guarantee of transparency, the committee will be charged to address speculated claims under Prop 26.   It appears that some district leaders would like to see the equivalent of six wolves and a lamb vote on what’s for lunch, while piping the scent of simmering lamb into the room.

 

A review of the district history and current situation is in order.  Irrigation districts frequently possess riparian water rights that can be used to generate hydroelectric power.  With the available water flow, technology and marketability of electricity, any irrigation district that did not develop hydroelectric power from these resources would be negligent towards its irrigation customers and the public for the lost opportunity.

 

Irrigation districts have multiple options as to how they choose to market the generated hydroelectric power.  The two most frequent choices are to market it wholesale to a second party (as does SSJID and OID from their New Melones project), or to form local power authorities and market it retail to local customers (as does MID and TID from the Don Pedro project). 

 

SSJID and OID use the revenue from wholesale power sales to benefit their agricultural water users, to the point where water costs are negative and rebates are often sent to customers from the power revenues.  PG&E buys the power wholesale and delivers it to its customers as part of a supply blend over a large market area.  All sales and costs are established in free market transactions.  Electric ratepayers in the irrigation district boundaries are served by a for-profit utility and do not enjoy any financial benefit from the cheap hydroelectric generation.

 

Many OID and SSJID area electric customers are served by MID power delivery per the four cities annexation that MID executed in the 1990s.  Other OID and SSJID customers are now considering options to form their own power distribution company.  I do not believe that these efforts will lead to the irrigators giving up the benefit of the hydroelectric power to the retail electric customers.   There are few voices in the PG&E power service area that would not prefer to be in a locally run municipal service area.   

 

MID and TID chose early on to provide retail delivery of their hydroelectric power to in-district electricity customers.  This has given our communities the advantage of locally governed municipal power.  For many decades MID and TID ratepayers enjoyed enviably low electric rates in contrast to those served by for-profit delivery, particularly those served by PG&E.   MID and TID irrigators have gained from the value of the falling water based on their well-established senior water rights.  This arrangement has provided great benefit to the community in affording low rates for both electric and irrigation customers, local control and better accountability.

 

MID now faces a number of financial challenges.  The district is increasing costs of operating beyond the growth of its power deliveries.  From 2010 to 2011, MID increased overhead costs by 20 percent or six million dollars as it delivered slightly less electricity than the year before.  MID projects to increase total costs of operations by 5% per year from 2013-2017 while it delivers only slightly more (0-1% per year) electricity.  This is all on top of an already bloated budget that is absorbing a number of past strategic errors (Mountain House, over purchase of green power, four cities, pension benefit giveaways, Phase 2 Water Plant…). 

 

Recently, a water sale of a significant amount of the district’s water was proposed by the district.  The revenues from this sale were to go to the district’s general fund to serve a long and exhaustive list of financial needs.  The sale was opposed by local interests and failed.  The proposal that failed would have raised $1.5 million dollars per year.  This amounts to one-fourth the increase in the districts overhead in just one year.

 

Adjusting the falling water charge will not provide equity between customer groups within the district.  It may not be required by prop 26.  If it is required by prop 26, there may be a number of irrigation districts that need to take a broad look at the beneficiaries of their hydroelectric generation.  It will also not substantially alter the financial course of MID or the obligations of its electric ratepayers. 

 

This demand by MID Board President Tom Van Groningen for an extremely urgent review of the policy appears to be his personal tantrum over the failure of his ill-considered water sale.  It must have be a very personal failure for him, as he may have seen it as a last ditch effort to redeem his decades of failed service and a litany of ill-considered and costly MID initiatives adopted under his reign.

 

 

John Duarte

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