TODAY AT 5: Poseidon-obsessed OCWD will try to ram $1 Billion desal project down our throats.

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Editor:  Please show up to today’s (Wednesday June 6) Orange County Water District meeting, 5pm at 18700 Ward Street in Fountain Valley, during which, no doubt hoping to fly under the radar the day after our historic primary election, the Board will quietly consider (and probably try to pass) a “revised term sheet” or pre-contract for the controversial $1 billion Poseidon desalination plant in Huntington Beach.

The following article, cross-posted from Surf City Voice, was written and published today by our friend John Earl, and originally entitled:

Spurious “Ad-Hoc” Committee pushes Billion-Dollar Desal Project.

California law says that the Orange County Water District, which manages the Orange County Groundwater Basin, belongs to the 2.4 million people who live in its service area.

But some of the District’s 10 board members act like it’s all theirs.

The Brown Act, which protects the people’s right to check and address their local government agencies, would have them act otherwise.

“The people of this State do not yield their sovereignty to the agencies which serve them. The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know. The people insist on remaining informed so that they may retain control over the instruments they have created.” 

Ralph M. Brown Act, California

Desalination Funding “Ad-hoc” Committee members, from top, left to right: Cathy Green, Shawn Dewane, Stephen Sheldon, Vincente Sarmiento, Denis Bilodeau, and de facto member, Scott Maloni (Poseidon Resources VP)

The Orange County Water District  (OCWD) Board of Directors’ (BOD)dream of building a $1 billion ocean desalination plant in Huntington Beach—without first considering alternatives—is out of control, and it could turn into a boondoggle for the ratepayers of the District’s 19 member-agencies (“producers”) who pump 75 percent of their water from the Orange County Groundwater Basin.

Thousands of documents, some marked confidential, obtained by the Surf City Voice under the California Public Records Act, reveal collusion in private and—to all appearances—illegal committee meetings held over the last 2½ years between five OCWD board members and CEOs from the developer, Poseidon Resources Inc., to create a contract between the two entities to build and run the proposed desalination plant.

The cover for those meetings was the so-called Desalination Funding ad hoc committee, which then board-president Cathy Green unilaterally created and appointed members to in July 2015.

Based on the committee’s recommendation, the full board of directors will consider—and probably pass—a revised term sheet (pre-contract) for the Poseidon project at its June 6 meeting.

The likely passage of the term sheet will undoubtedly lead to more secretly held “ad hoc” committee meetings designed to push the Poseidon project toward a contract.

If that happens, Poseidon’s water would cost OCWD ratepayers a minimum of $1.3 billion more over the next 30 years than for imported water they would otherwise have purchased from the Metropolitan Water District of Southern California, according to an analysis by project opponents (link).

Several points about the relationship between the OCWD and Poseidon stand out after an analysis of public documents and board actions taken over the past several years:

• The Desalination Funding Ad hoc Committee functioned as a standing committee but without public meetings as required for standing committees; thus, it violated the Brown Act.
• The goal of the Desalination Funding Ad hoc Committee is to negotiate a contract with Poseidon and complete the $1 billion project regardless of the alternatives.
• The majority members of the OCWD BOD, five of whom sit on the Desalination Funding Ad hoc Committee, had no intention to seriously study alternatives to the Poseidon project, despite falsely telling a state permitting agency in October 2017 that it had already done so.
• The Desalination Funding Ad hoc Committee and OCWD staff treat Poseidon Resources as an inseparable partner and exclude other project stakeholders with expert knowledge of ocean desalination, including producer representatives and prominent critics.
• Poseidon Resources VP Scott Maloni (often with other Poseidon CEOs) participates so often in committee meetings that he is almost a de facto member. Maloni works closely with OCWD at all levels to promote the Poseidon project, even editing letters written by staff on behalf of the BOD to state permitting agencies.

About Committees Formed by Local Legislative Bodies

Under California law, elected decision-making bodies like city councils, school boards, and water districts can form committees to study and make recommendations back to those elected bodies about specific issues.

The legislative body must approve all standing and ad hoc committees in a formal action  at a public meeting whether they will be subject to the Brown Act or not

The elected legislative body can’t avoid the Brown Act’s open-meeting requirements by calling a committee “ad hoc” when it actually functions as a standing committee.

“In short, an agency may not circumvent the requirements of the Brown Act simply by labeling a committee ‘ad hoc’ if it does not truly meet the definition,” according to a training presentation recently made to city planning commissioners by the League of California Cities.

Standing Committees

A permanent committee that meets to discuss administration and finance issues throughout the year (continuting subject matter jurisdiction) is a standing committee and is subject to the Brown Act, which requires them to hold public meetings.

Ad hoc Committees

Ad hoc is a Latin term that means “for this purpose only.”  Unlike standing committees, ad hoc committees do not have a “continuing subject matter jurisdiction.”

Their term is not on-going or open-ended. They must have a specific purpose for a set time, after which they must disband. They are advisory only and report to the full elected body at the end of their term.

Ad hoc committees are not subject to the Brown Act. They may hold closed meetings without public notices, agendas, and minutes.

A temporary committee formed to come up with ideas for next year’s Fourth of July parade is an ad hoc committee.

OCWD’s Desalination Funding Ad hoc Committee

OCWD’s Rules of Order spells out its policies on forming committees, but those rules aren’t necessarily consistent with OCWD practice or the Brown Act:

The Desalination Funding Ad hoc Committee violated the Brown Act the moment Director Cathy Green created it by decree, not by an open-meeting vote of the board of directors as required, in 2015, as official minutes of the July 1, 2015, meeting of the Board of Directors show.

From official minutes for the OCWD BOD meeting July 1, 2015: Then OCWD BOD president Cathy Green forms the Desalination Funding ad hoc Committee without a formal action of the board required by the Brown Act. (General Manager Mike Markus gives a timeline for studying and reporting to the board about Poseidon project alternatives, but that report was never made and likely never will be. Director Sheldon falsely implies that OCWD staff are consistently studying water management projects listed in the OCWD’s Long Term Facilities Plan as Poseidon alternatives).

Oddly, the Desalination Funding Ad hoc Committee was never put on the agenda for a vote of approval by the OCWD Board of Directors, as required by the Brown Act.

Instead, the board incorrectly assumed (based on Director Green’s de facto proclamation in July 2015, alone) that the committee already existed when it approved its five members on January 6, 2016  (after three meetings of the committee had already been held in September, October, and November of 2015, respectively.)  From the June 6 agenda:

From the June 6 minutes:

Financial disclosure forms filled in by OCWD staff and sent to the California Fair Political Practices Commission for the committee’s five members estimated that—based on a stipend of $250 per meeting—they would receive $1,000 – $2,000 that year for up to eight committee meetings,  hardly a sign that the committee was temporary.

In fact, expense reports for members of the Desalination Funding Ad hoc Committee show that 23 committee meetings were held between September 2015 and March 2018, an average of about nine meetings per year, with no end in sight; again, it clearly functions as an ongoing, not temporary, committee.

Expense and attendance records for members of the Orange County Water District Board of Directors  Desal Funding Ad-hoc Committee:

• Agency appointments (806 disclosure forms): Names of members of the Orange County Water District Board of Directors appointed to the “Desal Funding ad hoc Committee” and other OCWD committees. For each committee, there is an estimated yearly stipend for each director serving on that committee. The Desal Funding Ad hoc Committee is highlighted.

Expense purchasing card report. Lists all meetings attended and stipends paid during the stated time period:

• Denis Bilodeau (current OCWD board president) – June 2015 thru May 2017;
• Director Cathy Green – June 2015 thru March 2018;
• Director Shawn Dewane – June 2015 thru March 2018;
• Director Stephen Sheldon – June 2015 thru March 2018;
• Reyna June – 2015 thru Dec 2016;
• Director Vincente Sarmiento – January 2017 thru March 2018.

The OCWD BOD renews membership to the Desalination Funding Ad hoc Committee every two years, but it operates on an open-ended basis, as the directors’ expense records show.

Although the committee’s name suggests that looks specifically for “funding” for the project (i.e. grants or loans), its purpose was never defined by the board, which never officially approved the committee anyway.

Emails obtained under the Public Records Act show that the Desalination Funding Ad hoc Committee also has an ongoing subject matter jurisdiction that includes matters regularly deliberated on by the full board of directors. Thus, it functions as a standing committee subject to the Brown Act.

For example, an agenda (below) of discussion topics for Discussion Topics – December 9, 2015, shows the wide range of topics normally considered by the full board.

Not all the more than 20 Desal Ad hoc committee meetings had written agendas, but the wide range of topics related to the normal business of the full board of directors is clear from emails obtained from a public records search.

Another “confidential” email (below) shows that the committee will deal with “the concept of OCWD taking over the equity and/or debt financing for the project…”

Poseidon VP Scott Maloni and other Poseidon CEOs’ heavy involvement in the Desal Funding Ad hoc Committee meetings, about half of them according to OCWD Chief Engineer John Kennedy, who administers the meetings, betrays the committee’s Poseidon bias as well as another Brown Act violation.

Section 54952.7 of the Act states that “All meetings of the legislative body of a local agency shall be open and public, and all persons shall be permitted to attend any meeting of the legislative body of a local agency, except as otherwise provided in this chapter.”

Response to Critics

Debbie Cook, who has monitored the Poseidon project since she voted against it in 2005 while sitting on the Huntington Beach City Council, slams the Desalination Funding Ad hoc Committee as another example of the lack of transparency in how the OCWD Board of Directors conducts meetings.

“Nothing is more troubling about our water districts than their lack of transparency,” she says.

“For years,” she adds in reference to the committee, “the OCWD directors have excluded the public from meetings where they collude with Poseidon Resources about all aspects of this $1 billion project.”

Cook says that calling the Desal committee ad hoc or advisory is a ruse.

“Numerous State Attorney General Opinions refute their assertion that the Desal Funding Committee is merely advisory and therefore exempt from public notice and participation,” she says.

“An advisory committee forms to accomplish a specific task in a short period,” Cook asserts, quoting from a written opinion by the State Attorney General’s office.

“But the Desal Funding Committee has been given no such specificity,” Cook points out. “Its members have been discussing every issue related to the Poseidon project, including distribution options, water quality issues, permitting, costs, and financing. ”

OCWD Board of Directors president Denis Bilodeau disagrees. When confronted about the desalination committee on his way out of a recent board meeting, he said: “It is all perfectly legal.”

Also read “Hidden Committee” for the perspective of OCWD Chief Engineer John Kennedy, who administers the Desalination Funding Ad-hoc Committee. 

Note: Supporting documents will be added to this page on a daily basis. Check back daily.

Desalination Funding Ad hoc Committee

• Discussion Topics – December 9, 2015
• Call to discuss agenda ahead of time
• OCWD legal powers as they relate to purchasing and selling Poseidon water. Discussed at ad hoc desal
• Need ad hoc cover
• Not as crazy as last meeting
• RE Huntington Beach ad-hoc
• Confidential Financial Model ad-hoc desal
• Discussion of Poseidon equity rate for project
• HB Desal Water Unit Pricing Model ad hoc committee discussion
• Poseidon Financing Scenarios Confidential ad-hoc
• Scheduling meeting for Poseidon’s convenience but excluding the public