CONTROLLING WATER - PUBLIC, PRIVATE, OR OTHER?
A water organization/agency can be defined as an organization which operates for the purpose of controlling, treating, acquiring, using or supplying water. The organization can do one or more of these tasks and we have agencies and companies in Monterey County that do some or all of these tasks. There are three principal forms of ownership that such an organization may take:
- A private, for profit company,
- A public agency, or
- A private, not for profit entity, known as a mutual company. For the purposes of this article, it is assumed that all three will be regulated by the same rules imposed by the state and the federal government.
A private, for profit company exists to create a profit for its owners or shareholders. If it doesn't make a profit, it will cease to exist. Thus, when a private company owns the right to the regulated natural resource or the right to distribute it, there is little room to make a profit except to continually exploit the resource until a ceiling is reached on the amount available. Conservation of the resource by users would allow the number of users to increase up to a certain point. With respect to water, an increase in profit could occur if additional supply became available. There are a variety of ways to increase the supply, which may or may not be economically attractive to a private company. There may be an advantage to a private company in that it may efficiently manage the natural resource better than a public entity. A private board of directors decides on the direction of the company; for example, whether or not it needs to ask the regulating agency for permission to increase fees; whether or not it thinks it would be economical to find a new supply [Note, private energy companies did not see it as profitable to build more power plants in the late 1990's].
A public agency's advantage over a private company is that "social welfare is substituted for private gain as the major objective of management" (Marshall, R., "The People's Forest", University of Iowa, 1933, reprinted 2002). Public ownership removes the problem of ownership change which generally and continually occur with private companies. Long range planning is much easier to do if the ownership is not continually changing and where profits are not a necessity. A public agency has a governing body also to make decisions. The public is invited to participate in the decisions that it makes. Its members may be directly (an elected body) or indirectly (an appointed body) seated. A directly elected board is responsible, first, to the public, and an appointed board is responsible to the body that appointed them and only indirectly to the public. It should be noted that the voters in the Monterey Peninsula Water Management District have voted not to approve several projects which would increase the water supply on the Peninsula.
The third option, a mutual company, offers some of the benefits of both a private and public organization. It is a private company, but the shareholders are users of the resource and usually property owners. This type of water company is generally a non-profit company and would have rules on how its board of directors is appointed. A concern with such an organization is that it is not generally understood if renters are shareholders in mutual company.
Notes about water agencies:
There are over 570 California water agencies/ companies listed by the Association of Metropolitan Water Agencies. Less than 30 are private companies, of these about 10 are mutual companies.
Private companies include Cadiz; Cal Am; California Water Service Company.
Public agencies include special districts (such as sewer districts), cities (Fresno, San Francisco), counties (Los Angeles), regional (East Bay Municipal Utility District) and irrigation districts (West Side Water District).
Private companies may cover several/many cities (Cal Am Monterey, Felton, Thousand Oaks) and usually own the water source - much of the time they depend on wells. Public agencies may or may not own their water supply. For example, the City of Santa Barbara owns its reservoir at Lake Cachuma but also enhances its water supply with water from the California Water Project. Santa Barbara built, with bond funds, the infrastructure to pipe the water , which it buys, from the California Water Project to the coast. Some agencies buy water from other agencies. San Francisco Peninsula cities buy water from the supply at Hetch Hetchy Reservoir, owned by City of San Francisco.
State and Federal Agencies involved with water:
CPUC, EPA (Clean Water Act), Interior Department (Colorado River); Federal Bureau of Reclamation (Federal Dams), CalEPA; California State Water Resources Agency (California Water Project) and many more which deal with the environmental impacts of the use of the resource.
There are five public water agencies listed by the Association of California Water Agencies in Monterey County:
Marina Coast Water District
Marina acquired a privately owned company for $950,000 in 1966. The District was
organized as a County Water District under the provisions of Division 12 of the
California Water Code. Responsible for sewer; water distribution; Directly elected
Board of Directors. Owns water/waste water collection systems at Ft. Ord.
Monterey County Water Resources Agency
Manages, protects, and enhances the quantity and quality of water and provides
specified flood control (no water distribution)
Dam operation, flood protection, water quality Advisory Board. Accountable governing
board is Board of Supervisors.
Monterey Peninsula Water Management District
Manages, augments, and protects water resources. Elected board; not responsible
for sewer, distribution or quality State Legislation: West's California Water Code,
Appendix Chapters 118-1 to 118-901; 1978.
Pebble Beach Community Services District
Sewage & reclaimed water distribution Elected by public. Monterey County Public
Works - Community Service Area #75 (Salinas)
Links to more information
Complied by R. Tokmakian January 2003
