Corrections
The Monterey County Herald, 06/25/2012
The continuation of consideration of an agreement between the city of Pacific Grove and water-project developer Nader Agha wasn't the subject of a hearing or council vote last week as reported in a Saturday story in The Herald. The item was pulled off the council's Wednesday agenda by Mayor Carmelita Garcia and delayed until July 18.
UPDATE & RELATED NEWS ARTICLE:
But city manager says risks outweigh benefits, LARRY PARSONS, Herald Staff Writer, 06/22/2012
Despite a highly critical report by City Manager Thomas Frutchey that concluded that the risks outweigh the potential benefits, the council voted 5-2 this week to keep the proposed preliminary partnership alive - on yet-unsigned paper.
"The matter has been continued to July 18,"...
An attorney for Agha also took issue with the negative
recommendation by Frutchey.
"Unfortunately each of (his) arguments is flawed,"
said attorney Paul Hart in a 10-page memo countering Frutchey's seven-page
analysis.
ABSTRACT: The City of Pacific Grove City Council is scheduled to hold a regular meeting on Wednesday, June 20, 2012 at 6:00 P.M. in Council Chambers, City Hall, 300 Forest Avenue to consider Consent Agenda Item No. 14A UNFINISHED BUSINESS Agreement initiating a relationship with Nader Agha and Moss Landing Commercial Park, LLC. (MLCP) to develop a desalinated water project able to meet the needs of Pacific Grove and the Monterey Peninsula. The AGENDA REPORT, prepared by Thomas Frutchey, City Manager, includes a RECOMMENDATION:
1. Receive
an update on the agreement to initiate and provide funding to establish a
public/private partner relationship between Nader Agha/Moss Landing Commercial
Park, LLC and the City of Pacific
Grove.
2. Decline
taking action on the agreement at this time. (If Council disagrees, it has the
ability to take one or more alternative actions, including approving the
agreement.)
CONCLUSION: “I cannot recommend that the City become a
partner in this project; the downside risks far outweigh the possible benefits
that cannot be achieved by other means.
It is my professional opinion that the City’s goals can be better
achieved and our citizens better served by not proceeding with this agreement
at this time, but instead, continuing as a full participating partner in the
Water JPA.”
Selected excerpts from the AGENDA REPORT are presented and the AGENDA REPORT, including City Manager Thomas Frutchey's Report, FORMATION AGREEMENT BETWEEN THE CITY OF PACIFIC GROVE AND MOSS LANDING COMMERCIAL PARK, LLC. (June 1, 2012), George Schroeder's and Nader Agha's Letter to Monterey Mayor Chuck Della Sala Re: Technical Advisory Committee of the Water Authority (June 5, 2012) and Nader Agha's Monterey County Herald Letter to the Editor (June 12, 2012), City of Pacific Grove Prehearing Conference Statement, Public Utilities Commission (June 4, 2012) and Schedule Proposed by California Public Utilities Commission (CPUC) Administrative Law Judge (ALJ) in Pre-Hearing Conference (PHC) (JUne 6, 2012), is embedded. Parenthetically, Schroeder and Agha state in their letter to Monterey Mayor Della Sala that "we decided that we would withdraw our proposal from the consideration of the TAC, and did tell them that at the June 4th meeting, and further told them that we would work only directly with the Water Authority or other committee it has. We request that our proposal be examined by the Water Authority along with Deepwater in the further detailed analysis the Water Authority is planning to undertake."
6:00 p.m.
CALL TO ORDER
14 UNFINISHED BUSINESS
- Agreement initiating a relationship with Nader Agha
and Moss Landing Commercial Park, LLC. (MLCP) to develop a desalinated
water project able to meet the needs of Pacific Grove and the Monterey
Peninsula PG
273
Reference: Thomas Frutchey,
City Manager
1. Receive
an update on the agreement to initiate and provide funding to establish a public/private
partner relationship between Nader Agha/Moss Landing Commercial Park, LLC and
the City of Pacific Grove.
2. Decline
taking action on the agreement at this time. (If Council disagrees, it has the
ability to take one or more alternative actions, including approving the
agreement.)
RECOMMENDATION of Thomas Frutchey, City Manager:
1. Receive an update
on the agreement to initiate and provide funding to establish a public/private partner relationship between Nader Agha/Moss
Landing Commercial Park, LLC and the City of Pacific Grove.
2. Decline taking
action on the agreement at this time.
(If Council disagrees, it has the ability to take one or more
alternative actions, including approving the agreement.)
Importantly, in City Manager Thomas Frutchey’s AGENDA REPORT,
he states:
Peering into the future is always uncertain, but the City’s
involvement in the People’s Project would appear to have a low likelihood of
positive benefit, and a high risk that the costs would exceed the benefits, for
the following seven reasons:
1. The CPUC and other regulatory agencies are not likely to approve
Mr. Agha’s project (or either of the other two projects) as currently
conceived.
2. Cal-Am’s application before the CPUC does not to provide
a proper means by which CalAm will be authorized to buy water from the People’s
Project to convey to ratepayers.
3. Mr. Agha and the City have markedly different goals, and
the proposed partnership is ill suited to assist either party in reaching its
goals.
4. Given that a public partner does not appear necessary,
the City has nothing of value to offer Mr. Agha, but does impose significant restrictions on
his freedom to act.
5. This project is way beyond the City’s capabilities, and
would impose unacceptable opportunity costs on the other responsibilities and opportunities
we have in the coming years.
6. There are significant financial and legal risks of the
City’s involvement in this project.
7. The resources Mr. Agha is willing and able to commit are
not likely to be sufficient to see this project through to completion. Thus, Mr. Agha will likely need at least one other partner, which will complicate an already challenged
relationship even further.
CONCLUSION
The Council subcommittee has consistently championed this
project and the partnership. As City
Manager, however, my perspective, and the factors that I must consider, are
inherently different...
...However, as City Manager, I cannot recommend that the City
become a partner in this project; the downside risks far outweigh the possible
benefits that cannot be achieved by other means. It is my professional opinion that the City’s
goals can be better achieved and our citizens better served by not proceeding
with this agreement at this time, but instead, continuing as a full
participating partner in the Water JPA.
Consent Agenda Item No. 14A
CITY OF PACIFIC GROVE
300 Forest
Avenue, Pacific Grove, California 93950
