PO Box 5715, Carmel, CA 93921 jason.burnett@gmail.com 831.238.0009

March 25, 2014 Dear MCDCC Chair Koller, I understand the Central Committee is considering taking a position regarding the Measure O. This measure would, among other changes, have the Water Management District perform a study of the feasibility of a public take-over of California American Water (CalAm). I urge you and the rest of the Central Committee to adopt a position opposed to Measure O for the reasons described below. When you and I helped start the Center for Change following the historic victory of President Obama in 2008, we envisioned a permanent, professional organization that would help elect qualified democratic leaders to local, state and national office and then provide the tools, resources and support to those leaders to help them serve our communities. I was honored to receive your support when I ran for Carmel City Council in 2010 and then for Mayor in 2012 and have certainly benefited from the training and support provided by the party and the Center for Change. I believe, as I trust you do, that we want to be known as the Party willing to take on the important, tough issues, endeavor to forge consensus, and work towards practical solutions that will benefit our constituents and communities. We also want to avoid taking symbolic “political” stands that divide rather than unite. On the Monterey Peninsula there is no more important an issue than solving our water supply crisis and, if the failed attempts in the past are any indication, there is larger challenge. The Monterey Peninsula faces a state-imposed Cease and Desist Order (CDO) deadline of January 1st, 2017 to find an alternative water supply source(s) or face economically devastating water rationing. I, along with the other five mayors on the Monterey Peninsula, have taken this challenge head on. If the previous three decades of water debate on the Monterey Peninsula were defined by controversy and lack of action, the past year has been civil and productive. Whereas in the past nobody could agree, just last summer we reached a settlement

agreement between 16 diverse parties1 resolving many issues and creating a framework for solving the open areas. The parties who signed this settlement agreement are very diverse and the ability to find the common ground on complex technical, legal, and policy questions is a major victory for our community. We have the Farm Bureau agreeing with the Sierra Club, the Monterey Peninsula Business Coalition agreeing with LandWatch, ratepayer groups agreeing with CalAm, all the Mayors, all the Supervisors, all the directors of the Water Management District among many others on the same page. Not only has the community come together to back a portfolio of water projects, we have done so in a way that significantly advances the public interest. Over a year ago the Mayors outlined eight concessions that CalAm would need to make in order for its project to earn our support. These concessions included cutting the profit potential in half, saving ratepayers an estimated $84 million in net present value savings (over $100 million over the course of the project), providing for a public Governance Committee2 to provide transparency, accountability and a public voice in the project, and robust contingency planning because failure is not an option. CalAm, after months of negotiations, accepted all eight concessions. We have a broad coalition and a great plan but perhaps even more important is that we have a working team comprised of the mayors, the Water Management District and CalAm. Because CalAm accepted our conditions, we no longer are fighting them and instead are working collaboratively to deliver the water supply solutions our community so desperately needs. Permitting and building a $400 million desalination plan in Monterey County is no simple feat and we certainly expect bumps along the way. However, with the right team in place I have confidence we will be able to work through those challenges and deliver a project.

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The only real threat to our continued progress is the effect of Measure O driving a wedge between two of the partners – the Water Management District and CalAm – such that the current healthy tension turns into unhealthy division. In fact, Measure O could very easily disrupt the public financing we agreed to in the Settlement, actually increasing CalAm profit potential and therefore our water rates. Worse yet, Measure O stands to slow the progress on the water supply project itself. If we do not deliver on a water supply project and face the state-mandated Cease and Desist Order (CDO) without a new supply, we will face water rationing and will simply have no meaningful water for business (homes get priority for health reasons). The Monterey Peninsula economy will grind to a halt, many thousands of jobs will be lost, and our community will be harmed in untold ways. Water rationing will cause significant unemployment not only on the Monterey Peninsula but throughout Monterey County. Some have said we should call the state’s bluff and dare them to cut off our water supply before a new source is online. I’m not willing to gamble with our communities in this way and neither should you. Unfortunately the state is losing patience with the Monterey Peninsula because of past failures and has shown an ability elsewhere in the state to impose real hardship on communities that fail to provide sustainable water supplies. Furthermore, we all know that we must seek a modification to the CDO and the best prospects for obtaining the two-year extension that we need is by showing real progress on getting off the Carmel River and delivering a water supply project. The State has imposed the CDO of January 1st, 2017 to get the community’s attention – they have succeeded – and ensure we remain focused on delivering a new water supply. Defeating Measure O would send a strong signal that we remain focused on a new water supply to serve our community and would put us in the best position possible for returning to the state to seek a modified CDO deadline. I would be remiss if I did not also mention that some of the statements made by Public Water Now are simply not true. For example, PWN exaggerates both the profit potential of regulated utilities and exaggerates the rate increase we are facing as we move off of the Carmel River. I do not want to make a bid deal about these errors because they will be addressed by our court system but I would ask you to consider the credibility of those seeking your endorsement. It is ironic that those advocating for a greater public role

choose to do so by misleading the very public they say they want to empower. Some who have made these statements may have been mislead by others and may legitimately say that they are no expert in water supply or the rules of the California Public Utility Commission and therefore should not be held accountable for spreading misleading statements. In closing, the two questions you should ask are (1) does Measure O advance a water supply project and (2) does it help position the community seek a modification to the CDO to avoid water rationing? The answer to both of these questions is no. Measure O puts our water supply project in jeopardy and risks throwing us into economically harmful water rationing. Measure O is a symbolic gesture divorced from the practical realities of water supply. If passed, it will divide our community right at the time when we need to stay united. I got involved in local politics through the Center for Change and got involved in water because I believe that our local elected officials should take on the tough challenges facing our community. Many local elected officials are working on water supply and I know of nobody seriously advancing water supply solutions (other than George Riley) who supports Measure O. In fact, most of us working on water supply are advocating a NO vote on Measure O. We have invested a substantial portion of our time in finding a water supply for our community and I see your vote tonight as a referendum of our work. Please show your support for your elected officials working so hard on a water supply and vote NO on Measure O. Respectfully,

Jason Burnett


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