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Privatizing Groveland CSD raises questions


One customer and a union representative told Groveland Community Services District board members Monday they are concerned about their exploration of selling water and sewer assets to a private company.

“I just want to make sure they get as much information as possible, to make an informed decision,” retired teacher Maureen Griefer, who volunteers at Tenaya Elementary School, said.

Michael Eggener, a union representative for 10 to 12 Groveland CSD employees, passed out fliers opposed to privatizing, stating “What sounds too good to be true, may be . . . ”

“The public needs to be looking at this,” Eggener said. “If you lose your board, you lose local control. Look at this closely.”

The district is facing the need to replace aging pipes and other infrastructure that could cost $50 million to $100 million, as well as rising California Public Employees’ Retirement System costs, said Jon Sterling, Groveland CSD’s general manager.

“As a small and somewhat remote agency, with a limited and relatively static customer base, our options for dealing with these issues are limited,” Groveland CSD board president Bob Swan said, reading from a prepared statement dated Aug. 8.

“One such possible approach would be privatization of water and wastewater services,” Swan said. “In this scenario, a private company would acquire the district’s assets and liabilities, and would operate the system as a much larger corporate entity, with much greater financial resources.”

Preliminary talk

The budget committee of the board of directors has had a preliminary discussion with California American Water as “a first step in examining the feasibility of the privatization approach,” Swan said.

Griefer asked, “Would you consider putting it out for bid?”

“Yes,” Swan replied. “It’s not a buddy-buddy deal with these guys.”

The concept of privatizing is not beneficial for Groveland CSD, the customers it services or its employees, Eggener said.

“Public entities are not supposed to be for profit, they provide services to people they serve,” Eggener said. “A private company has to make their money. They’re not acting as a charitable organization. They are going to raise your rates.”

Representatives for California American Water, which serves about 630,000 people in 50 communities in the state, could not be reached for comment Monday.

Sterling said California American Water is planning to send staff to Groveland to inventory the district’s water and sewer equipment. When they will be in Groveland has yet to be finalized.

‘Not incompetent’

Eggener told the board he saw what Steve Perreira, who’s served nine years on the Groveland CSD board, said last month in favor of exploring privatizing water and sewer.

“Some people are wigging out because we lose local control,” Perreira told The Union Democrat in July. “But the board is incompetent, it’s been that way forever. We’re incompetent nobodies.”

Eggener said Monday, “With all due respect, I disagree with you, Mr. Perreira. You’re not incompetent.”

Perreira replied, “I did not mean this board. I mean in my nine year’s experience. . . . I’m not backing down. Generally speaking, for seven years this board by and large was incompetent.”

Swan reiterated that he and the rest of the board will not rush through the process of investigating if privatization will benefit the district and its customers.

Perreira said he is “pro-privatization” but “not convinced.”

Board members John Armstrong, Scott Wemmer and Bruce Carter said they were looking forward to hearing more about how privatization might work.

Wemmer said he has worked with California American Water in the past. He said some people might be surprised at their level of competence.

Eggener asked Wemmer if his experience with California American Water constitutes a conflict of interest. Most of the board pledged to put any potential final decision directly to Groveland CSD ratepayers via referendum.

Swan repeated what he said last month about the district’s interest in privatization.

“This is exploration of a concept at its earliest stage,” Swan said. “The board has not taken any position on privatization. We are at a stage of figuring out if it is even possible, before spending the larger effort to determine if it would actually be a benefit to ratepayers.”

Sterling has given notice he intends to leave his job as general manager for Groveland CSD on Sept. 30, 2017. The board voted unanimously Monday to move $6,000 from water, sewer and parks funds to the 2016-2017 budget for recruiting a replacement for Sterling.