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Environmental Leader Blasts Santa Monica Council for Use of Water Funds

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By Niki Cervantes
Staff Writer

January 11, 2018 -- The head of Santa Monica's environmental task force on Tuesday strongly criticized the City Council for allowing $56.4 million to be drained from the City’s water fund to help finance mega-projects not related to water use.

“I was mortified,” Mark Gold, the head of the Santa Monica Task Force on the Environment, said of learning water money would be diverted.

Gold appeared before the council as it was considering -- and then approved -- a five-percent hike in the rate for using the municipal water system ("Santa Monica Prepares Five Percent Hike in Water Rate," January 8, 2018).

In a Monday letter to the council co-signed by David Pettit, another task force member, Gold urged the Council not to divert the funds to help finance a massive modernization of the City Yards, which will cost an estimated $114 million for the first phases ("City Should Use 'Water Settlement Funds' to Help Fund City Yards Project, Finance Director Says," January 3, 2018).

Between $6 million and $7 million is also set aside in the City’s 2017-2018 fiscal year budget to help pay for the $66 million City Services Building -- a project that has been criticized for its exceptional cost.

Gold, who for yesrs served as executive director of Heal the Bay, one of California's most prominent environmental organizations, urged the Council to use the remaining groundwater settlement funds for aquifer remediation until the sites are closed by the Los Angeles Regional Water Quality Control Board.

“To ask for ratepayers to cover any of the costs of groundwater remediation or additional water treatment is unethical given that a large pot of money exists to do exactly this,” the letter said.

“Although the settlement agreements do not, by their express terms, constrain the city’s use of the settlement proceeds, it isn’t morally just to utilize those settlement funds for new city offices and facilities when the settlement funds were negotiated based on the cost to restore the City’s precious groundwater resources.”

Councilmembers Sue Himmelrich and Terry O’Day were also critical of the move.

Himmelrich hadn’t been aware of the money shuffle during budget discussions (although Mayor Ted Winterer and Council Member Kevin McKeown said they were).

“I was shocked,” Himmelrich said.

At the heart of the issue is $345.9 million in funds received via settlements over ground water contamination with Shell, Exxon-Mobil, Chevron, Gillette and the Boeing Company between 2003 and 2012.

An update from City finance director said the City has spent and/or allocated approximately $246 million of water settlement funds on water remediation, legal costs related to the settlements, and water treatment operations since 2006.

Of the remaining $122.7 million in unrestricted water settlement funds, the Council has committed or spent just over $56 million on non-water related projects, leaving approximately $66 million in unrestricted funds, the report said.

At Tuesday’s meeting, City Attorney Lane Dilg noted that since the water fund money in question had never been restricted to water remediation, how the council uses it is not a legal issue but a “policy” judgment.

Gold said the City should keep the remaining $66 million of unallocated settlement funds to “restore and sustain one of Santa Monica’s most precious natural resources: our groundwater supply.”

Tuesday’s vote pertained only to the rate increase.

A decision on diverting water-fund money for outside projects won’t come until the council receives updated information this summer from Dean Kubani, the city’s chief sustainability officer, on progress on the City’s goal of becoming completely water independent by 2020 and a new five-year water rate estimate.


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