McCloud's special district meeting looks at potential water sale for bottling business

Deborra Brannon
The MCSD board and staff respond to public questions and comments at last Wednesday's special board meeting about the proposed sale of water to a potential bottler. Left to right, district general manager/public works superintendent Wayne Grigsby, finance officer Kimberly Paul, secretary Teryl Smith, board director Chuck Ott, board vice president Anne Simons, board president Cathy Young, and board director Terry Hitchcock.

The proposed sale of water by the McCloud Community Services District to a prospective bottling company elicited significant public participation during a special district board meeting April 1, 2015 in the McCloud Elementary School gym.

Early in the meeting, board vice president Anne Simons said the meeting was held in order to include the public “from the get go. The main thing tonight is to hear your questions and concerns.”

About 15 different people addressed the district staff and board about concerns they had following the presentation by prospective water customer McCloud Artesian Spring Water Company at the March 18 district public works meeting. The spring water company’s principal developer is Vincent Estell.

Several people asked the board whether or not Vincent Estell and his company, Estellco Holdings, had been thoroughly vetted.

Board president Cathy Young said the district had not run a background check on Estell or Estellco.

Simons said the board would go through a vetting process and also planned to hire a water lawyer.

Asked about the timeline for contractual arrangements, Simons said, “There is no timeline. We wanted to hear from the community, do some research and get information first.”

Director Chuck Ott pointed out, “We’re not jumping into a contract. This proposal is a starting place. We’ll start from there and tell them what we want.”

Simons said it was possible the county or the Local Agency Formation Commission may require an Environmental Impact Report on the proposed plan.

“If they require an EIR, the contract will have to adhere to its findings and the district will not do a contract before the EIR is complete,” Simons said.

Brandon Criss, Supervisor for District 1, which includes McCloud, told the board that the county is aware of its role.

“We have outstanding staff working on it,” he said.

Other concerns and questions addressed the amount of water to be included in the sale, contract language, employment, and the bottling plant’s possible link to McCloud’s potential hydroelectric plant.

Environment

The question of environmental review was brought up by a resident of Mount Shasta who said her well is nearly dry.

With the new Crystal Geyser bottling plant set to open soon, she said she was concerned about the availability of water throughout the area in current drought conditions.

Young responded, “We’re in a four-year drought and we’re talking about a bottling contract. That’s a concern for me. A drought is a drought.”

Simon said the district has a large overflow that exceeds its allowed amount.

A former district board said because of that large overflow, “If we don’t use this water we’ll lose it to the state in this drought, and we won’t see a dime for it.”

The water requested in the proposed contract is 200 gallons per minute, 24 hours a day, totalling 288 gallons per day.

District general manager and public works superintendent Wayne Grigsby reported that Intake Springs, from which the water would be sold, produces 3,000 gallons per minute in the summer.

Contract

The proposal’s statement that the contract would be transferable upon the sale of the business “without alteration” elicited concern from a member of the public.

Director Terry Hitchcock said he was not in favor of that contract term and Young said she agreed with him, “unless the new owners would have to renegotiate a new contract.”

Simons said the board does not yet know enough about the ramifications of transferability. “We’ve been told this is the norm but we don’t want it if it’s harmful to us.”

Financial data on potential revenue generated by the water sale to Estell was expressed as annual amounts for the first 10 years on materials handed out for the meeting.

It was pointed out that there was nothing to indicate when the water bottling plant would actually be built and begin producing.

One member of the public said, “We have no guarantee that if we sell Estell the water that they’re going to build a plant at all.”

Simons said the district had “no control over the timeline of construction” but could include in the contract a penalty schedule if the plant was not built by a certain time.

The board was asked if they had considered requiring a completion bond.

Young said she was not sure the district could legally request that because the construction would be on county land.

Hitchcock said the board will do “everything it can to do a good contract – good for them, good for us.”

Employment

The subject of potential employment was brought up when someone asked whether the jobs Estell had described would be guaranteed to the local work force.

“The law doesn’t allow them to guarantee local jobs. They must be an equal opportunity employer and consider everyone,” Simons told her. “We don’t actually have jurisdiction over that.”

One resident told the board and the audience, “No one here tonight is going to work at this plant. We’re too old. But we need to get some jobs in here. How are you going to manage the service district? Who’s going to pay? You’ll have to keep raising our rates.”

Director Raymond Zanni said the board is trying to do something good for the community. “I’ve seen livelihoods ripped away. We want to make our water benefit our people.”

Simons remarked that the board was looking for a way to revitalize the community rather than allow it to continue to decline.

Hydroelectric project

Possible linkage between the proposed water bottling plant and the hydroelectric generation project the district has been working on became a source of brief contention during the meeting.

McCloud Artesian Spring Water Company included in its proposal an offer to contribute $520,000 toward a pipeline the district plans to purchase to help with the hydroelectric plant in return for a connection from the cement water holding tank directly to the bottling plant.

One member of the public pointed out that the company’s offer demonstrated a link between the projects.

“They are not tied. The hydroelectric plant is separate from the bottling contract. We may do both, or one but not the other,” Simons stated.

Annexation

A suggestion that the district annex the mill site where the proposed bottling plant would be built also was answered by Young, who said the district “cannot make them annex.”

The speaker responded, “But we can say to them, if you want our water you must be annexed. We’d have more people to share costs.”