Ron Gastelum's MWD Exit Interview: Adequate Water Supply Predicted

Ron, in your March 2003 interview with the Metro Investment Report, you focused on the Southern California region's water-supply constraints and noted that the region must wean itself from dependence on Colorado River water. An update would be appreciated.

Overall, water supply is good. We're not anticipating any shortages in the foreseeable future or the near term anyway in the next couple of years. However, because of the extended drought on the Colorado River, and because of extended dry weather here in Southern California, our water supply has been drawn down as a region.

Metropolitan just completed an update of its integrated resources plan. This is the blueprint for investment by Metropolitan as well as our member agencies in water supply, water quality, and infrastructure to ensure we are reliable for at least the next 25 years. The plan, if executed as I believe it will be, virtually assures that we can be reliable for that 25-year period.

That's a short, lawyer-like answer to a complex question, Ron. What supporting documentation and recommendations are in the IRP report that underlie your good news conclusions. Note: newspapers today report that some local water agencies are concerned that water supply is being overestimated.

Well, there are some areas of urban Southern California that are not within our service area, and I can't speak to those areas. But within our service area, we have a plan that details the amount of storage, the amount of water recycling, the amount of groundwater contamination cleanup, how we're going to deal with the cutback in the Colorado River, as well as adapt to changes that will evolve from the California Bay-Delta Plan that is being implemented by the State of California and the Department of the Interior.

We can look, then, to this plan, and I think in a very transparent way, be ready to engage the question about whether we have enough water. We're distinguished from other areas of the state in that we have more diverse resources than most. We have far more storage than most. And where people tend to get in trouble with water supply is rapid growth and limited resources to draw upon that might be related to groundwater basins or even the State Water Project that just doesn't give them the flexibility that we have been able to develop.

In a companion interview in this month's MIR with John Schatz, the GM of the Santa Margarita Water District, he asserts that one of the challenges of regional water agencies is to educate the public on what's needed to have a reliable and safe water supply – namely increased cost. And in your last interview with MIR you also made a similar assertion, saying the business community, the public, environmental groups, should all be at the table and understand that in a very open and transparent way how more public money is going to create a return on investment. What are the likely costs of meeting regional growth projections with reliable water supply going forward?

Metropolitan's water costs should be reliable for the next 25 years. We'll relate to implementation of our integrated resources plan, and we estimate that water rates will increase at or about three to five percent, at least for the next 10 years. So in the range of the rate of inflation, we believe we can make all the investments that are called for in the IRP. And we also believe that it's going to take continuous education of the public and a very transparent process so that the public will understand where they're money is being spent.

You've repeatedly made an eloquent and clarion call for the diversification of water sources over the last couple of years. Can you give our readers a thumbnail sketch re: how successful the District's been in diversifying its water sources and supply?

Historically, the Metropolitan Water District, as well as our member agencies here in urban Southern California, have relied on three basic sources: the Colorado River, the State Water Project, and local ground water. During the last big drought in the late 1980s and early 1990s – those three sources barely got us through. So, Metropolitan and our member agencies – who refer to ourselves as the "Family of Southern California Water Agencies" – adopted this integrated resources plan with specific benchmarks and specific goals to increase and develop new water supplies.

So, as you look at our progress from 1995, when this plan was formulated, we have had a dramatic increase in storage. We have today about ten times more storage capacity than we did in the last drought. We have dramatically increased our conservation. And so today we are using about the same amount of water as a region as we did in the 1970s while adding upwards of five million people in that time period. So the goal is to aggressively make investments by diversifying our portfolio, have a plan that everybody can see, and then set benchmarks that everybody can judge us against on a regular basis to evaluate how we're doing. I mentioned that we recently updated our integrated resources plan. That was five years after the plan was adopted. I would expect that we will update it every five years. But on an annual basis, we'll be filing water assessment reports for public review on how we're doing.

Ron, let's turn to the signing by President Bush this last month of the Cal-Fed bill – the first since 1996. It's asserted by strong proponents like Sen. Feinstein that it will inject much needed investment in our regional water supplies. Your take: What is the significance for Southern California of Cal-Fed being signed this year?

I believe the significance certainly at this stage is the United States government has come to the table to participate with the State of California in addressing in a very broad fashion water quality, water supply and environmental issues that have been long standing and need to be resolved. Without the federal government at the table, it would not only be much more expensive, but perhaps almost impossible to resolve these issues given the very large presence of the federal government in water resources management in California. So, the true significance here is a signaling from the United States Congress and the President that the federal government is now very serious in working with the State of California to implement a plan to achieve those goals.

What must the State of California do take full advantage of Cal-Fed?

The State of California needs to put on the table a plan. And a plan that might work out over 10 years, that everybody can see specifically what would be accomplished, what can be accomplished, what would be the benefits, how it would be paid for, and a schedule for accomplishing these goals. I believe the State of California is going to put that plan on the table shortly, given the federal government's action. It will be, again, a very transparent and public process, but it will provide the focal point for people to come together to make the decisions. And Metropolitan's belief is, once a plan is identified and the decisions are made, it will be far easier to provide the financing, not only at the federal and state levels, but at the local level as well. We all are going to have to invest and be prepared to pay our fair share of the costs of this plan. From our perspective it will be affordable given the great benefits that could result, not just for our area, but for the entire state.

The Bay Delta Authority asked a number of appointed task forces over the last year to recommend a cost structure for support of the Bay Delta. What is MWD's role and responsibilities re: Cal-Fed and the Bay Delta Authority?

Metropolitan's role has been varied, but always in a support role. So for example, MWD spent considerable resources working with the scientists of the State of California, the federal government, and others in understanding the biological and environmental issues that have to be addressed. Our philosophy is, without good, solid science and the facts, you can't make these necessary, long-term decisions. In addition, Metropolitan played a very active role in Washington, D.C. as a part of a coalition of water agencies to support passage of the federal reauthorization bill. Metropolitan is now going to have to engage, along with others, in the review of the 10-year plan of what actually might be implemented. We view our role here in urban Southern California as providing the voice for our service area on how we're going to participate in Cal Fed as well as to preparing to step up and share in the financing of the plan when it's adopted.

You've announced, Ron, that you intend to retire as CEO of MWD at the end of this calendar year. Assess for us the successes over the last six years that you're most proud of at MWD.

Well, I am most proud of our basic reform of our rate structure, because without a solid financial structure we can't be the kind of player we need to be in making the local investments in water recycling and other local water resource developments. Or to contribute to programs on the Colorado River or in Northern California that will improve water quality and water reliability through the state. It is that basic rate structure and financial capability that will distinguish us from many other public agencies around the state, which are finding themselves unable to make the necessary investments in infrastructure to prepare for not only today's demand but certainly the next 25 years.

The negotiation of the agreement on the Colorado River, called the Quantification Settlement Agreement or QSA, was another important achievement for Metropolitan while I was serving as CEO. It established the basis for how we're going to, as a state, live within our allocation of Colorado River water and be much more efficient in the way that we use and share the Colorado River water that is available to us.

And I think finally, we've been working on this Cal-Fed federal authorization legislation with leaders in Congress for almost 10 years. So having that authorization finally occur at the tail end of my service at Metropolitan was really a great bonus, and I feel that it's something we can build upon.

There has to be more, Ron.

There are lots of things that you're called upon to do in this position, but those are the major accomplishments that I set about to focus my energies on. As I look back at the opening of the Diamond Valley Lake and what that has been added to our water reliability here in Southern California, I certainly get some of the credit. The major credit, however, goes to my predecessors and others, so I'll simply cite that as something that was very good for Southern California that happened on my watch.

And what's been left to your successors? What remains, what challenges do you leave in the drawer for them to pick up on?

Well now that these basic foundational blocks are in place – the rate structure, the QSA agreement, Cal-Fed authorization – implementation is the job ahead for the new CEO, and is by no means a simple job with many of the same challenges, but it is a foundation to build upon.

You know, MWD is one of the rare successful regional agencies in California with diverse interests, geographical, economic and political. You've stabilized the politics during your tenure, but your leaving again opens up the issues of San Diego and Orange County vs. Los Angeles, and urban vs. agricultural, and others. Talk a little bit about the politics that have to come together around your successor, whoever that might be.

Metropolitan Water District is a place for diverse interests throughout urban Southern California to come together. There will always be controversy, there will always be politics. That's the nature of regional government. But the success of the Metropolitan Water District has been in recognizing that everybody that comes to the Metropolitan Water District has something to say, and working hard to try and build consensus. Obviously it doesn't always happen. Sometimes it spills over into the legislature or into the courts. But by and large, Metropolitan has been successful in building consensus and, perhaps more importantly, the agreement of all these disparate interests to invest in the projects and resources that need to be brought to bear to do our job.

The CEO of an organization like this probably shouldn't have a particular agenda, other than trying to facilitate consensus building and trying to build bridges with other people in the State of California that we need to partner with to be successful. Though strong personalities are good, and sometimes you need to be very strong in your positions, but regional government demands consensus building, and I think that's the challenge ahead for the new CEO and Metropolitan, and always will be.

Let's close with this one: Given your announcement and it's already November, can you give our readers a sense of where your talents will likely go – where you're likely to be come the new year?

Well, I hope to continue to be involved in public service in one form or another. I've very much enjoyed my association with the Los Angeles Chamber of Commerce, the Children's Museum of Los Angeles, and other good organizations. I am a lawyer by training, so I may practice law. But I'm also looking at some other business ventures, perhaps not even in the water area. But the good thing about retirement is that you have an opportunity to take a breath and maybe do things a little differently.