When OCWD’s Poseidon Lie Officially Started: Looking Back

Note: The Surf City Voice website was destroyed by hackers in December, 2019 and is under reconstruction. This story was first published July 17, 2018 under the headline, “OCWD’s Poseidon Lie Started Officially on July 24, 2013.”

By John Earl
Surf City Voice

We will never know exactly when some members of the Orange County Water District Board of Directors (OCWD BOD) decided to put the interests of Poseidon Resources over the interests of the District’s 2.5 million ratepayers, but July 24, 2013, might be remembered in OCWD history as a day of infamy.

Left to right: Shawn Dewane, Denis Bilodeau, Cathy Green. Voting for the 2015 Poseidon/OCWD term sheet. Photo: Surf City Voice

That’s when OCWD officially became a partner with Poseidon by dusting off and amending a nearly forgotten 2010 confidentiality agreement signed with the company three years before.

That agreement allowed for the exchange of private financial information that could lead to a water purchase agreement requiring OCWD to buy 56,000 AF of Poseidon’s expensive desalinated water per year for 30 – 50 years regardless of need, which to this day hasn’t been demonstrated officially or otherwise by OCWD or Poseidon.

The resolution, which passed 8 – 0 (two directors absent) continued to  protect the company’s supposed trade secrets while obtaining “additional information from  Poseidon Resources to study the economic feasibility of the seawater desalination facility in Huntington Beach that may lead to a water purchase agreement for the entire production capacity of the plant.”

Opponents and proponents of the project packed the boardroom and expressed their views to a board that by previous behaviors had already made up its mind.

Bruce Whitaker was the only director who expressed skepticism even though he voted for the resolution.  To Whitaker, it boiled down to pure economics—ocean desalination is still too expensive—and the lack of a demonstrated need for the project.

OCWD Director Vincent Sarmiento. Photo: John Earl

But Director Vincente Sarmiento’s views dominated the Board’s decision. He said it would be “reckless” not to study how the Poseidon project could work, along with all other water reliability options, and that the District was not committing to the project.

But the coup de grâce for any claim of transparency or honesty ever made by the OCWD BOD about the Poseidon project since that 2013 board meeting was the following exchange (recorded on audio starting at 1:15) between Director Denis Bilodeau (the current board president), OCWD legal counsel Joel Kuperburg, and OCWD General Manager Mike Markus.

Bilodeau: In terms of the confidentiality agreement, I guess that’s something that will be reviewed by our district counsel?

Kuperberg: Yes

Bilodeau: Okay. And in terms of the receipt of the information, have we figured out what we’re going to do with that information? That would go to the staff and staff only, I take it?

Markus: Hmm huh (indicating yes)

Bilodeau: And I just want to make sure that the public knows that this isn’t going to be a—you know—secret meetings occurring or something outside of the Brown Act. You know, we’re, the board is not going to receive the information directly. I take it that the staff is going to receive, boil it down, and perhaps as appropriate, provide the information to the board in a public forum?

Markus: Absolutely.

But Bilodeau’s promise was absolutely broken in at least 23 secret and arguably illegal “ad hoc” meetings that took place between 2015 and May of this year, revealed in documents received and published exclusively by the Surf City Voice (Bilodeau confirmed a 24th meeting occurring in May of this year).

The purpose of those meetings was to discuss all aspects of the Poseidon project to renegotiate a term sheet between Poseidon and OCWD approved by the OCWD BOD in 2015.

OCWD President, Denis Bilodeau, at State Lands Commission hearing on Poseidon.

Staff presented the ad hoc committee’s renegotiated term sheet to the full OCWD BOD last June 6 but the board postponed its vote after public citizens and some board members called for more time to consider information previously known only to the ad hoc committee members and Poseidon.

The revised term sheet is on the agenda for this week’s OCWD BOD meeting (Wed. July 18) but project opponents have asked the Orange County District Attorney’s office to decide whether the term sheet negotiations were void.

Some confidential Poseidon documents shared with board members on the Desalination Funding Ad hoc Committee:

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