To the Editor: Calls for city-Navy partnership

I was very disappointed in learning at the May 17 City Council meeting that the city’s wastewater treatment plant (WWTP) discussions with the Navy would be shifting from the open and transparent Infrastructure Committee venue to closed-door meetings. The city has a spectacularly poor track record regarding management of the wastewater fund in general, and an even worse track record dealing with the Navy. According to the city WWTP consultant, we have lost $7 million dollars through escalating costs caused by Navy delays. Below I elaborate on some factors that need to be included in the Navy discussions.

1. To date the city has been asking for a 50-year lease on the Navy property rather than a real easement in perpetuity. The 50-year lease covers the needs of the loan agency for Phase 1 of the new WWTP. Depending on the timing of Phase 2 of the new WWTP, a 50-year lease may or may not meet the loan agency’s Phase 2 requirements. A 50 year-lease does not protect the financial interests of the Ridgecrest ratepayers. The WWTP will be fully functional at the end of 50 years as a result of maintenance and repair paid for by the ratepayers. The discussions with the Navy need to ensure that the financial investment by the ratepayers is fully protected.

2. For the last two years, the Navy has underpaid its proportionate share of WWTP revenue by more than one million dollars per year. To be more precise, FY16 was a $1.4M underpayment. This fiscal year, FY17, will see another Navy underpayment of $1.4M or more. That loss is in addition to the $7M loss noted above. If the Navy financial contract is not changed prior to the startup of the new WWTP, say two years from now, the Navy will have underpaid in just that five-year period roughly $7M. The Navy rates need to be increased now so it is paying a proportionate share of the revenue. This agreement needs to be negotiated up front.

3. The city has serious difficulty negotiating with the Navy for some reason. I do not blame the Navy for zealously protecting its financial interests. I do blame the city for not performing due diligence to protect ratepayer financial interests. The new management contract should ensure that increased costs are automatically reflected in what the Navy pays. I am tired of the council repeatedly stating that the Navy is a customer when the Navy is the one which historically tells the city what it can charge.

4. The continuing WWTP delays have created a significant wastewater fund reserve. That reserve will presumably be used as a down payment to decrease the loan dollars needed to build the new WWTP. Because of Navy underpayment, the Navy has not contributed to that down payment. It needs to pay its portion of the loan down payment. That agreement needs to be negotiated up front.

I do believe an honest joint partnership with the Navy could provide mutual benefit to both the city ratepayers and the Navy. Unfortunately, history is very clear that the only entity benefitting from our current partnership is the Navy. That is totally inappropriate. I have not seen any change in city organization or management that would solve the current problems. I am an unapologetic advocate for the city ratepayer, and I have no intention to change. It is up to the city council and the city staff to demonstrate they up to the task of managing a joint effort with the Navy.

Stan Rajtora

Story First Published: 2017-05-26