Andy Winnick

Andy Winnick

Economics Professor, CSULA and TAIPD President

Joe: Do you mind if we record the conversation?

Andy: No, I get myself recorded in various contexts. Anyhow, to answer your question, I guess I have been socially and politically active since I was a teenager starting out in the civil rights movement, back in the 50’s and 60’s, so I’ve been doing this all my life. The environmental thing is important to me. What motivated me with the last two big environmental projects I was involved with however wasn’t so much the environment, although that was a piece of it, it was local control.

Some year’s back, I was living in a town in Ohio, and this was another college town. Everyone bought their electricity, everyone had a contract with the local big electric utility company, and they had a crazy rate structure. The rate structure was the more you used, the cheaper the electricity. And they charged higher rates to consumers than they did to commercial interests because commercial interests used a lot more. The people paid more, and we were really pretty frustrated with that whole system. So we mounted a campaign to buy our electric infrastructure, we bought the electric substation outside of town, and everything that went from that substation into the city (it was a small town). We owned all the wires and meters and what have you, and we did have to build a small infrastructure to maintain it. The key thing we were able to do was totally reverse the rate structure. Our goal was to encourage people to use less electricity, not more electricity. And to encourage people, even then many years ago when solar was just coming on board, to think about alternative energy sources. And so, rather than costing less the more you bought, it cost more the more you bought. We actually flipped the entire rate structure and provided very low rates for individuals who had small homes who didn’t have much money, and then as their home got bigger and their electricity use got bigger, their rates went up. We charged commercial interests more than residential interests, which we thought was much more appropriate. And then we had a boon, which was that because the city was buying it in bulk; legally the utility company had to sell it to us at wholesale prices. So, actually the city got the total sum of electricity a lot cheaper than we did buying it individually, so we were actually able to do this, pass on the lower rates, and reverse rates at the same time. And that’s been going on now for 20-25 years. And that’s very successful.

The most recent effort is here in Claremont. Basically, it was a similar issue, motivated both by local control and environmental concerns. The environmental concerns were probably more important here, in the sense that obviously California is in the middle of a drought, water is getting very expensive, there is a lot of consciousness about climate change, which 25 years ago there wasn’t of course. And so, the environmental issues are big. Again, the private corporation, their interests were exactly counter to what we wanted. In fact, there is a clause in the legal structure that the public utilities commission has for water companies: for the private companies, if you conserve water – so you use less water – and therefore you pay less, that cuts into their (Golden State’s) revenue. They (Golden State) have planned revenue streams; therefore they get to raise your rates to punish you for having saved water. That’s insane if you tried to conserve, this was the sort of thing from a conservation stance made absolutely no sense.

Beyond that was that Claremont and all the surrounding communities here used to own their own water, they all had public utilities and as did Claremont. Water wasn’t really an issue here because you had artesian wells under the city and you have fairly decent runoff from the San Gabriel Mountains. Even though this is a fairly arid climate, the city pretty much had enough water. The point is that it became very clear to us is that Claremont made a big mistake when Claremont sold its water system off to a private company back in the 1920s, while the surrounding cities did not., Claremont was an extremely conservative city in the early part of the century, I mean extremely conservative, it had blue laws that it wouldn’t sell liquor, you name it; it was a very conservative place, and part of that conservatism was a preference for supporting private capital enterprise over community interest, which led to the sale of our water rights and infrastructure.

So, the City sold the water company. Many surrounding towns did not, and we are paying 50% more for our water, it’s obviously much more expensive. So the issue came up as to why it was more expensive, and we realized it was a combination of factors. One of which is the company pays very high salaries, million dollar salaries. They are obviously liable for corporate taxes, which as a city owned public utility would not be (the case), and Golden State has this rate structure that is designed to punish you for conserving water. And more than that, they have an interest in maximizing the use of the most expensive water. There is water here from three sources: Colorado River through piping it in, Northern California through the aqueduct system, and our own artesian wells. It’s obvious artesian wells are the cheapest possible water. Why would they want to use a lot of that? They would rather bring it in from Colorado because it costs more, and since they are guaranteed an 8% profit or more, if costs go up profits go up. They don’t care about using cheap water. So, the city has an incentive, we want to keep our water cost down as low as possible. We don’t want to deplete our artesian wells, but we would probably use them to a larger extent than they are using them. The other thing is that the colleges and a number of people in town have been interested in the potential for gray water usage. But, Golden State wants you to use drinking water to water your trees. They want to sell you water. If you start reusing water, you cut into their water usage, their profit. So they simply refuse to talk, play any role in such a conversion. And finally their rates are controlled by the Public Utilities Commission in Sacramento, which is a very captured regulatory agency that largely is in the service of the utilities that they regulate. They swap staff back and forth and executives move back and forth. It’s there to protect the corporations in providing an adequate stream of utilities to the people, but it’s not really representing consumer interests. Over the years, when Golden State Water goes for rate increases, the city has hired lawyers fight them, but we’ve never won a battle. So there’s a strong interest for having local control to make our own decisions in how to structure the rates, how we use water, and so on.

As far a process and getting it done, in the Ohio example, it was relatively easy. We approached the corporation and we made them an offer. They were not particularly open to that, but when the city made it clear that they would go through the legal process to take it, and they would be subject to a court negotiated price anyhow, they finally decided it wasn’t worth the money to fight it, and they negotiated a price and sold it. Golden State Water has no intention of doing that. And that’s relevant because it meant that there would be a big public fight. It wasn’t going to happen simply with the city government negotiating with the company. Luckily this has had a history in the city. The League of Women Voters has done research and advocacy on this issue for over twenty years. There have been citizen petition drives to urge the city to buy out the water system every four to five years for the past twenty years. There is also a whole Claremont sustainability program in the city; the city is committed to a long-term sustainability process. So, this was fertile ground, whereas doing this in Orange County would have obviously been much more difficult, but this was fertile ground. Anyhow, once Golden State Water made it clear that they would fight it, and we would be in a major legal battle, and we would have to go to court to determine a price, the city had to decide if it was going to go along with that. Many of us were agitating the city to do that. Unlike a big city, the city council members are really known by the citizens. I personally know all five of them fairly well. That’s partly because I was involved with city council when I was a human services commissioner and so forth. Three of them are Democrats, and the Democratic Club that I am involved with endorsed and campaigned for them. So we know them fairly well. So we agitated with them to go ahead, and they made the decision to do that. But then the big issue came with the money, the cost of buying the water system. You are not going to buy a water company from current revenue. You are going to have to borrow money. You will have to float some sort of bond issue to borrow the money in order to make the purchase. And unlike a situation where you have a negotiated settlement, you don’t know what the price is going to be because it’s going to be determined by the courts, and you can’t go into court and do this unless you already know you have the money. So the city had to decide to that. The city put on the ballot a measure to raise the money through borrowing to affect the purchase. At that point all hell broke loose. What really got things going was when Golden State decided to fight us. The best estimate we have is they ultimately threw 1.2 million dollars into the fight against us.

What ended up happening was some local townspeople who are basically associated with the Tea Party movement essentially came out against it. We don’t know if they reached out to Golden State Water or if Golden State Water reached out to them, but they formed an organization totally funded by Golden State Water to fight it. The first thing they did was file paperwork to put a resolution on the ballot for a different bond issue simply designed to –people weren’t going to vote for both – maybe confuse them. And they hired people to go door-to-door to start signing petitions for this alternative bond measure and agitate against the city buying the water system. At that point, people that were in favor, really had to organize. I guess here, the difference with other communities was that you have a large group of highly educated and politically experienced people (that live in Claremont). They came together. The skill level, the knowledge level was high. They put together an organization. They raised money from personal contributions. Some wealthier people contributed a few thousand dollars; most people contributed less than one hundred dollars. Their total fundraising was only a total of less that $31,000 all together. But they organized a very well designed public campaign.

We carved the city into voting precincts. For every precinct you have a precinct captain. You organize a group of people in each precinct and you carve it up and then bought – which are publically available- voter lists (the same things are used in regular political campaigns) that are a matter of public record. For every address in the city it shows you how they are registered, which elections they voted in, if they are married, and names of all of the voters in the household. What we did, which was typical of any door-to-door political campaign, you go door-to-door, and talk with people. What was a little bit different here was, normally, you only talk with people that vote regularly, because if they are not going to vote, why waste your time. And if you are running a political campaign, and you are a Democrat, you will talk with the Democrats and Independents, you probably won’t talk with the Republicans. They just aren’t going to vote for you. And you don’t want to stir them up and get them agitated about voting anyhow, so you ignore them. But, this was totally different. This was the first time I was involved locally with a campaign of this sort because this was really not a political issue. (Actually that’s not true, earlier I had worked on the issue of providing affordable housing in Claremont.)

The City Council is split three to two, Democrat to Republican, one of the Republicans has been head of the local Republican apparatus, so it’s not just somebody. The other has a real ambition to be an Assemblyman or State Senator, and he is in the Republican Party, so he doesn’t want to piss off his base. But what was amazing was that all of them after being talked to were willing to agree with the premise that this is really a matter of local control. That was the common unifying theme. We tried to avoid any hint of partisan politics. This was a question of the best interests of the people. It was necessary to gain public control. The water rates were high. They were going to corporate profits and high salaries. That made a big difference. We talked with people much more broadly than you usually do in a door-to-door campaign.

I organized my precinct, and I had four to five people walking in my precinct, and I walked in my precinct myself, and it was very interesting. I talked with virtually every person, and I had a couple of people that were opposed to it, but 90% of the people I talked with were willing to talk, had heard something about the issue, but were very confused, and that’s a very important part of this process.

Golden State Water hired a CMC retired faculty member, that was an economist, and he did a study. He was paid by Golden State more than $100,000 to do this, which was designed to prove that it was a bad idea to buy the water company. He exaggerated what it would cost us, how long it would take, and argued that we couldn’t provide an adequate level of services, that we had no ways of doing maintenance on the system, and so on. This report was widely published and discussed. That confused a lot of people -that was a retired economics professor from the Claremont Colleges saying this was a bad idea. So, we had to counter that. I was approached by a number of people in the movement, since I am an economist, to do a response. So I did. His work was literally corrupt as far as I am concerned. I wrote up a 6-7 page analysis responding point by point to his thing, and then I was asked to condense that into something that could fit into two sides of a piece of paper. That became a flyer and we passed that out all over the city. The point I’m making is that this was fought over a very factual basis. It wasn’t just rhetoric and language. This really appealed to people’ rational side. Now, in a place like Claremont with its education level, this is not a typical town for running a political campaign. There are places that if you gave a piece of paper with facts and figures and arguments on both sides, you’d never get anybody to read it. Here they read it. They asked for it. The other thing that we did was sit down with the local newspaper; it was willing to be a forum for this debate. It published and devoted far more many pages to letters to editor than it normally does. It basically published both sides. So the Tea Party people wrote their arguments. We wrote ours. And this debate was once a week in the newspaper. There really was detailed debate that you could read. When I did this sort of thing in Ohio, it was similar, we had a small local newspaper, and that played an important role. The point I am making is that’s an important part of the process. If you can get a local paper involved, and you can get in essence a free forum of information flow that you don’t pay for, that’s really a valuable way to get information out. We didn’t attempt to do any sort of radio or television thing, we didn’t have the money for it. So basically the process was three things: door-to-door campaigning, the newspaper debate, and meeting with organizations. We went to various community organizations and they were at least willing to listen to the debate. And that’s it. In essence that worked. I think people were pissed that their money going to the water company to pay for water was being spent to convince them to not buy the water company. That side put maybe 20 mailers in everybody’s mailboxes. Very slick, heavy paper, glossy. They hired professional PR companies and people were getting extensive mailers in their mailbox regularly. We were putting out some, but we couldn’t compete in number or sophistication in glossy, use of color, what have you. But I think those we did put out sounded more reasonable, more rational, and people began to really see through the arguments that Golden State Water and these conservatives were making. When I was doing my door-to-door work, I knocked on my conservative neighbor’s door, and we discussed the measure. Both said they were active members in the Tea Party, and they were both supportive, willing to listen to the arguments. What really attracted them was, they were both libertarian, the aspect of local control. They are against anything big-government, but this is local government. The non-partisan and the local control nature made a difference. The Republican and Democratic members of the city council actually went out together in pairs to got do door-to-door work, and this shocked people. When is the last time in the last 10 years you saw Democrats and Republicans working publically together? It was a rare thing.

The environmental stuff was certainly important. They wanted water conservation. They wanted a water utility that was supportive of conservation efforts and that would be supportive of the future use of gray water. They wanted a rate structure that would discourage more use, that wouldn’t penalize people who would conserve. That whole area of environmental concerns was a big focus. But, the two pivotal things in this case were not those. One, they wanted to save money, it was too expensive, they were tired of paying higher prices. And two, they wanted local control of what was going on. And regarding the broader environmental and climate change arguments, while important, it might have been harder to mount an effort on that basis. People won’t move as much compared to things that are of more immediate concern, like rates and local control.

Joe: Do you think your approach could have been successful in a different city, considering particularly Claremont’s high level of educated community members?

Andy: Well first off, if you were dealing with a community of fewer English language speakers, you would have had to focus on ethnicity within your organization… you’d have to have people that could talk with different people (that spoke languages other than English), you can’t just preach at people in another language.

First off (sic), I’ve done this sort of thing before, for example, this was when Gene McCarthy was running for president, and we (a politically left anti-war movement) were mounting an effort to take over the Democratic Party. There was a primary election campaign, and I took a group of seven people into a town called Wisconsin Dells, it’s a small town under 30,000 or 40,000 people, and never in its history had ever voted Democratic for anything. We went into town and went to every door. We asked them how they felt about the war in Vietnam (the war was on going). If they were supportive of the war, we took note of it, and ignored them after that. If they were strongly against the war, we asked if they were willing to help with the voting effort. If they said yes, we took their phone number and said we would get back to them around the time of the election. If they were undecided, you would take note of that and talk with them and give them material. After just two weekends, we compiled this information, sent information to all of the people that seemed potentially sympathetic; they got one mailing from us. On the day before the election, we went to the people that said they were activists to help get people to the polls, and we took the town (won the election). And the Republican Party in that town, and the established Democratic Party, didn’t know what hit them. I don’t think they even knew we were in town doing the door-to-door work, and they were stunned. They were flabbergasted that this very archconservative city all of sudden voted for a Democrat and a candidate against the Democratic Party establishment, and it took eight people all of two weekends. This stuff is really doable. It’s important to understand that the grass roots power is very real. It can work, but it takes organization, it takes energy, it takes follow through, the usual stuff that you probably know.

Joe: You’ve written a lot about Campaign Finance. How does that affect local politics?

Andy: It’s mammoth. It’s incalculably mammoth. Jefferson said, “Democracy is a great form of government, if you can keep it.” We are at risk of not being able to keep it. That’s in jeopardy right now. Golden State Water hired some company from Tennessee to make human conducted phone calls. They asked if they could take a survey, I was called and listened to one. Then they asked if you were aware of the upcoming election. They then asked whom I was voting for Governor, which was interesting, making the survey seem legitimate. Then they asked if you were aware of the water measure in Claremont, and offered to read four statements, desiring a response after each one. And the statements were polemics, taken from an erroneous report, and then asking if you were still in favor of the measure. This was a propaganda piece. It was designed under the guise of a survey to be a political campaign. This cost them nearly a quarter of a million dollars. That’s expensive. Hiring these people to make these phone calls. We couldn’t afford that. Then there’s a question of the written material that was sent out. When you get stuff that’s very polished, multicolored, good pictures, photographs, what have you, it looks persuasive. It has a certain aura of credibility to it. They hired a PR/advertising company to produce this stuff. And they hired companies with experience running campaigns. They totally misrepresented the facts, but they knew politically where these push button issues were, for example calling the water fee a tax (which it would not be) to trigger the anti-tax feelings. They had sophisticated people advising them. They had enough money to hire professionals: this lobbying company, this public relations company, this advertising company, that’s what money buys. And local grassroots efforts don’t have that. Like I said, they spent over a million dollars it looks like. It really makes a big difference. We saw this in another instance in Fullerton. They wanted to change something with the police, and one man put up massive amount of money and was able to flip the city council and got what he wanted. Will this effect local elections? Sure. We (Claremont) may see this ourselves this year. Three city councilmen are up for reelection, two democrats and one republican. Under the state laws, you can’t declare eminent domain without 4 out of the 5 vote City Council votes. If they can flip a few Council seats, City Council could just stop the whole effort. There’s a high probability that they (Golden State Water) will go and find a candidate and throw him hundreds of thousands of dollars. I helped run two local campaigns, and I think in each of those campaigns our total expenditures were under $10,000, for everything.

This city means two things for Golden State Water. One, it’s a significant source of profit. Two, they want to turn this effort back. If these sorts of things are successful, they are going to spread, and these kinds of efforts are being mounted in two or three other cities around the state already. The corporations are desperate to stop this. I think the election for the next city council will be nasty, but maybe I’ll be wrong. Maybe they will give up and stop fighting. All three of the candidates – One of the candidates intended to retire but we convinced him to stay, and ironically it was a Republican -because what we want is to keep the city council together. They won’t run as a slate, they will run individually, but we will support all three of them. And the water issue will be the main issue of the election campaign. And money will matter.
Anything else?

Joe: No, that was great. Thank you very much.

Andy: My pleasure.